FIRST PHILIPPINE INTERNATIONAL BANK v.
CA o No reply was given to the letter, but there was a meeting between
G.R. No. 115849 | January 24, 1996
Panganiban, J.
Digester: Protacio
Topic: Dismiss the Case (Forum Non Conveniens)
Summary
Petitioner bank decided to sell its property and entered into negotiations with
respondent. After back and forth offers and counter-offers, there was an agreement
as to the amount. However, bank refused to recognize that there was a perfected
contract of sale. After bank ignores the demands of buyers to comply with the sale,
buyers filed a suit for specific performance with damages against the bank (First
case). While the first case was pending, Henry Co who owned majority of bank’s
shares of stocks files a derivative suit (Second case) to assail the perfection of the
contract of sale. Bank claims there was forum shopping, and moves to dismiss both
cases with prejudice.
Supreme Court held that dismissal is proper for both procedural and substantive
reasons. There was forum shopping.
Doctrine relevant to PRIL (no foreign element involved, discusses history and
requisites of forum shopping)
Forum shopping had its roots from international law concept of forum non
conveniens where a court, in a conflicts of law case, may refuse impositions on its
jurisdiction where it is not the most “convenient” or available forum and the parties
are not precluded from seeking remedies elsewhere. In the present, forum shopping
has been made a legitimate device to solve abuse and misuse of litigants who seek
favorable opinions in a more convenient forum.
FACTS
 Petitioner First Philippine International Bank(seller) owns six parcels of land
in Sta. Rosa Laguna. Petitioner Mercurio Rivera is the Head Manager of the
Property Management Department of the Bank.
o Petitioner Bank wanted to sell the said property
o Take note that the bank has been in conservatorship at this time
 Demetrio Demetria and Jose Janolo(buyers) wanted to purchase the
property and initiated negotiations
 Series of negotiations occurred – offers and counteroffers
o Buyers met up with Rivera and made a formal offer to the bank
(P3.5 million)
o Rivera made a formal reply with counter-offer (P5.5 million)
o Buyer replied with another counter-offer (P4.25 million in CASH)
the buyers, the Vice President of the Bank and Rivera
 Bank orally reiterates the offer of P5.5 million
 2 days later, buyers sent a letter to the bank wherein they accepted the offer
to purchase the property at P5.5 million
 Conservator of the bank was replaced by an Acting Conservator
o Rivera then wrote to buyer that the proposal to buy the properties
is still under study by the newly designated Acting Conservator
 Series of demands by the buyers for compliance of the bank with the
perfected contract of sale. Bank kept refusing the demands.
 Buyers tendered payment of the amount of P5.5 million but bank refused
to receive it
o Bank advertised the parcels of land for sale to any interested buyer
 Second tender of payment was still not acted upon, so buyers made final
demand for compliance by the bank
 Buyers in a reply letter to the final demand, through Acting Conservator,
repudiated authority of Rivera and claimed that his dealings with buyers are
unauthorized or illegal
 On May 16, 1988, buyers filed a suit for specific performance with
damages (First case)
o Basis was a perfected contract of sale between them and the bank
o Bank took position that there was no perfected sale because
defendant Rivera is not authorized to sell property = no meeting of
the minds
 Henry L. Co filed a motion to intervene, alleging owning 80% of the bank’s
outstanding shares of stock
o Bank denies motion to intervene
 Pending the case, Carlos Ejercito substitutes original buyers Demetria and
Janolo in view of assignment of rights in matter of litigation
 RTC renders decision on July 10, 1991 which found in favor of the buyers
o Declared the existence of a perfected contract of sale and ordered
the bank to accept the tender of payment as well as pay damages
o Bank appeals judgment
 On July 11, 1992 during the pendency of proceedings with the CA, Henry Co
and other stockholders of the bank filed an action – a derivative suit –
with the RTC to declare any perfected sale of property as unenforceable
and stop the implementation of the sale (Second case)
o Respondent opposes this motion on the ground of forum shopping
 CA denies motion for reconsideration filed by petitioner
 Hence, this petition for review on certiorari
o Petitioner bank includes a verification/certification stating that
“for the record, the pendency of Civil Case No. 92-1606 before the
RTC of Makati, involving a derivative suit filed by stockholders of
 petitioner bank against the conservator and other defendants but
which is the subject of a pending MTD without prejudice”
ISSUES
W/N there was forum shopping on the part of petitioner Bank – YES
W/N there was a perfected contract of sale – YES
W/N the contract of sale was enforceable under the statute of frauds – YES
W/N the bank conservator had the unilateral power to repudiate the authority of the
bank officers and/or revoke the contract – NO
RATIO
On forum shopping (topic relevant to PRIL)
 Private respondent argues that despite the verification included in the
petition, petitioners are guilty of actual forum shopping
 Petitioner explains there is no forum shopping because:
o In the first case, bank is defendant. In the second case, bank,
assuming it’s a real party in interest, is the plaintiff.
