Cases Litis Pendentia Res Judicata
Cases Litis Pendentia Res Judicata
Cases Litis Pendentia Res Judicata
FILM DEVELOPMENT COUNCIL OF THE PHILIPPINES, Petitioner, SECTION 45. Time of Payment. – The tax shall be due and payable
vs. within the first twenty (20) days of the succeeding month.
SM PRIME HOLDINGS, INC., Respondent.
On June 7, 2002, Congress approved R.A. No. 91674 which created
DECISION the Film Development Council of the Philippines, herein petitioner.
Petitioner’s mandate includes the development and implementation of
"an incentive and reward system for the producers based on merit to
VILLARAMA, JR., J.:
encourage the production of quality films."5 The Cinema Evaluation
Board (CEB) was established to review and grade films in accordance
Petitioner appeals the Orders1 dated February 21, 2011 and July 25, with criteria and standards and procedures it shall formulate subject to
2011 of the Regional Trial Court (RTC) of Pasig City, Branch 166 the approval of petitioner.
which granted respondent's motion to dismiss on the ground of litis
pendentia.
Films reviewed and graded favorably by the CEB are given the
following privileges:
The factual antecedents:
Section 13. Privileges of Graded Films. - Films which have obtained an
Respondent SM Prime Holdings, Inc. is the owner and operator of "A" or "B" grading from the Council pursuant to Sections 11 and 12 of
cinema houses at SM Cebu in Cebu City. Under Republic Act (R.A.) this Act shall be entitled to the following privileges:
No. 7160 otherwise known as the Local Government Code of 1991,
owners, proprietors and lessees of theaters and cinema houses are
a. Amusement tax reward. - A grade "A" or "B" film shall entitle its
subject to amusement tax as provided in Section 140, Book II, Title
producer to an incentive equivalent to the amusement tax imposed and
One, which reads:
collected on the graded films by cities and municipalities in Metro
Manila and other highly urbanized and independent component cities
SECTION 140. Amusement Tax- in the Philippines pursuant to Sections 140 and 151 of Republic Act
No. 7160 at the following rates:
(a) The province may levy an amusement tax to be collected from the
proprietors, lessees, or operators of theaters, cinemas, concert halls, 1. For grade "A" films - 100% of the amusement tax collected on such
circuses, boxing stadia, and other places of amusement at a rate of not films; and
more than thirty percent (30%) of the gross receipts from admission
fees.
2. For grade "B" films. - 65% of the amusement tax collected on such
films. The remaining thirty-five (35%) shall accrue to the funds of the
(b) In the case of theaters or cinemas, the tax shall first be deducted Council.
and withheld by their proprietors, lessees, or operators and paid to the
provincial treasurer before the gross receipts are divided between said
For the purpose of implementing the above incentive system, R.A. No.
proprietors, lessees, or operators and the distributors of the
9167 mandates the remittance of the proceeds of the amusement tax
cinematographic films.
collected by the local government units (LGUs) to petitioner.
xxxx
Section 14. Amusement Tax Deduction and Remittances. - All revenue
from the amusement tax on the graded film which may otherwise
(d) The sangguniang panlalawigan may prescribe the time, manner, accrue to the cities and municipalities in Metropolitan Manila and highly
terms and conditions for the payment of tax. In case of fraud or failure urbanized and independent component cities in the Philippines
to pay the tax, the sangguniang panlalawigan may impose such pursuant to Section 140 of Republic Act. No. 7160 during the period
surcharges, interest and penalties as it may deem appropriate. the graded film is exhibited, shall be deducted and withheld by the
proprietors, operators or lessees of theaters or cinemas and remitted
within thirty (30) days from the termination of the exhibition to the
On June 21, 1993, the Sangguniang Panglunsod of Cebu City Council which shall reward the corresponding amusement tax to the
approved City Tax Ordinance No. LXIX2 pursuant to Section 140, in
producers of the graded film within fifteen (15) days from receipt
relation to Section 1513 of the Local Government Code of 1991. thereof.
Chapter XI of said ordinance provides:
SECTION 43. Manner of Payment. – In the case of theaters or On January 27, 2009, petitioner through the Office of the Solicitor
cinemas, the tax shall first be deducted and withheld by their General (OSG) sent a demand letter to respondent for the payment of
proprietors, lessee, or operators and paid to the city treasurer before the sum of ₱76,836,807.08 representing the amusement tax rewards
the gross receipts are divided between said proprietors, lessee, due to producers of 89 films graded "A" and "B" which were shown at
operators and the distributors of the cinematographic films. SM cinemas from September 11, 2003 to November 4, 2008.7
1
Sometime in May 2009, the City of Cebu filed in the RTC of Cebu City that from the time R.A. No. 9167 took effect up to the present, all the
(Cebu City RTC) a petition8 for declaratory relief with application for a cities and municipalities in Metropolitan Manila and highly urbanized
writ of preliminary injunction against the petitioner, docketed as Civil and independent component cities in the Philippines, with the sole
Case No. CEB-35529. The City of Cebu sought to declare Section 14 exception of Cebu City and a number of theater establishments
of R.A. No. 9167 as invalid and unconstitutional on grounds that: (1) it therein, have unanimously acceded to and have faithfully complied with
violates the basic policy on local autonomy; (2) it constitutes an undue the mandate of said law notwithstanding the absence of a MOA.
