"x x x.
Consolidation of actions involving a common question of law or fact is expressly authorized under Section 1, Rule 31 of the 1997 Rules of Civil Procedure, to wit:
SECTION 1. Consolidati0n. – When actions involving a common question of law or fact are pending before the court, it may order a joint hearing or trial of any or all the matters in issue in the actions; it may order all the actions consolidated; and it may make such orders concerning proceedings therein as may tend to avoid unnecessary costs or delay.
Consolidation of cases is also allowed under Section 3, Rule III of the 2009 IRCA, to wit:
Consolidation of Cases. – When related cases are assigned to different Justices, they may be consolidated and assigned to one Justice.
(a) Upon motion of a party with notice to the other party/ies, or at the instance of the Justice to whom any of the related cases is assigned, upon notice to the parties, consolidation shall ensue when the cases involve the same parties and/or related questions of fact and/or law.
(b) Consolidated cases shall pertain to the Justice –
(1) To whom the case with the lowest docket number is assigned, if they are of the same kind;
(2) To whom the criminal case with the lowest number is assigned, if two or more of the cases are criminal and the others are civil or special;
(3) To whom the criminal case is assigned and the other are civil or special; and
(4) To whom the civil case is assigned, or to whom the civil case with the lowest docket number is assigned, if the cases involved are civil and special.
(c) Notice of the consolidation and replacement shall be given to the Raffle Staff and the Judicial Records Division. (Emphasis and underscoring supplied)
As can be gleaned from the aforequoted provision, for consolidation to be proper, the cases sought to be consolidated must be related.
Similarly, jurisprudence has laid down the requisites for consolidation. In the recent case of Steel Corporation of the Philippines v. Equitable PCI Bank, Inc.,[20] the Court held that “it is a time-honored principle that when two or more cases involve the same parties and affect closely related subject matters, they must be consolidated and jointly tried, in order to serve the best interests of the parties and to settle expeditiously the issues involved. In other words, consolidation is proper wherever the subject matter involved and relief demanded in the different suits make it expedient for the court to determine all of the issues involved and adjudicate the rights of the parties by hearing the suits together.”
In the present case, there is no sufficient justification to order the consolidation inasmuch as the Deutsche Bank AG Petition has no relation whatsoever to the Vitarich Petition. To recall, the Deutsche Bank AG Petition is an appeal on certiorari from the Order dated October 28, 2009 of the RTC Batangas in Sp. Proc. No. 06-7993. Vitarich case, on the other hand, is an appeal on certiorari and mandamus from the Order dated January 19, 2009 of the RTC Bulacan in Civil Case No. 592-M-2006.
The fact that Deutsche Bank AG is a party to both cases does not make the proceedings intimately related. There is no factual relation between the two proceedings. SteelCorp proceedings originated from SteelCorp’s rehabilitation proceedings which have nothing to do with the Vitarich proceeding that originated from Vitarich’s rehabilitation proceeding.
Neither are there interconnected transactions, nor identical subject matter in the Deutsche Bank AG and Vitarich petitions. The former involved issue resulting from the assignment of credits of RCBC to Deutsche Bank AG whereas in the latter, the issue arose from the assignment of the receivables of various creditors of Vitarich to several corporations and special purpose vehicles (SPVs).
Verily, the two petitions having no factual relationship with and no interconnected transactions on the same subject matter, they cannot be deemed “related cases.” As such, the necessity to consolidate does not become imperative. The order of consolidation by the CA on the sole ground that the cases involved a common question of law was, therefore, not in order.
It bears noting that the CA cited the cases of Zulueta v. Asia Brewery, Inc.,[21] Benguet Corporation, Inc. v. Court of Appeals,[22] and Active Wood Products Co., Inc. v. Court of Appeals[23] as jurisprudential basis of its order to consolidate. Its reliance on the said cases was misplaced as the factual milieus therein were not in all fours with the case at bench. The ruling in these cases, in fact, bolstered Deutsche Bank AG’s position that for consolidation to be warranted the cases sought to be consolidated must not only involve related issues but also the same parties and closely related subject matters.
