Victronics Computers vs.

RTC

Facts:
Victronics Computers, Inc. is a domestic corporation in the business of selling computer systems and
peripherals with Victor Mariano as General Manager. Karl C. Velhagen and Archimedes R. King, alleged
operators of a business under the names Victoria Court, GMT Consolidated Company and Victoria Group
of Companies. Plaintiff submitted quotation for office systems to service the networking requirements of
various Victoria Court branches to the defendants. Private respondents placed an order under the name
of GMT CONSOLIDATED, with the petitioner in a Purchase Order form where the defendants ordered six
sets of 80 DATA 386 computer system with peripherals for the net consideration of PHP767,000.00
subject to the following terms:
(a) Payment – 50% down payment, 50% COD upon delivery;
(b) Delivery – within 30 calendar days upon receipt of Purchase Order and 50% downpayment.
(c) Penalty – 1% of total Purchase Order amount per day of delay.
The computer hardware were to be delivered to the different Victoria Court drive-in branches.
· May 22, 1991: After the plaintiffs received the 50% downpayment, petitioner to six motels decided “to
band together for their mutual interest and benefit, under the trade name and style of the Victoria
Group of Companies”. These companies operate under a management team wherein defendants
Velhagen and King are the General Manager and Chief Executive Officer, respectively.
· July 26, 1991: Petitioner filed with the RTC of Makati a Complaint vs. ”Karl C. Velhagen and Archie R.
King, who operate business under the names of Victoria Court, GMT Consolidated Company, and
Victoria Group of Companies”, after their demands for the outstanding balance were ignored by the
defendants. Case was logged under Civil Case 91-2069 and was raffled off to Branch 63 presided over by
Judge Julio R. Logarta.
· August 8, 1991: Defendants Velhagen and King were each served with a summons and a copy of the
complaint.
· August 9, 1991: The six defendant corporations included in the case filed with the Makati RTC their
own Complaint dated August 7, 1991 docketed as Civil Case No. 91-2192 and raffled off to Branch 150 of
the said court. In this case, they requested that the abovementioned Purchase Order be declared as null
and void.
· August 22, 1991: Private respondents Velhagen and King together with their lawyers filed for a Motion
To Dismiss and/or To Suspend Proceedings on Civil Case No. 91-2069 stating that:
(a) Victronics corporation or the petitioner, failed to verify the complaint.
(b) The petitioner failed to sue the proper parties.
(c) There is another case pending in another court
Supporting these arguments, they claim that:
(a) Verification is a formal requirement in the Rules of Court
(b) The parties involved in the transaction represented corporations and not their own personal interest.
Moreover, “Victoria Court, GMT Consolidated Company and Victoria Group of Companies” are only
tradenames and not real corporations.
(c) There has been a request filed for the nullification of subject Purchase Order. At the very least,
Branch 63 of the trial court should momentarily cease proceedings in case 91-2069 because of the
pending incident before another court.
· September 16, 1991: Branch 63 of the Makati RTC through respondent Judge Julio Logarta issued an
order dismissing Civil Case No. 91-2069 due to litis pendentia.
· September 19, 1991: Petitioner in Civil Case 91-2069 filed a contempt charge vs. respondents Velhagen
and King for forum shopping claiming citing that the respondents did not file an answer with compulsory
counterclaim upon receipt of their respective summons.
· September 25, 1991: Judge Zeus Abrogar , acting on the petitioner’s motion to dismiss Civil Case NO.
91-2192, handed an order to reserve summons on the petitioner.
· October 4, 1991: Petitioner of Civil Case No. 91-2069 requested and thereafter obtained, a photocopy
of order of dismissal of abovementioned case, after accidentally learning of the dismissal. Apparently,
the petitioner’s counsel has not yet received the dismissal.
· October 9, 1991: Victronics filed an Ex Abundante Cautela Motion To Refer Forum-Shopping Charge to
Executive Judge. Petitioner also filed a Motion for Reconsideration on the said order of dismissal.
· October 14, 1991: Petitioner filed for a Motion to Dismiss Civil Case No. 91-2192 on the ground of litis
pendentia and forum shopping.
· December 11, 1991: Petitioner filed in Civil Case 91-2069 for a motion for the consolidation of the two
cases before Branch 63.
· January 6, 1992: Petitioner filed again a Manifestation Pro Hac Vice wherein it stated that there was
“technically no pending action before Branch 150 as it had not yet acquired jurisdiction over the person
of the petitioner due to the improper service of summons”.
· January 20, 1992: Petitioner in Civil Case No. 91-2192 filed an Answer with Compulsory Counterclaim.
Also on that day, petitioner filed in Civil Case No. 91-2069 filed an Amended Complaint including therein,
as additional defendants, the six corporations which sued the plaintiffs in Civil Case No. 91-2192.
· February 7, 1992: Clerk of Court of Branch 63 sent petitioner of Civil Case No. 91-2069 the resolution
dated January 22, 1992, which resolved the various motions filed:
A. Motion for Consolidation filed by plaintiff on December 11, 1991 was denied for being doubtful
and academic.
B. All other motions (Motion for Reconsideration dated October 7, 1991; Contempt Charge for
Forum-shopping; The Motion to Refer the Contempt Charge to the Executive Judge; and
Manifestation Pro Hac Vice) were denied and the order handed down last September 16, 1991
dismissing abovementioned case was REITERATED.
C. February 20, 1992: Respondent Court in Civil Case 91-2069 issued another order denying the
petitioner’s motion for the issuance of an alias summons2.

