SPOUSES YU vs.

MAGNO CONSTRUCTION report on the documents and books of account of the

GR nos. 138701-02 | Oct 17, 2006 | Garcia | Pet for parties to determine the nature and extent of their
Review on Certiorari respective claims and liabilities.
Petitioners: Spouses Roque & Asuncion Yu & Leyte  The commissioner prepared a summary of account
Lumber Yard & Hardware Co., Inc. receivables and submitted 3 reports.
Respondents: Basilio Magno Construction & Dev’t  The parties then presented their respective set of
Enterprises Inc. & Estate of Basilio Magno witnesses.
 The RTC rendered its decision on the 2 Civil Cases.
Facts:  Civil Case 5822
 Spouses Roque Yu Sr. and Asuncion Yu are the  Dismissing the complaint
controlling stockholders of Leyte Lumber, a business  Declaring BG Magno to have made an
enterprise engaged in the sale of lumber, building overpayment to Spouses Yu for P620,239.61
and electrical supplies and other construction  Civil Case 5823
materials.  Dismissing the complaint
 During his lifetime, Engr. Basilio G. Magno entered  Declaring BG Magno to have made
into a verbal agreement with Leyte Lumber through overpayments for P1,602,625.52
Roque Yu, Sr., whereby the latter agreed to supply  The parties did not move for reconsideration of
Magno with building materials he may need in his the 2 decisions but instead, directly interposed their
construction business. The success of Magno's respective appeals to the CA.
business gave birth to the Basilio G. Magno  CA consolidated the 2 cases on appeal.
Construction and Development Enterprises, Inc. (BG  CA ruled in this manner:
Magno).  Civil Case 5822
 Owing to this fruitful relationship, Yu Sr. and Magno  Modified the RTC decision
entered into a joint venture, the Great Pacific  Declaring Magno to have made an
Construction Company (GREPAC), with Yu as overpayment to Spouses Yu for P621,235.61
President and Magno as Vice President. Said  Civil Case 5823
relationship between Magno and Yu Sr. began in  Reversed and set aside the RTC decision
1975 and continued until Magno’s death on Aug. 21,  BG Magno is ordered to pay Spouses Yu
1978. P625,000 plus 12% interest per annum &
 Magno paid either in cash or by check for what he P50,000 as attorney’s fees
obtained from Leyte Lumber.  Spouses Yu filed an MR, which was denied.
 By the time the business relationship was coming to Issue:
an end, respondents alleged that the parties have 1. WON RTC Judge Francisco of Branch 6 erred in
dealt with each other to the amount of at least rendering a decision over the Civil Case 5822 that
P7,068,000. was filed and heard in Branch 8 [NO]
 January 30, 1979 - Spouses Yu instituted 2 separate 2. WON CA erred in consolidating the 2 cases [YES]
complaints for sums of money with damages and Ratio:
preliminary attachment against the respondents 1. There was nothing irregular in the procedure taken.
before the RTC Tacloban City. The records show that there appears to have been a
1. Civil Case 5822 instituted by Leyte Lumber previous agreement1 to either transfer or
against BG Magno and the Estate of Basilio consolidate the two cases for decision by the
Magno, to collect on the principal amount of presiding judge of Branch 6.
P1,270,134.87 for construction materials  When filed a Motion to Lift, Dissolve and
claimed to have been obtained on credit by BG Quash the Writs of Attachment with Branch 6
Magno on January 20, 1993, the caption thereof
2. Civil Case 5823 filed by the Yu spouses against indicated the docket numbers of both cases.
BG Magno and the Estate of Basilio Magno, to  When the Spouses Yu's new counsel entered his
collect upon loans and advances Formal Appearance, in the caption thereof was
(P3,575,000.00) allegedly made by the spouses also written the docket numbers of both cases.
to BG Magno  Spouses Yu's previous counsel of longstanding
 Respondents moved to dismiss the Civil Case (whose representation dates back to the filing of
5823 on the ground that the claims must be pursued the two complaints in 1979) filed his Motion to
against the estate of the deceased Magno. 1
Based on the CA findings:
 Said motion was denied. The estate was dropped as although Civil Case No. 5822 was raffled to and tried in Branch
a party-defendant. 8', the court a quo issued joint orders dated February 16, 1993
 During the pre-trial conference in Civil Case 5822, and September 10, 1993 in Civil Case Nos. 5822 and
Spouses Yu proposed that a commissioner be 5823Recognizing the apparent transfer of Civil Case No. 5822
appointed. The respondents interposed no to the court a quo, appellants' [petitioners' ] counsel filed his
objections. Atty. Romulo Tiu was appointed and formal appearance dated October 20, 1993 with Branch 6.