The CA cannot rely on the case of Zulueta v. Asia Brewery, Inc., to support its ruling that consolidation is proper when the cases involve the resolution of a common question of law or fact. In the said case, a joint trial of the two cases was justified because both arose out of, or an incident of, the same Dealership Agreement. Thus, the Court upheld the consolidation in this wise:
Inasmuch as the binding force of the Dealership Agreement was put in question, it would be more practical and convenient to submit to the Iloilo
Two cases involving the same parties and affecting closely related subject matters must be ordered consolidated and jointly tried in court, where the earlier case was filed.[24] (underscoring supplied)
In the case of Benguet Corporation, Inc. v. Court of Appeals, where it was written that “the rationale for consolidation is to have all cases intimately related acted upon by one Court/Division to avoid the possibility of conflicting decisions being rendered.”[25] A scrutiny of the ruling in Benguetreveals that the case pending in the 9th Division was merely an offshoot of the decision rendered in the 10th Division. Faulting the CA 9th Division with grave abuse of discretion in denying Benguet's Motion to Transfer Case No. CA-G.R. SP No. 12964 to the 10th Division, the Court held, thus:
2. The matter elevated to the 9th Division, namely, the implementation of the Writ of Preliminary Mandatory Injunction with Break-open Order issued by the Trial Court on 29 September 1987 in favor of BENGUET in the Reconveyance Case (Civil Case No. 5815) was a consequence of the very Decision rendered by the 10th Division. It was, therefore, properly within its competence being intimately related to the very issues raised and resolved by said Division.
3. The rationale for consolidation is to have all cases intimately related acted upon by one Court Division to avoid the possibility of conflicting decisions in cases involving the same facts and common questions of law. The cases before the 10th Division and the 9th Division of the Court of Appeals are two (2) such intimately and substantially related cases. Consolidation being called for it cannot be justifiably argued, as private respondents do, that BENGUET is estopped from pleading for such consolidation. To deny the transfer could lead to further protracted litigations to the detriment of the efficient and effective determination of actions and proceedings.[26](underscoring supplied)
Hence, consolidation of cases is proper when there is a real need to forestall the possibility of conflicting decisions being rendered in the cases.[27] In the case under consideration, considering that Deutsche Bank AG and Vitarich cases are not related, the risk of conflicting decisions is a remote probability.
Lastly, in Active Wood Products Co. , Inc. v. Court of Appeals, the Court sustained the consolidation of the civil case filed by Active Wood against State Investment House and the latter’s petition for a writ of possession in the land registration case as they involved the same parties and the same subject matter – Active Wood’s two parcels of land, thus:
The consolidation of cases becomes mandatory because it involves the same parties and the same subject matter which is the same parcel of land. Such consolidation is desirable to avoid confusion and unnecessary costs and expenses with the multiplicity of suits.[28] xxx (underscoring supplied)
Further, the Court finds merit in Deutsche Bank AG’s contention that the consolidation of the subject cases will defeat the purpose of consolidation.
It is well recognized that the purpose of the rule on consolidation is to avoid multiplicity of suits; to guard against oppression and abuse; to prevent delays; to clear congested dockets; and to simplify the work of the trial court. In short, consolidation aims to attain justice with the least expense and vexation to the parties-litigants.[29] It contributes to the swift dispensation of justice, and is in accord with the aim of affording the parties a just, speedy, and inexpensive determination of their cases before the courts. Further, it results in the avoidance of the possibility of conflicting decisions being rendered by the courts in two or more cases, which would otherwise require a single judgment.[30]
Under the circumstances, the consolidation of the Deutsche Bank AG Petition with the Vitarich Petition does not appear to be a prudent move as it serves none of the purposes cited above. On the contrary and as correctly pointed out by Deutsche Bank AG, it will only complicate the resolution of the cases as the CA would have to consider the different factual antecedents of both the Deutsche Bank AG and Vitarich petitions.
Moreover, the question of law that the Vitarich proceedings allegedly shares with the SteelCorp Proceedings – whether Vitarich’s creditors could be compelled to disclose the sums paid for the assigned Vitarich loans - has long been finally resolved and has already become the law of the case among the parties in the Vitarich rehabilitation proceedings. Thus, the consolidation would unduly prejudice the banks and would lead to complications, delay or restriction on the right of the banks to the immediate dismissal of the Vitarich proceedings.