Issues:
1. Whether or not the respondent Court erred in dismissing, on the ground of litis pendentia, Civil
Case No. 91-2069 which has priority in respect to the time of filing.
2. Whether or not the private respondents are guilty of forum-shopping.

Ruling:
Noting again the rules of litis pendentia:
(a) identity of parties, or at least such as representing the same interest in both actions;
(b) identity of rights asserted and relief prayed for, the relief being founded on the same facts; and
(c) the identity in the two (2) cases should be such that the judgment that may be rendered in the
pending case would, regardless of which party is successful, amount to res judicata in the other.

It was noted by the Supreme Court that the identity of the parties in both cases were clearly established
although in different personalities and that there is not doubt that the defendants in the first case and
the plaintiffs in the second case are one in the same. Moreover, there is a common fact that both cases
are vying for and that is the validity of the Purchase Order. The first case filed (Civil Case No. 91-2069)
involves the performance of the contract whereas the second case (Civil Case No. 91-2192) seeks for the
nullification of said contract.
Noting that there is no hard and fast rule that determines which of the actions should be declined, the
high court ruled that the second case be abated citing that the priority in time gives preference in law
(Qui prior est tempore, potior est jure4). The court mentioned previously decided cases5 regarding litis
pedentia which reinforced this ruling. They mentioned the rule’s limitations noting that the second
action should not be brought to annoy the defendant for if it could be proven that the second action is
not vexatious, the high court can allow the second action to stand and the first one to be discontinued.

They further ruled that the second case was filed not in due faith or to seek justice over a genuine wrong
committed, but to be a nuisance and to harass the plaintiff of the first case in another forum. They
particularly observed the haste in the preparation of Complaint filed by the defendants of the first case.
Moreover, the defendants did not follow the Section 7, Rule 8 of the Rules of Court, which expressly
states:

Sec. 7. Action or defense based on document.

— Whenever an action or defense is based upon a written instrument or document, the substance of
such instrument or document shall be set forth in the pleading, and the original or a copy thereof shall
be attached to the pleading as an exhibit, which shall be deemed to be a part of the pleading, or said
copy may with like effect be set forth in the pleading. (7)

No compliance was made since the defendants were not able to submit or attach a copy of the Purchase
Order in their complaint. It was apparent that the defendants wanted to file their petition ahead of the
summons from Civil Case 91-2069.

Regarding the issue of forum-shopping, the high court defined in the case, forum shopping as such:

In People vs. Court of Appeals, We noted that forum-shopping has its roots in the rule that a party
should not be allowed to pursue simultaneous remedies in two (2) different forums for it does havoc to
the rule on orderly procedure. Later, in E. Razon Inc. vs. Philippine Port Authority. We specifically
declared that forum-shopping is an act of malpractice that is proscribed and condemned as trifling with
the courts and abusing their processes; it is improper conduct that tends to degrade the administration
of justice. Thus, the said rule has been formalized in Section 17 of the Interim Rules and Guidelines
issued by this Court on 11 January 1983 in connection with the implementation of the Judiciary
Reorganization Act (Batas Pambansa Blg. 129).

The court ruled that there was no forum-shopping. It was mentioned that instead of filing a new case,
they should have filed a responsive pleading.

Therefore, the Supreme Court granted the instant petition of the petitioner and dismissing Civil Case No.
91-2192 instead of 91-2069 on grounds of litis pendentia and ordering the defendants to pay the cost of
the case. They also modified the ruling of the respondent court dated last January 22, 1992 in Civil Case
91-2069 setting aside the portion denying the motion to reconsider its Order of September 16, 1991 and
declared the portion denying the motion as moot and academic.