limitation of the taxing power of LGUs; (3) it unduly deprives LGUs of
the revenue from the amusement tax imposed on theatre owners and
Respondent filed its Reply16 to petitioner’s Comment maintaining that
operators; and (4) it amounts to technical malversation since revenue
its remittance of the amusement tax incentive reward to the City of
from the collection of amusement taxes that would otherwise accrue to
Cebu extinguished its obligation to petitioner, and arguing that the case
and form part of the general fund of the LGU concerned would now be
should be dismissed on the additional ground of litis pendentia.
directly awarded to a private entity – the producers of graded films –
bypassing the budget process of the LGU and without the proper
appropriation ordinance from the sanggunian.9 On August 13, 2010, respondent filed in Civil Case No. CEB-35529 a
Motion for Leave to File and Admit Attached Comment-in-
Intervention.17 In its Comment-in-Intervention With Interpleader,
A temporary restraining order (TRO) was issued by the Cebu City RTC
respondent prayed that the judgment on the validity and
enjoining petitioner and its duly constituted agents from collecting the
constitutionality of Sections 13 and 14 of R.A. No. 9167 include a
amusement tax incentive award from the owners, proprietors or
pronouncement on its rights and duties as a consequence of such
lessees of theaters and cinema houses within the City of Cebu;
judgment, as it clearly has a legal interest in the success of either party
imposing surcharge on the unpaid amount; filing any case or suit of
in the case.18 On October 21, 2010, the Cebu City RTC granted
whatever kind or nature due to or arising from the failure to deduct,
respondent’s motion for intervention.19
withhold and remit the amusement tax incentives award on the graded
films of petitioner; and initiating administrative or criminal prosecution
against the said owners, proprietors or lessees.10 On February 21, 2011, the Pasig City RTC issued the assailed order
granting the motion to dismiss, holding that the action before the Cebu
City RTC (Civil Case No. CEB-35529) is the appropriate vehicle for
On October 16, 2009, petitioner sued the respondent for the payment
litigating the issues between the parties in Civil Case No. 72238.
of ₱76,836,807.08 representing the unpaid amusement tax incentive
Moreover, said court found all the elements of litis pendentia present
reward (with 5% surcharge for each month of delinquency) due to the
and accordingly dismissed the complaint. Petitioner’s motion for
producers of 89 graded films which were shown at SM Cinemas in
reconsideration was likewise denied. In a direct recourse to this Court,
Cebu City from September 11, 2003 to November 4, 2008, plus a 5%
petitioner advances the following questions of law:
surcharge for each month of delinquency until fully paid. Said collection
suit was docketed as Civil Case No. 72238 of the RTC of Pasig City
(Pasig City RTC), Branch 166.11 I
Petitioner filed a Comment (In Lieu of Answer)12 in Civil Case No. CEB- THE RTC, BRANCH 166, OF PASIG CITY UTTERLY IGNORED AND
35529 praying for the dismissal of the petition filed by the City of Cebu. DISREGARDED THE WELL-SETTLED RULE THAT UNLESS AND
UNTIL A SPECIFIC PROVISION OF LAW IS DECLARED INVALID
AND UNCONSTITUTIONAL, THE SAME IS ENTITLED TO
Meanwhile, respondent filed a Motion to Dismiss13 in Civil Case No.
OBEDIENCE AND RESPECT.
72238 arguing that petitioner’s complaint merits outright dismissal
considering that its claim had already been extinguished by
respondent’s prior payment or remittance of the subject amusement II
taxes to the City of Cebu. Respondent called attention to Section 26 of
the Implementing Rules and Regulations (IRR) of R.A. No. 9167 which
directed petitioner to execute a Memorandum of Agreement (MOA) THE RTC, BRANCH 166, OF PASIG CITY ERRED IN DISMISSING
with proprietors, operators and lessees of theaters and cinemas as well THE COMPLAINT IN CIVIL CASE NO. 72238 ON THE GROUND OF
LITIS PENDENTIA.20
as movie producers, on the systems and procedures to be followed for
the collection, remittance and monitoring of the amusement taxes
withheld on graded films. In the apparent absence of such MOA and Petitioner reiterates that every law has in its favor the presumption of
the "general procedure/process" duly adopted by all proprietors, constitutionality, and unless and until a specific provision of law is
operators and lessees of theaters or cinemas, respondent has been declared invalid and unconstitutional, the same is valid and binding for
withholding such taxes and remitting the same to the City of Cebu all intents and purposes. In dismissing the complaint, the Pasig City
pursuant to Cebu City Tax Ordinance No. LXIX, as shown by the RTC abdicated its solemn duty and jurisdiction to rule on the
Certification14 dated February 5, 2009 issued by the Office of the constitutional issues raised by respondent in Civil Case No. 72238
Treasurer of Cebu City stating that respondent "had religiously remitted upon the mistaken assumption that only the Cebu City RTC in Civil
their monthly amusement taxes due to the Cebu City Government." Case No. CEB-35529 can directly determine the constitutionality of
Respondent pointed out that even the Cebu City Government Sections 13 and 14 of R.A. No. 9167 and the indispensability of a MOA
recognizes that when it receives the amusement taxes collected or in the remittance to petitioner of amusement tax rewards due to the
withheld by the owners, operators and proprietors of theaters and producers of graded films. Petitioner further contends that, contrary to
cinema houses on graded films, it is mandated to forward the said the ruling of the Pasig City RTC, the principle of judicial courtesy is not
taxes to petitioner. applicable because a judgment in Civil Case No. CEB-35529 will not
result in rendering moot the issues brought before the Pasig City RTC
In its Comment15 on the motion to dismiss, petitioner argued that in Civil Case No. 72238.