Furthermore, the consolidation will only subject the parties to added expense and unjust vexation. The number of parties will substantially increase so as the cost of furnishing the parties with pleadings, thereby defeating the very rationale behind consolidation.
Relevant is the case of Republic of the Phils. v. Hon. Mangrobang,[31] where the Court disallowed the consolidation of an ejectment case and a case for eminent domain because the consolidation thereof would complicate procedural requirements and delay the resolution of the cases which raised dissimilar issues. The Court held that fairness and due process might be hampered rather than helped if the cases were consolidated.
Likewise, in Philippine National Bank v. Tyan Ming Development,Inc.[32] the non-consolidation of PNB’s petition for a writ of possession and GOTESCO’s complaint for annulment of foreclosure proceeding was upheldfor defeating the very purpose of consolidation, thus:
The record shows that PNB’s petition was filed on May 26, 2006 , and remains pending after three (3) years, despite the summary nature of the petition. Obviously, the consolidation only delayed the issuance of the desired writ of possession. Further, it prejudiced PNB’s right to take immediate possession of the property and gave GOTESCO undue advantage, for GOTESCO continues to possess the property during the pendency of the consolidated cases, despite the fact that title to the property is no longer in its name.
It should be stressed that GOTESCO was well aware of the expiration of the period to redeem the property. Yet, it did not exercise its right of redemption. There was not even an attempt to redeem the property. Instead, it filed a case for annulment of foreclosure, specific performance, and damages and prayed for a writ of injunction to prevent PNB from consolidating its title. GOTESCO’s maneuvering, however, failed, as the CA and this Court refused to issue the desired writ of injunction.
Cognizant that the next logical step would be for PNB to seek the delivery of possession of the property, GOTESCO now tries to delay the issuance of writ of possession. It is clear that the motion for consolidation was filed merely to frustrate PNB’s right to immediate possession of the property. It is a transparent ploy to delay, if not to prevent, PNB from taking possession of the property it acquired at a public auction ten (10) years ago. This we cannot tolerate.
xxx
In De Vera v. Agloro, this Court upheld the denial by the RTC of a motion for consolidation of a petition for issuance of a writ of possession with a civil action, as it would prejudice the right of one of the parties, viz.:
It bears stressing that consolidation is aimed to obtain justice with the least expense and vexation to the litigants. The object of consolidation is to avoid multiplicity of suits, guard against oppression or abuse, prevent delays and save the litigants unnecessary acts and expense. Consolidation should be denied when prejudice would result to any of the parties or would cause complications, delay, prejudice, cut off, or restrict the rights of a party.[33] (underscoring supplied)
In the recent case of Espinoza v. United Overseas Bank Phils.,[34] the Court, in the same manner ruled against the consolidation of the proceedings for the issuance of a writ of possession with that for the declaration of nullity of a foreclosure sale on the ground that it would run counter to the purpose of consolidation:
In this case, title to the litigated property had already been consolidated in the name of respondent, making the issuance of a writ of possession a matter of right. Consequently, the consolidation of the petition for the issuance of a writ of possession with the proceedings for nullification of foreclosure would be highly improper. Otherwise, not only will the very purpose of consolidation (which is to avoid unnecessary delay) be defeated but the procedural matter of consolidation will also adversely affect the substantive right of possession as an incident of ownership.[35]
Indeed, the consolidation of actions is addressed to the sound discretion of the court and its action in consolidating will not be disturbed in the absence of manifest abuse of discretion.[36] Grave abuse of discretion defies exact definition, but it generally refers to capricious or whimsical exercise of judgment as is equivalent to lack of jurisdiction. The abuse of discretion must be patent and gross as to amount to an evasion of a positive duty or a virtual refusal to perform a duty enjoined by law, or to act at all in contemplation of law, as where the power is exercised in an arbitrary and despotic manner by reason of passion and hostility.[37]
In this particular case, however, the exercise of such discretion by the CA in ordering the consolidation of the Deutsche Bank AG Petition and the Vitarich Petition was less than judicious considering that the two cases were not intimately and substantially related.
Lest it be misunderstood, the CA may prescribe reasonable rules governing assignment of cases with similar questions of law or facts to one justice. In case of consolidation, however, it may be effected only if the said cases are related. Needless to state, assignment is different from consolidation.
