Legally Yours

Spouses Abines v. BPI

Statutory Construction. Prior est tempore, potior est jure.
Spouses Abines v. BPI
G.R. No. 167900 February 13, 2006

On February 27, 2002, respondent Bank of the Philippine Islands (BPI) filed a complaint for collection of sum of money and damages with prayer for preliminary injunction against petitioners spouses Crisologo and Priscilla Abines. Petitioners obtained from respondents BPI and BPI Family Bank a loan in the amount of P22,935,200.00 and P23,162,959.42. When the petitioners defaulted on their loan payments, the mortgaged properties were extrajudicially foreclosed and sold at public auction where BPI emerged as the highest bidder. The bid price of P35,730,184.00, however, did not cover the total amount owed by petitioners to respondents, hence, BPI sought the collection of the deficiency amount plus interest (COLLECTION CASE). Petitioners assailed the genuineness and due execution of the promissory notes and deeds of real estate mortgage. They alleged that the principal amount and interest on the loan are inaccurate which made the subsequent foreclosure sale invalid (REFORMATION CASE).

1) Whether the REFORMATION CASE should be dismissed on the ground of forum shopping; and 2) Whether or not the COLLECTION CASE shall subsist by virtue of Qui prior est tempore, potior est jure

The omnibus order categorically stated that the REFORMATION CASE and the COLLECTION CASE involved different issues and parties.  There was no forum shopping, thus, the petition lacks merit.  There is, however, no doubt that a judgment in the COLLECTION CASE will be res judicata in the REFORMATION CASE and vice versa. The question that remains to be resolved is which case should be dismissed. There is no hard and fast rule in determining which of the actions should be abated on the ground of litis pendentia, but through time, the Supreme Court has endeavored to lay down certain criteria to guide lower courts faced with this legal dilemma. As a rule, preference is given to the first action filed to be retained. This is in accordance with the maxim Qui prior est tempore, potior est jure. There are, however, limitations to this rule. Hence, the first action may be abated if it was filed merely to pre-empt the later action or to anticipate its filing and lay the basis for its dismissal. Thus, the bona fides or good faith of the parties is a crucial element. A later case shall not be abated if not brought to harass or vex; and the first case can be abated if it is merely an anticipatory action or, more appropriately, an anticipatory defense against an expected suit – a clever move to steal the march from the aggrieved party. The records of this case show that when petitioners filed the REFORMATION CASE, they were not aware of the pending COLLECTION CASE, thus, it does not appear that the REFORMATION CASE was filed to vex or harass Respondents. The COLLECTION CASE should subsist because it is the first action filed and the more appropriate vehicle for litigating all the issues in controversy.

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