Section 14 of R.A. No. 9167 is valid and constitutional. As to
respondent’s defense of prior payment, petitioner asserted that the The petition has no merit.
execution of a MOA with the proprietors, owners and lessees of
theaters and cinema houses is not a condition sine qua non for a valid
enforcement of the provisions of R.A. No. 9167. The IRR cited by We do not subscribe to petitioner’s view that the dismissal of the
respondent cannot prevail over the clear import of the law on which it is complaint in Civil Case No. 72238 amounts to an abdication of the
based, and hence respondent cannot invoke it to excuse non-payment Pasig City RTC’s concurrent jurisdiction to settle constitutional
of the amusement tax incentive rewards due to the producers of questions involving a statute or its implementing rules. The 1997 Rules
graded films which should have been remitted to petitioner in of Civil Procedure, as amended, provides for specific grounds for the
accordance with Section 14 of R.A. No. 9167. Petitioner pointed out dismissal of any complaint in civil cases including those where the trial
2
court has competence and authority to hear and decide the issues In this case, what petitioner failed to take into account is that the Cebu
raised and relief sought. One of these grounds is litis pendentia. City RTC allowed respondent to intervene in Civil Case No. CEB-
35529 by way of an interpleader action as to which government entity –
whether petitioner or the Cebu City Government – should have
Litis pendentia, as a ground for the dismissal of a civil action, refers to
remitted the amusement taxes it collected from the admission fees of
a situation where two actions are pending between the same parties
graded films shown in respondent’s cinemas in Cebu City. It must be
for the same cause of action, so that one of them becomes
noted that since 1993 when City Tax Ordinance No. LXIX was
unnecessary and vexatious.21It is based on the policy against
enforced, respondent had been faithfully remitting amusement taxes to
multiplicity of suits22 and authorizes a court to dismiss a case motu
the City of Cebu and because of the collection suit filed by petitioner,
proprio.23
such defense of prior payment and evidence to prove it which
respondent could have presented at the trial in Civil Case No. 72238
Section 1(e), Rule 16 of the 1997 Rules of Civil Procedure, as would be the same defense and evidence necessary to sustain
amended, thus provides: respondent’s interpleader action in Civil Case No. CEB-35529 before
the Cebu City RTC. Also, in both cases, respondent had raised the
matter of conflicting provisions of R.A. No. 9167 and Local Government
SECTION 1. Grounds.Within the time for but before filing the answer Code of 1991, while petitioner pleaded and argued the constitutionality
to the complaint or pleading asserting a claim, a motion to dismiss may and validity of Sections 13 and 14 of R.A. No. 9167.
be made on any of the following grounds:
3
Petitioner's insistence that the Pasig City RTC proceed with trial
notwithstanding the pendency of Civil Case No. CEB-35529 before the
Cebu City RTC is thus untenable. To allow the parties to litigate the
same issues upon the same evidence and defenses will only defeat the
public policy reasons behind litis pendentia, which, like the rule on
forum shopping, aims to prevent the unnecessary burdening of our
courts and undue taxing of the manpower and financial resources of
the judiciary; to avoid the situation where co-equal courts issue
conflicting decisions over the same cause; and to preclude one party
from harassing the other party through the filing of an unnecessary or
vexatious suit.32
No pronouncement as to costs.
SO ORDERED.
4
G.R. No. 190814 October 9, 2013 her Officer’s Return dated December 10, 2007,5process server Linda
Fallorin stated the following: (1) she initially attempted to serve the
summons upon Michelle and Santos on December 7,2007 at the
MICHELLE LANA BROWN- ARANETA, for herself and
Anonas residence, only to be told by one Roberto Anonas, who
representing her minor daughters, ARABELLA MARGARITA B.
refused to receive the summons, that both were out at that time; and
ARANET A and A V ANGELINAMYKAELA B.
(2) on December 10, 2007, she was finally able to serve the summons
ARANETA, Petitioners,
upon Michelle and Santos by substituted service through the driver of
vs.
Santos’ husband.
JUAN IGNACIO ARANETA, Respondent.
1. Immediately issue a Provisional Order granting 1. She is not inclined to issue a [TPO] in favor of respondent
[him]visitation rights with respect to the minors [Ava and Ara] at this time because she initially questioned the jurisdiction of
x x x during the pendency of these proceedings;
this Court over her person and only resorted to this Urgent
Ex-Parte Motion for a Protective Order after she realized that
2. Immediately issue an ex parte Hold Departure Order the Court had every intention of maintaining jurisdiction over
preventing the departure of [both] minors x x x from the this case x x x. It was emphasized that the Court does not
country; and issue Protective Orders over a person who has not bothered
to appear in Court x x x. Until the respondent herself shows
up in order to recognize the jurisdiction of this Court over her
3. After appropriate proceedings, render judgment granting and in order to substantiate the allegations in her Urgent
him joint custody, or alternatively, granting him permanent Motion, there is no basis for this Court to address the
visitation rights, over both his legitimate children x x x.4 matters contained in the said Urgent Ex-Parte Motion.
