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METROPOLITAN BANK v. EDILBERTO G. SANDOVAL

FACTS:

This case involves a civil action filed by the Republic of the Philippines against various defendants, including the spouses Genito, seeking to recover allegedly ill-gotten wealth. Among the properties subject to the complaint were two parcels of land registered in the names of the spouses Genito. Asian Bank, one of the defendants, claimed ownership of the properties and sought to be impleaded separately from the other defendants. Asian Bank argued that its cause of action was distinct from the main claim against the original defendants. The Republic argued that a separate trial was appropriate because the issue concerning Asian Bank was whether it had knowledge that the properties were subject to the complaint, while the issue concerning the original defendants was whether they had acquired wealth unlawfully. The Sandiganbayan granted the Republic's motion for separate trial, ruling that the action against Asian Bank was separate and distinct from the claims against the original defendants. Metrobank, as the successor-in-interest of Asian Bank, filed a petition for certiorari to challenge the Sandiganbayan's ruling, claiming that a separate trial would violate its right to due process. Metrobank argued that it should be given the opportunity to refute the Republic's claims and that the character of the properties as ill-gotten wealth was relevant to determine whether Asian Bank acquired them in bad faith.

ISSUES:

  1. Whether or not separate trials are proper in this case.

  2. Whether or not the Sandiganbayan has jurisdiction over the Republic's claim against Asian Bank (Metrobank).

  3. Whether separate trials are necessary in order to prevent prejudice or confusion and serve the ends of justice.

  4. What factors should be considered in determining whether to order separate trials.

  5. Whether the Sandiganbayan's grant of a separate trial for the issue against Asian Bank was justified.

  6. Whether the Sandiganbayan has exclusive original jurisdiction over the matter involving Metrobank.

  7. Whether the Sandiganbayan has jurisdiction over the amended complaint in Civil Case No. 0004 as against Metropolitan Bank and Trust Company.

  8. Whether the separate trial granted to the Republic of the Philippines as to Metropolitan Bank and Trust Company is valid.

RULING:

  1. The Sandiganbayan gravely abused its discretion in granting the Republic's motion for separate trial.

  2. The Sandiganbayan was correct in upholding its jurisdiction over the Republic's claim against Asian Bank (Metrobank).

  3. Separate trials are not the usual course to be followed and remain the exception rather than the rule. The moving party has the burden of establishing that separate trials are necessary to prevent prejudice or confusion and serve the ends of justice.

  4. The two primary factors to be considered in determining whether to order separate trials are efficient judicial administration and potential prejudice. Other factors that may also be considered include convenience of the parties, judicial economy, and avoiding substantial prejudice to the parties.

  5. The Sandiganbayan's grant of a separate trial for the issue against Asian Bank was arbitrary and constituted a grave abuse of discretion. The separate trial would cause prejudice to Metrobank as it would not be given the opportunity to rebut or explain its side, and the properties would be declared liable to forfeiture in favor of the Republic without Metrobank being able to contest it. The disadvantages to Metrobank would outweigh any benefits to the Republic from the separation of trials. Hence, the Sandiganbayan's decision was contrary to the Constitution, the law, and jurisprudence.

  6. The Sandiganbayan has exclusive original jurisdiction over the matter involving Metrobank. The amended complaint filed by the Republic against Asian Bank seeks to recover ill-gotten wealth, which falls under the Sandiganbayan's jurisdiction as provided by Presidential Decree No. 1606, as amended. The cause of action against Asian Bank is incidental or necessarily connected to the cause of action against the original defendants, making it within the Sandiganbayan's jurisdiction.

  7. The Court declares that the Sandiganbayan has original exclusive jurisdiction over the amended complaint in Civil Case No. 0004 as against Metropolitan Bank and Trust Company.

  8. The Court partially grants the petition for certiorari, annulling and setting aside the Resolution granting the motion for separate trial of the Republic of the Philippines as to Metropolitan Bank and Trust Company. The Sandiganbayan is directed to hear Civil Case No. 0004 against Metropolitan Bank and Trust Company in the same trial conducted against the original defendants in Civil Case No. 0004.

PRINCIPLES:

  • The court has the discretion to order separate trials of any claim, cross-claim, counterclaim, or third-party complaint, or of any separate issue or of any number of claims, cross-claims, counterclaims, third-party complaints or issues, in furtherance of convenience or to avoid prejudice to any party. This is in accordance with Section 2, Rule 31 of the Rules of Court.

  • The aim and purpose of separate trials is to further convenience, avoid delay and prejudice, and serve the ends of justice. The interest of efficient judicial administration is to be controlling rather than the wishes of the parties.

  • The court should resort to separate trials only in the exercise of informed discretion when it believes that separation will achieve the purposes of the rule.

  • The Sandiganbayan has exclusive original jurisdiction over all cases involving the recovery of ill-gotten wealth pursuant to Executive Orders No. 1, No. 2, No. 14 and No. 14-A issued in 1986.

  • Separate trials are ordered to isolate issues, avoid lengthy litigation, encourage settlement discussions, and expedite the proceedings and be economical.

  • Separate trials should be the exception rather than the rule.

  • The moving party has the burden of establishing the necessity for separate trials.

  • Courts order separate trials only when clearly necessary.

  • Separate trials should further the convenience of the parties, promote judicial economy, and avoid substantial prejudice.

  • Separate trials should be allowed to prevent prejudice, further convenience, promote justice, and give a fair trial to all parties.

  • A single trial is generally preferred to lessen delay, expense, and inconvenience to the parties and the courts.

  • Exceptions to the general rule of having all issues in a case tried at one time are permitted only when there are extraordinary grounds for conducting separate trials or when it avoids prejudice, promotes convenience, or ensures justice.

  • The Sandiganbayan has original and exclusive jurisdiction not only over principal causes of action involving recovery of ill-gotten wealth but also over all incidents arising from, incidental to, or related to such cases.

  • Cases of the Commission on alleged ill-gotten properties fall under the exclusive and original jurisdiction of the Sandiganbayan, and all incidents arising from, incidental to, or related to such cases fall likewise under the Sandiganbayan's exclusive and original jurisdiction.

  • Jurisdiction over a case depends on the allegations in the complaint and the character of the reliefs prayed for, irrespective of whether the reliefs sought are the main or only claim of the plaintiff.