FACTS:

The case involves a petition for certiorari filed by Steel Corporation of the Philippines (SteelCorp) assailing the consolidation order of the Court of Appeals (CA) in a case involving Deutsche Bank AG and Vitarich Corporation. SteelCorp entered into a loan agreement with a consortium of lending banks, including RCBC. RCBC assigned its loan obligations to Deutsche Bank AG. During the proceedings for SteelCorp's corporate rehabilitation, the Regional Trial Court (RTC) ordered the assignees to disclose the actual price paid for the assigned debts. Deutsche Bank AG challenged this order by filing a petition for certiorari with the CA. Meanwhile, Vitarich Corporation filed a petition to compel the assignees of transferred credits to disclose the amount paid by them to their assignors. The RTC denied Vitarich's motion, and it filed a petition before the CA. The CA granted SteelCorp's motion to consolidate the Deutsche Bank AG Petition with the Vitarich Petition, but Deutsche Bank AG challenged this consolidation order and filed a special civil action before the Supreme Court.

ISSUES:

1. Whether or not the Court of Appeals gravely abused its discretion in ordering the consolidation of the Deutsche Bank AG Petition with the Vitarich Petition.

2. Whether the consolidation of the Deutsche Bank AG Petition and the Vitarich Petition is proper.

3. Whether the two cases are related and involve the same parties and/or related questions of fact and/or law.

4. Whether consolidation of the cases is proper when they involve the resolution of a common question of law or fact.

5. Whether consolidation of the cases is necessary to avoid conflicting decisions.

6. Whether the consolidation of the Deutsche Bank AG Petition and the Vitarich Petition is proper.

RULING:

1. The Court agrees with Deutsche Bank AG that the consolidation order was improper. The cases did not have related factual antecedents and arose from separate petitions for rehabilitation of different corporations. There were no interconnected transactions or identical properties involved. The fact that the two cases had a common question of law was not enough to consider them related and proper for consolidation. The CA gravely abused its discretion in ordering the consolidation, and the consolidation order was set aside.

2. The consolidation of the Deutsche Bank AG Petition and the Vitarich Petition is not proper. The two cases are not related and do not involve the same parties and/or related questions of fact and/or law. The order of consolidation by the CA on the sole ground that the cases involved a common question of law was not in order.

3. Consolidation of cases is not necessarily proper when they involve the resolution of a common question of law or fact. The cases must also involve the same parties and closely related subject matters.

4. Consolidation of cases is necessary to avoid conflicting decisions, but only when the cases are intimately related and involve the same parties and subject matter.

5. The Court held that the consolidation of the two petitions is not proper. The Court ruled that the exercise of discretion by the Court of Appeals (CA) in ordering the consolidation was less than judicious considering that the two cases were not intimately and substantially related. The Court emphasized that consolidation may only be effected if the cases are related and that assignment is different from consolidation. The Court reversed and set aside the resolutions of the CA.

PRINCIPLES:

• Actions involving a common question of law or fact may be consolidated when they arise from the same act, event, or transaction, involve the same or like issues, and depend largely or substantially on the same evidence. (Teston v. Development Bank of the Philippines)

• Consolidation of cases is allowed when the cases involve the same parties and/or related questions of fact and/or law. (Section 3, Rule III of the 2009 Interim Rules of Court on Corporate Rehabilitation)

• Consolidation of cases is proper when two or more cases involve the same parties and affect closely related subject matters. (Steel Corporation of the Philippines v. Equitable PCI Bank, Inc.)

• Consolidation aims to avoid multiplicity of suits, guard against oppression and abuse, prevent delays, clear congested dockets, and simplify the work of the trial court.

• Consolidation contributes to the swift dispensation of justice and provides the parties a just, speedy, and inexpensive determination of their cases.

• Consolidation is warranted when there is a real need to forestall the possibility of conflicting decisions being rendered in cases involving the same facts and common questions of law.

• 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.

• 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.

• The consolidation of cases becomes mandatory when they involve the same parties and the same subject matter in order to avoid confusion, unnecessary costs and expenses, and the multiplicity of suits.

• 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.

• 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.

• The purpose of consolidation is to avoid multiplicity of suits, guard against oppression or abuse, prevent delays, and save the litigants unnecessary acts and expense.

• The non-consolidation of cases may be upheld if it defeats the very purpose of consolidation and prejudices the right of one of the parties.

• The consolidation of cases may be disallowed if it would complicate procedural requirements, delay the resolution of the cases, or if it runs counter to the purpose of consolidation.