To facilitate service of summons, Juan Ignacio, via a Motion and 2. Secondly, x x x even assuming for the sake of argument
Urgent Manifestation of November 27, 2007, would inform the Makati that the petitioner is, as respondent described him to be,
RTC that Michelle and Santos may have transferred to No. 408 temperamental, violent, a habitual drug user and a
Anonas Street, Ayala Alabang Village, Muntinlupa City (Anonas womanizer, these qualities cannot, per se, prevent him from
residence), an address different from what he provided in his basic exercising visitation rights over his children because these
petition, referring to the Molave Drive residence in the same village. In
5
are rights due to him inherently, he being their biological (2) On April 14, 2008, Juan Ignacio filed in Civil Case No. M-
father.12 6543 a "Motion to Dismiss Petition with Prayer to Lift
[TPO]"19 anchored on several grounds, foremost of which are
the following: (a) litis pendentia, Juan Ignacio noting in this
During the same hearing, the Makati RTC granted Juan Ignacio
regard that the Makati RTC is competent to grant in its SP
visitation rights on one (1) Saturday and Sunday in January 2008
PROC. Case No. M-6543 the very same reliefs Michelle
considering that he was unable to see his children on the days granted
seeks in Civil Case No. M-6543, pursuant to Sections 17 and
under the December 21, 2007 Order.
18 of the Rule on Custody of Minors;20 (b) in view of item (a)
above, the Makati RTC, having first assumed jurisdiction
Subsequently, by its Order of January 21, 2008, as would later be over identical subject matters, issues and parties, does so to
effectively reiterated by another Order 13 of March 7, 2008, the Makati the exclusion of the Muntinlupa RTC; and (c) Michelle’s act
RTC resolved to deny admission of Michelle’s answer to the petition for of filing her petition for protection order before the
custody and declared her in default, pertinently disposing thusly: Muntinlupa RTC constitutes, under the premises, forum
shopping, a practice proscribed owing to the possibility of
different courts arriving at conflicting decisions. Juan Ignacio
WHEREFORE, in view of the foregoing, respondent Araneta’s Motion would in fact stress that the TPO thus issued by the
to Admit Answer of January 2, 2008 is herein DENIED for lack of merit.
Muntinlupa RTC directing him to stay at least a kilometer
away from his children already conflicted with the Makati
Because of respondent Araneta’s failure to file her responsive pleading RTC-issued provisional orders granting him visitation rights
within the reglementary period, x x x respondent Araneta isherein over them.
declared in DEFAULT in this proceedings.
(3) By Order of May 12, 2008, the Muntinlupa RTC,
As a consequence of this ruling, x x x the petitioner is allowed to conceding the exclusionary effect of the assumption at the
present evidence ex-parte to substantiate the allegation in his Petition first instance by the Makati RTC of jurisdiction on the issue
x x x.14 of custody on Ava and Ara and the likelihood of the issuance
by either court of clashing decisions, partially granted Juan
Ignacio’s motion to dismiss and accordingly modified the
On January 21, 2008 also, Michelle interposed a Motion to Withdraw TPO issued on March 31, 2008. As thus modified, the
Urgent Ex-Parte Motion for Protective Order, there pointing out that no protection order, or to be precise, the reliefs provided in favor
right of Juan Ignacio, if any, will be affected if the said urgent motion is of Michelle in said TPO shall exclude from its coverage the
withdrawn or expunged from her answer. And obviously to sway the orders issued by the Makati RTC in the exercise of its
Makati RTC’s mind of the resulting insignificance of such withdrawal, if jurisdiction on the pending custody case.
approved, Michelle cited the ensuing observation thus made by the
court during the hearing on January 4, 2008:
In another Order of June 30, 2008, the Muntinlupa RTC
denied Juan Ignacio’s Motion for Reconsideration of the
COURT: earlier May 12, 2008 Order on the ground that such a motion
is a prohibited pleading.21
Well, I agree, she should really appear but whether or not she should
really appear here and substantiate her allegations for the issuance of (4) Meanwhile, Michelle, in connection with certain orders of
a protective order as far as I am concerned is irrelevant insofar as the the Makati RTC in the custody case, denying her motion to
enforcement of petitioner’s visitation rights are concerned, this case is admit answer and its jurisdictional issue pronouncements,
for custody, this is not a case for the issuance of protective orders that went to the CA on certiorari via a petition docketed as CA-
is only a counter manifestation that she is seeking.15 G.R. SP No. 103392.
It is upon the foregoing set of events and proceedings that Michelle, on On August 28, 2008, in CA-G.R. SP No. 103392, the CA rendered a
March 25, 2008, instituted, pursuant to RA 9262, a Petition For judgment finding partly for Michelle, as petitioner, it being the appellate
Temporary and Permanent Protection Order16 (Petition for Protection court’s determination that the substituted service of summons upon her
Order) before the RTC in Muntinlupa City, docketed as Civil Case No. in the custody suit was defective and irregular. Accordingly, the period
08-023.Thereat, Michelle claimed, among other things, that in the within which Michelle was to file an answer, so the CA declared, did
course of their marriage, Juan Ignacio made her and their children not start to run and, hence, the denial by the Makati RTC of her motion
engage in sexual acts inimical to their emotional, physical and to admit answer in the custody case and corollarily, its holding that she
psychological development and well-being; that he engaged in is in default, by virtue of its Orders dated January 21, 2008 and March
perverted sexual acts with friends, victimizing her and the children; that 7, 2008, were unwarranted and ought to be nullified. Neither of the
he has consistently failed and refused to support their family; and that parties appealed the foregoing Decision. The CA Decision, thus,
he has a violent temper and was consistently harassing and became final. The fallo of the said CA Decision reads:
threatening her to get sole custody of the children. Michelle
volunteered the information that, per her therapist, she is suffering from
Battered Woman’s Syndrome.17 WHEREFORE, the foregoing considered, the instant petition is hereby
PARTLY GRANTED. Accordingly, the assailed Orders of 21January
2008 and 7 March 2008 are REVERSED and SET ASIDE while the
In the verification portion of her petition for protection order, Michelle Orders of 29 February 2008 and 31 March 2008, in so far as the denial
stated that "there is x x x a pending petition for the custody of our of petitioner’s Motion for Inhibition is concerned, are AFFIRMED. No
children in the [RTC] Br. 60, Makati City, x x x Civil Case No. M- costs.