tasked with the duty to examine and make a detailed There is therefore no basis to appellants' contention that the
court a quo is devoid of authority to decide Civil Case No. 5822.
 Withdraw as Counsel on October 30, 1993, and  avoidance of the possibility of conflicting
the caption thereof similarly indicated the decisions being rendered by the courts in
docket numbers of both cases. two or more cases which would otherwise
 Subsequent orders of the court which emanated require a single judgment
from Branch 6 also bear, in the caption thereof,  Consolidation of actions is addressed to the
the titles and docket numbers of both cases. sound discretion of the court, and its action in
 As early as six months prior to the promulgation consolidating will not be disturbed in the
of Judge Francisco's decisions in the 2 cases, absence of manifest abuse of discretion.
there appears to have been a transfer or  Likewise, it became apparent that, after the
consolidation of said cases in Branch 6 and the commissioner filed his reports in court and the
parties knew of it, albeit the actual date when parties their comments thereto, but before trial
the two cases were consolidated or transferred could commence, the claims and defenses of the
does not appear on record. Nonetheless, the fact parties in Civil Case No. 5823 are covered by and
remains that no opposition or objection in any may be threshed out by a consideration of the
manner was registered by either of the parties evidence presented in Civil Case No. 5822 as
to the same, thereby evincing their consent well, which consisted mainly of the reports of
thereto. It is, therefore, already too late in the the commissioner. Based on the commissioner's
day for the petitioners to question the reports in the case pending in Branch 8 (Civil
competence of Judge Francisco to render the Case No. 5822), the petitioners' claims,
separate decisions in the two cases. including those in Branch 6, appear to have been
paid; indeed, this is in essence the defense of the
2. The two cases were filed just a few months apart; respondents as set forth in their Answers to the
they involve simple cases of collection of sums of 2 complaints.
money between identical parties and no other; the
respondents claim, in both cases, essentially the Side issue: Leyte Lumber’s liability to respondents for
same defense, which is overpayment; they cover the P142,817.27, unpaid account of GREPAC for filling
same period of transacting continuous business that materials delivered to it by BG Magno
spans four years; they relate to simple issues of fact  GREPAC possesses a distinct corporate personality
that are intimately related to each other; they separate from Leyte Lumber whom BG Magno
entailed the presentation of practically identical sought to be liable therefor.
evidence and witnesses; in fact, a broad part of the  The situation does not call for a piercing of GREPAC's
evidence and testimonies in one case was totally corporate veil since there is no clear and convincing
adopted or reproduced in the other by either or both evidence showing fraud and illegality in the
parties. formation and operation of GREPAC.
 A court may order several actions pending  Quite the contrary, what has been proved suggests
before it to be tried together where they that GREPAC was a product of the close business and
arise from the same act, event or transaction, personal ties that bound Roque Yu, Sr., and Magno
involve the same or like issues, and depend during better times. It was a bona fide joint venture
largely or substantially on the same between the two.
evidence, provided that the court has
jurisdiction over the case to be consolidated Final Note
and that a joint trial will not give one party  As soon as it became apparent that the 2 cases were
an undue advantage or prejudice the inexorably linked, it became the duty of the Spouses
substantial rights of any of the parties. Yu to seek a consolidation of the cases a quo. Yet
 Consolidation of actions is expressly authorized they did not.
under Section 12, Rule 31 of the Rules of Court.  The result is a simple collection case that has
 Purpose of consolidation remained pending for twenty-seven years now.
 to avoid multiplicity of suits, to guard  What the Spouses Yu did in filing the 2 cases in
against oppression and abuse, to prevent different branches of the court may be held to be
delays, to clear congested dockets, to tantamount to forum shopping which not only put
simplify the work of the trial court the respondents to additional unnecessary expense,
 in short, the attainment of justice with the but wasted the precious time of the courts as well.
least expense and vexation to the parties
litigants Dispositive: CA decision affirmed with modification.

2
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.