o Derivative suit not a suit for and in behalf of corporation
o Even though verification was signed by the bank as a derivative
suit, it doesn’t mean that it is one
o Bank did not hide the second case
 Forum shopping originated as a concept in private international law
o Non-resident litigants are given the option to choose the
forum/place wherein to bring their suit for various reasons or
excuses
 Including securing procedural advantages, annoy and
harass defendant, avoid overcrowded dockets, or select a
more friendly venue
o To combat these excuses, the principle of forum non conveniens
was developed whereby a court, in conflicts of law cases, may
refuse impositions on its jurisdiction where it is not the most
“convenient” or available forum and the parties are not
precluded from seeking remedies elsewhere
 Forum shopping occurs when a party attempts to have his action tried in a
particular court or jurisdiction where he feels he will receive the most
favorable judgment or verdict (Black’s Law Dictionary)
 In the Philippines, forum shopping encompasses both a choice of venues
and a choice of remedies
o Choice of venues – for example, plaintiffs allowed to commence
action in different places (Rule 4, Sec. 2b)
o Choice of remedies – aggrieved parties are given the choice to
pursue civil liabilities independently of criminal
 Practice results to conflicting adjudications and confusion to an orderly
administration of justice, creating extreme inconvenience to parties
 Test of determining forum shopping is where the elements of litis
pendentia are present or where a final judgment in one case will amount
to res judicata in the other
o Identity of parties, identity of rights asserted and relief prayed for,
and identity on the preceding particulars is such that any judgment
rendered in the other action will amount to res judicata in the other
 ITC, it’s obvious that there exists identity of parties or interests represented,
identity of rights or causes, and identity of reliefs sought
o The objective or relief being sought in the second case, though
worded differently, is the same – to enable the petitioner bank to
escape the obligation to sell the property
 There is identity of parties or at least, of interests represented
o Plaintiffs in second case are not suing in their personal capacities,
they have no direct personal interest in matter
o Stockholders are bringing a derivative suit for and in behalf of the
Bank, as seen in allegations of complaint
o Corporate veil cannot be used to shield blatant violation of
prohibition against forum shopping
 What is important in determining existence of forum shopping is the
vexation caused the courts and parties-litigant by a party who asks a
different court/agency to rule on the same or related causes and grant
the same reliefs
 Only proper to dismiss the current petition because of forum shopping
o Admonished petitioners to strictly follow the rules against forum
shopping
On the perfection of the contract
 Requisites of a valid and perfected contract are present – consent, object
certain, and cause of obligation
 Rivera’s alleged lack of authority to act cannot be used as ground to say
there was no consent on the part of the bank
o Rivera had apparent or implied authority to act for the Bank
o He was the Manager of the Bank and was the person in charge of
Bank’s acquired assets
o Despite evidence presented of Rivera’s actual authority, it does not
change the fact that his apparent authority is decisive to show the
consent by the bank
 During the meeting on September 28, 1987, VP and Rivera confirmed the
price of P5.5 Million cannot be lowered any more – this was a revival of the
offer which was agreed to by the buyers
On the enforcement of the contract
 Written communications constitute sufficient memoranda which makes
the contract enforceable despite the lack of a formal contract of sale
o Includes names of the parties, terms and conditions of the
contract, price and description of the property
 Even assuming the counter-offer during the meeting constitutes a new
offer, the Statute of Frauds does not apply because petitioner bank failed
to object to oral testimony proving bank’s counter-offer at P5.5 Million
o Deemed to have waived any defects of the contract under the
Statute of Frauds
o Oral testimony on reaffirmation of counter-offer is aplenty and
silence of petitioner makes evidence binding on them

On the conservator revoking the contract

 No evidence that the Conservator, at the time the contract was perfected,
actually repudiated or overruled said contract of sale
 Powers of conservator must be related to the preservation of the assets of
the bank, the reorganization of management, and restoration of its
viabilities
o Such powers cannot extend to post-facto repudiation of perfected
transactions
o Only has the power to revoke contracts that are, under existing
law, deemed to be defective
 His power is not unilateral and cannot simply repudiate valid obligations of
the Bank