6543."18
SO ORDERED.22
The following events and proceedings then transpired:
On the one hand, this Court hereby notes that Private Respondent Before anything else, however, the Court wishes to point out disturbing
herself recognizes the jurisdiction of the Makati RTC to issue a TPO. It developments in this proceeding which ought not to be swept under the
was only after the Makati RTC denied her prayer for a TPO when she rug on the simplistic pretext that they may not be determinative of the
filed a petition before the Muntinlupa RTC asking for the issuance of a outcome of this case. But first, some basic premises on record.
TPO. It is thus highly disturbing that the Private Respondent sought
another forum in order to try to obtain a favorable judgment. Thus, as
First, as correctly stated in this petition, Michelle withdrew her Ex Parte
aptly pointed out by the Petitioner, some sort of forum-shopping was
Motion for Issuance of Protective Order in the custody case prior to her
committed.
filing of her Petition for Protection Order with the Muntinlupa RTC. It
should be made clear, however, that she filed said motion to withdraw
On the other hand, if the Court were to dismiss the present petition on on January 21, 2008, or after the Makati RTC, in its Order dated
the ground that a petition for certiorari is a prohibited pleading, it would January 4,2008, had, for all intents and purposes, denied the said ex
have to close its eyes to the fact that the Private Respondent willfully parte motion. To recapitulate, the Makati RTC judge made it of record
committed forum-shopping. To dismiss the present petition would, in that she was not inclined to issue a protective order in favor of a
effect, "reward" her for this negative act. This, the Court cannot person, i.e., petitioner Michelle, who has not bothered to appear in
countenance. court, even assuming, she adds, that the person against whom the
protection order is directed, i.e., Juan Ignacio, is prone to violence, a
drug user and a womanizer.
xxxx
8
WHEREFORE, the foregoing considered, the instant petition is hereby confusion, the Court adheres to the rules against forum shopping, and
PARTLY GRANTED. Accordingly, the assailed Orders of 21January a breach of these rules results in the dismissal of the case. 39
2008 and 7 March 2008 are REVERSED and SET ASIDE while the
Orders of 29 February 2008 and 31 March 2008, in so far as the denial
Considering the above doctrinal pronouncements on forum shopping,
of petitioner’s Motion for Inhibition is concerned, are AFFIRMED. No
We find all the badges of this deplorable, docket-clogging practice
costs.
present in this case.
SO ORDERED.31
As a result or in anticipation of an adverse ruling of the Makati RTC,
petitioner sought the favorable opinion of the Muntinlupa RTC
Withal, the Court finds it downright offensive and utterly distasteful that
petitioner raised the following as one of the issues in this appellate
As discussed above, the presiding judge of the Makati RTC, in the
proceeding:
custody case, made of record that she was not inclined to issue a
protection order in favor of Michelle because she did not bother to
Whether or not the petitioners are guilty of forum-shopping when the appear in Court and that the allegations against Juan Ignacio cannot,
Petition for Custody of private respondent Araneta was dismissed by per se, prevent him from exercising visitation rights over his children.
the Court of Appeals on the ground that the RTC of Makati City After this adverse ruling, Michelle sought the favorable opinion of the
Branch60 did not acquire jurisdiction because the summons was not Muntinlupa RTC by filing an independent Petition for Protection Order.
served personally upon herein Petitioner Michelle Lana Brown
Araneta.32 (Emphasis supplied.)
The cases have identical parties
Thus, it has been held that there is forum shopping (1) whenever as a In the custody case, Juan Ignacio mainly asserted his right, as father,
result of an adverse decision in one forum, a party seeks a favorable to visit his children and enjoy joint custody over them. He prayed for a
decision (other than by appeal or certiorari) in another; or (2) if, after he judgment granting him joint custody, or alternatively, permanent
has filed a petition before the Supreme Court, a party files another visitation rights over Ava and Ara.
before the CA since in such case said party deliberately splits appeals
"in the hope that even as one case in which a particular remedy is
In disposing of the custody case, the Makati RTC is expected, following
sought is dismissed, another case(offering a similar remedy) would still
the rationale behind the issuance of the Rule on Custody of Minors, to
be open"; or (3) where a party attempts to obtain a preliminary
consider, among others, the best interest of the children,43 any threat
injunction in another court after failing to obtain it from the original
or danger of physical, mental, sexual or emotional violence which
court.38
endangers their safety and best interest, their health, safety and
welfare,44 any history of child or spousal abuse by the person seeking
The evil sought to be avoided by the rule against forum shopping is the custody,45 habitual use of alcohol, dangerous drugs or regulated
rendition by two competent tribunals of two separate and contradictory substances,46 marital misconduct,47 and the most suitable physical,
decisions. Unscrupulous party litigants, taking advantage of a variety of emotional, spiritual, psychological and educational environment for the
competent tribunals, may repeatedly try their luck in several different holistic development and growth of the minor.48
fora until a favorable result is reached. To avoid the resultant
9
Michelle’s answer and motion for issuance of protection order in the x x x There is therefore, no conflict of jurisdiction in this case but since
custody case contained allegations of psychological, sexual, emotional the petitioner filed a Petition for Certiorari in the Court of Appeals,
and economic abuse she and her children suffered at the hands of which includes the issue of custody, we submit that the matter of
Juan Ignacio to defeat his asserted right to have joint custody over Ava custody pendente lite including visitation, should not and can not be
and Ara and as argument that the grant of visitation rights in his favor resolved by this Honorable Court without conflicting with the
will not be in the best interest of the children. These allegations of Temporary Protection Order of a co-equal court, the RTC of
abuse were in substance the very same ones she made in her Petition Muntinlupa City. x x xx
for Protection Order.
