Forum Shopping in the Philippines: How Filing Similar Cases Can Get Your Suit Dismissed

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Filing two lawsuits over the same dispute is a risky move. In the Philippines, this practice—known as forum shopping—can lead to the outright dismissal of your case with prejudice, meaning you lose your chance to pursue the claim entirely. The Supreme Court recently reaffirmed this strict rule in Asia United Bank v. Goodland Company, Inc. (G.R. No. 190231, December 8, 2010), a case that illustrates how courts penalize litigants who try to improve their odds by filing multiple actions.

What is Forum Shopping?

Forum shopping is the act of filing two or more actions or proceedings based on the same cause, hoping that one court will rule favorably. It exists when the elements of litis pendentia (a pending case between the same parties on the same subject) are present, or when a final judgment in one case would amount to res judicata (a bar to relitigation) in another.

The prohibition exists to prevent waste of judicial resources and to stop litigants from "shopping" for a judge who might rule in their favor.

The Facts of the Case

Goodland Company mortgaged two properties in Laguna to Asia United Bank (AUB) as security for loans obtained by Smartnet Philippines, Inc. Goodland later claimed that its vice president signed a blank deed of real estate mortgage, thinking the company was only acting as an accommodation mortgagor. It alleged that AUB fraudulently filled up the document and registered the mortgage.

In January 2003, Goodland filed Civil Case No. B-6242 to nullify the mortgage on the ground of fraud. While that case was pending, AUB foreclosed on the properties. In November 2006, Goodland filed a second case, Civil Case No. B-7110, to nullify the foreclosure, arguing that it never agreed to mortgage the properties.

The Issue

The central question was whether Goodland committed willful and deliberate forum shopping by filing the second case while the first was still pending, and whether the dismissal of the first case with prejudice was proper.

The Ruling

The Supreme Court ruled in favor of AUB, reversing the Court of Appeals' decision that had reinstated Goodland's first case. The Court found that both cases were essentially the same: Goodland claimed it did not consent to the mortgage and sought to nullify both the mortgage and the foreclosure.

The Court emphasized that under Rule 7, Section 5 of the Rules of Court, a litigant must notify the court of the filing or pendency of another action involving the same or similar claim within five days of learning of that fact. Goodland failed to do this, even though both cases were raffled to the same branch of the Regional Trial Court.

This failure demonstrated a "furtive intent to conceal" the filing of the second case to secure a favorable judgment. As a result, the Court reinstated the dismissal of Civil Case No. B-6242 with prejudice.

Practical Takeaways

• File only one case per cause of action. If you have a dispute, consolidate all your claims into a single action rather than splitting them across multiple suits.
• Disclose pending cases. If you file a case and later learn of another action involving the same or similar claim, you must report this to the court within five days.
• Understand the consequences. Willful and deliberate forum shopping results in summary dismissal with prejudice—you cannot refile the case. It may also constitute direct contempt and grounds for administrative sanctions.
• Check for identity of causes. Even if the reliefs sought appear different (e.g., nullifying a mortgage versus nullifying a foreclosure), courts will look at whether the rights asserted and the facts alleged are essentially the same.
• Certify truthfully. The certification against forum shopping is a sworn undertaking. Submitting a false certification carries serious penalties, including indirect contempt and criminal liability.

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.