xxx
Juan Ignacio’s rights and reliefs prayed for are dependent on and, to
be sure, would be predicated on the question of whether or not
If the petitioner is granted visitation rights, the Honorable Court, with
granting him the desired custody or at least visitations rights over the
due respect would be allowing him to violate the TPO against him; the
children are in their best interest. In deciding this issue, the Makati
Honorable Court would then be rendering a conflicting
RTC will definitely have to reckon with and make a finding on
decision.50 (Emphasis supplied.)
Michelle’s allegations of psychological, sexual, emotional and
economic abuse.
No less than the Muntinlupa RTC itself recognized the resulting
aberration of its orders conflicting with that/those of the Makati RTC. As
Similarly, the Muntinlupa RTC must necessarily consider and make a
it were, the former, in its Order of May 12, 2008, resolving Juan
determination based on the very same facts and allegations on
Ignacio’s Motion to Dismiss with Prayer to Lift Temporary Protection
whether or not Michelle shall be entitled to the relief she prayed for in
Order, categorically stated that there may be orders in the protection
her own petition, in particular, a permanent protection order against
order case that would possibly conflict with the orders issued by the
Juan Ignacio.
Makati RTC in the custody case. So it was that to address these
possible conflicts, the Muntinlupa RTC partially granted Juan Ignacio’s
Elements of litis pendentia are present and any judgment Motion to Dismiss by modifying the reliefs provided under the TPO by
in the pending cases would amount to res judicata excluding from its coverage those orders issued by the Makati RTC in
the exercise of its jurisdiction over the custody case. Pursuant to the
foregoing Order of the Muntinlupa RTC, the December 21, 2007 and
Any judgment rendered in the pending cases, regardless of which party
January 4, 2008 Orders of the Makati RTC, granting Juan Ignacio
is successful, would amount to res judicata. Consider: If the Makati
visitation rights on Christmas Day and New Year’s Day and one (1)
RTC were to grant Juan Ignacio’s petition for custody, this would
Saturday and Sunday in January 2008, are not covered by the reliefs
necessarily mean that it would be in the best interest of the children if
under the TPO. Hence, despite the TPO directing Juan Ignacio to stay
he were allowed to visit and spend time with them and that granting
at least one (1) kilometer away from Ava and Ara, Juan Ignacio would
Juan Ignacio visitation rights would not pose any danger or threat to
still have the right to see his children by virtue of the orders issued by
the children.
the Makati RTC granting him temporary visitation rights. The said
Muntinlupa RTC Order reads:
On the other hand, a grant by the Muntinlupa RTC of Michelle’s prayer
for a permanent protection order would presuppose at the minimum
Based on the pleadings filed, this (Muntinlupa) Court holds that since
that it would be to the children’s best interest if Juan Ignacio is directed
the Makati Court first acquired jurisdiction over the issue of custody,
to keep away from them, necessary implying that he is unfit even to
the latter continues to exercise it, so that any disposition on the matter
visit Araand Ava. Conversely, if Juan Ignacio’s Petition for Custody
by this Court may result in the possibility of conflicting decisions/orders.
were denied, then it would mean that the Makati RTC gave weight and
credence to Michelle’s allegations of abuse and found them to be in the
best interest of the children to bar Juan Ignacio from visiting them. Wherefore, this Court partially grants respondent’s Motion to Dismiss
Thus, the Muntinlupa RTC should have no ground to deny Michelle’s insofar as those matters covered by A.M. No. 03-04-04-SC, Rule on
Petition for Protection Order pending before it. Custody of Minors and Writ of Habeas corpus in Relation to Custody of
Minors are concerned, which are within the jurisdiction of the Makati
Court, but continues to take cognizance on matters not included
The evil sought to be avoided by the rule against
therein (A.M. No. 03-04-04-SC) but within the protective mantle of R.A.
forum shopping is present in this case
No. 9262.
Civil Case No. 08-023 should, thus, be dismissed with prejudice for
being a clear case of forum shopping.
11
G.R. No. 173331 December 11, 2013 WHEREFORE, in view of the foregoing premises, defendant is hereby
directed to pay plaintiff the following:
FLORPINA BENAVIDEZ, Petitioner,
vs. 1. The amount of ₱4,810,703.21, covering the period from
NESTOR SALVADOR, Respondent. June 11, 1998 to January 11, 2000, exclusive of interest and
penalty charges until the said amount is fully paid;
DECISION
2. The amount of ₱50,000.00 as exemplary damages;
MENDOZA, J.:
3. The sum of 25% of the total obligation as and by way of
attorney’s fees; and,
This is a petition for review on certiorari assailing the November 22,
2005 Decision1 and the June 8, 2006 Amended Decision2 of the Court
of Appeals (CA). in CA-G.R. CV No. 73487, which affirmed and 4. Cost of suit.
modified the June 1, 2001 Decision3 of the Regional Trial Court.
Branch 74, Anti polo City (RTC-Antipolo) in Civil Case No. 00-5660.
SO ORDERED.5
The Facts:
Benavidez filed a motion for reconsideration but unfortunately for her,
RTC-Antipolo, in its August 10, 2001 Order,6denied her motion for lack
Sometime in February 1998, pet1t1oner Florpina of merit.
Benavidez (Benavidez) approached and asked respondent Nestor
Salvador (Salvador) for a loan that she would use to repurchase her
Frustrated, Benavidez appealed the June 1, 2001 Decision and the
property in Tanay, Rizal which was foreclosed by the Farmers Savings
August 10, 2001 Order of RTC-Antipolo to the CA. She argued, in
and Loan Bank, Inc. (Farmers Savings). After inspecting the said
chief, that early on, the trial court should have dismissed the complaint
property, Salvador agreed to lend the money subject to certain
for collection of sum of money filed by Salvador on grounds of litis
conditions. To secure the loan, Benavidez was required to execute a
pendentia and erroneous certification against forum shopping. She
real estate mortgage, a promissory note and a deed of sale. She was
claimed that prior to the filing of the said complaint against her, she
also required to submit a special power of attorney (SPA) executed
had already filed a complaint for the annulment of the promissory note
and signed by Benavidez’s daughter, Florence B.
evidencing her obligation against Salvador. According to her, there was
Baning (Baning), whom she named as the vendee in the deed of
substantial identity in the causes of action and any result of her
absolute sale of the repurchased property. In the SPA, Baning would
complaint for annulment would necessarily affect the complaint for
authorize her mother to obtain a loan and to constitute the said
collection of sum of money filed against her. She added that Salvador
property as security of her indebtedness to Salvador.
never informed RTC-Antipolo about the pending case before RTC-
Morong, rendering his certification on forum shopping erroneous.7
Pursuant to the agreement, Salvador issued a manager’s check in
favor of Benavidez in the amount of One Million Pesos (₱1,000,000.00)
Benavidez also argued that RTC-Antipolo erred in refusing to re-open
and released Five Hundred Thousand Pesos (₱500,000.00) in cash.
the case for pre-trial conference and disallowing her to present
For the loan obtained, Benavidez executed a promissory note, dated
evidence. She added that the absence of her counsel on the scheduled
March 11, 1998.
pre-trial conference caused her substantial prejudice. Though she was
not unmindful of the general rule that a client was bound by the
Benavidez, however, failed to deliver the required SPA. She also mistake or negligence of her counsel, she insisted that since the
defaulted in her obligation under the promissory note. All the postdated incompetence or ignorance of her counsel was so great and the error
checks which she had issued to pay for the interests were dishonored. committed was so serious as it prejudiced her and denied her day in
This development prompted Salvador to send a demand letter with a court, the litigation should have been reopened to give her the
corresponding statement of account, dated January 11, 2000. opportunity to present her case.8
Unfortunately, the demand fell on deaf ears which constrained
Salvador to file a complaint for sum of money with damages with
The CA was not moved.
prayer for issuance of preliminary attachment.
Litis pendentia is a Latin term, which literally means "a pending suit"
1. Whether or not the present case is barred by Civil
and is variously referred to in some decisions as lis pendens and auter
Case No. 00-05660 which is pending before the RTC-
action pendant. As a ground for the dismissal of a civil action, it refers
Morong, Rizal.
to the situation where two actions are pending between the same
parties for the same cause of action, so that one of them becomes
2. Whether or not the case is dismissible because the unnecessary and vexatious. It is based on the policy against multiplicity
certification against forum shopping was defective. of suits.19
3. Whether or not the executed promissory note is void Litis pendentia exists when the following requisites are present: identity
for being unconscionable and shocking to the of the parties in the two actions; substantial identity in the causes of
conscience. action and in the reliefs sought by the parties; and the identity between
the two actions should be such that any judgment that may be
rendered in one case, regardless of which party is successful, would
4. Whether or not the CA erred in holding that the order amount to res judicata in the other.20
allowing respondent to present evidence ex-parte and
submitting the case for decision is valid despite the fact
that default judgment is looked upon with disfavor by On the other hand, forum shopping exists when, as a result of an
this Court. adverse decision in one forum, or in anticipation thereof, a party seeks
a favorable opinion in another forum through means other than appeal
or certiorari.21
In fine, the core issue is whether or not the present case should have
been dismissed on the ground of litis pendentia.
There is forum shopping when the elements of litis pendentia are
present or where a final judgment in one case will amount to res
Benavidez argues that the outcome of the case, before RTC-Morong, judicata in another.22
where the annulment of the promissory note was sought, would have
been determinative of the subject case before RTC-Antipolo where the
enforcement of the promissory note was sought. If RTC-Morong would In the present controversy, the Court is of the view that litis
rule that the promissory note was null and void, then the case with pendentia exists. All the elements are present: first, both Benavidez
RTC-Antipolo would have no more leg to stand on. He concludes that and Salvador are parties in both cases; second, both complaints are
the requisites of litis pendentia were indeed present: first, both concerned with the same promissory note; and third, the judgment in
Benavidez and Salvador were parties to both complaints; second, both either case would be determinative of the other.
complaints were concerned with the promissory note; and third, the
judgment in either of the said complaints would have been With the foregoing, which case then should be dismissed? At first
determinative of the other.15 glance, it would seem that Civil Case No. 00-5660 or the complaint
filed with RTC-Antipolo should have been dismissed applying the
Benavidez further claims that the case should have been dismissed "priority-in-time rule." This rule, however, is not ironclad. The rule is not
because the certification on forum shopping which accompanied applied if the first case was filed merely to pre-empt the later action or
Salvador’s complaint was defective. He declared therein that he was to anticipate its filing and lay the basis for its dismissal. A crucial
not aware of any pending case before any court similar to the one he consideration is the good faith of the parties. In recent rulings, the more
was filing, when in truth and in fact, there was one. This fact could not appropriate case is preferred and survives. In Spouses Abines v.
be denied because summons in the case before RTC-Morong was BPI,23 it was written:
served on him and he even filed his answer to the said complaint. 16
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
13
Supreme Court has endeavored to lay down certain criteria to guide more appropriate action is the one where the real issues raised
lower courts faced with this legal dilemma. As a rule, preference is can be fully and completely settled. In Teodoro, the lessee filed an
given to the first action filed to be retained. This is in accordance with action for declaratory relief to fix the period of the lease, but the lessor
the maxim Qui prior est tempore, potior est jure. There are, however, moved for its dismissal because he had subsequently filed an action
limitations to this rule. Hence, the first action may be abated if it was for ejectment against the lessee. We noted that the unlawful detainer
filed merely to pre-empt the later action or to anticipate its filing and lay suit was the more appropriate action to resolve the real issue between
the basis for its dismissal. Thus, the bona fides or good faith of the the parties - whether or not the lessee should be allowed to continue
parties is a crucial element. A later case shall not be abated if not occupying the land under the terms of the lease contract; this was the
brought to harass or vex; and the first case can be abated if it is merely subject matter of the second suit for unlawful detainer, and was also
an anticipatory action or, more appropriately, an anticipatory defense the main or principal purpose of the first suit for declaratory relief.
against an expected suit – a clever move to steal the march from the
aggrieved party.
In the "anticipatory test," the bona fides or good faith of the parties is
the critical element.1âwphi1 If the first suit is filed merely to
Another exception to the priority in time rule is the criterion of the more preempt the later action or to anticipate its filing and lay the basis
appropriate action. Thus, an action, although filed later, shall not be for its dismissal, then the first suit should be
dismissed if it is the more appropriate vehicle for litigating the issues dismissed. In Teodoro, we noted that the first action, declaratory
between the parties. [Underscoring supplied] relief, was filed by the lessee to anticipate the filing of the second
action, unlawful detainer, considering the lessor's letter informing the
lessee that the lease contract had expired.
In the relatively recent case of Dotmatrix Trading v. Legaspi,24 the
Court had the occasion to extensively discuss the various rules and
consideration in determining which case to dismiss in such situations. It We also applied the "more appropriate action test" in Ramos v.
included its analysis of Abines. Thus: Peralta. In this case, the lessee filed an action for consignation of lease
rentals against the new owner of the property, but the new owner
moved to dismiss the consignation case because of the quieting of title
Early on, we applied the principle of Qui prior est tempore, potior est
case he had also filed against the lessee. Finding that the real issue
jure (literally, he who is before in time is better in right) in dismissing a
between the parties involved the right to occupy/possess the subject
case on the ground of litis pendentia. This was exemplified in the
property, we ordered the dismissal of the consignation case, noting
relatively early case of Del Rosario v. Jacinto where two complaints for
that the quieting of title case is the more appropriate vehicle for the
reconveyance and/or recovery of the same parcel of land were filed by
ventilation of the issues between them; the consignation case raised
substantially the same parties, with the second case only impleading
the issue of the right to possession of the lessee under the lease
more party-plaintiffs. The Court held that "parties who base their
contract, an issue that was effectively covered by the quieting of title
contention upon the same rights as the litigants in a previous suit are
case which raised the issue of the validity and effectivity of the same
bound by the judgment in the latter case." Without expressly saying so
lease contract.
in litis pendentia terms, the Court gave priority to the suit filed earlier.
14
controversy. We noted that in the second case, the reformation case, balance of ₱450,000.00 of the money loaned was never handed to her
the petitioners acknowledged their indebtedness to the respondent; by Atty. Segarra is a matter between the two of them. As far as she
they merely contested the amounts of the principal, interest and the and Salvador are concerned, there is admittedly an obligation. Whether
remaining balance. We observed, too, that the petitioners' claims in the the promissory note was void or not could have been proven by her
reformation case were in the nature of defenses to the collection case during the trial but she forfeited her right to do so when she and her
and should be asserted in this latter case. lawyer failed to submit a pre-trial brief and to appear at the pre-trial as
will be discussed hereafter.
Under this established jurisprudence on litis pendentia, the following
considerations predominate in the ascending order of importance in At this point, to dismiss Civil Case No. 00-5660 would only result in
determining which action should prevail: (1) the date of filing, with needless delay in the resolution of the parties' dispute and bring them
preference generally given to the first action filed to be back to square one. This consequence will defeat the public policy
retained; (2) whether the action sought to be dismissed was filed reasons behind litis pendentia which, like the rule on forum shopping,
merely to preempt the later action or to anticipate its filing and lay the aim to prevent the unnecessary burdening of our courts and undue
basis for its dismissal; and (3) whether the action is the appropriate taxing of the manpower and financial resources of the Judiciary; to
vehicle for litigating the issues between the parties.25 [Underscoring avoid the situation where co-equal courts issue conflicting decisions
supplied] over the same cause; and to preclude one party from harassing the
other party through the filing of an unnecessary or vexatious suit.27
In the complaint filed before RTC-Morong, Benavidez alleged, among
others, that it was defendant Atty. Nepthalie Segarra (Atty. The failure of a party to file a
Segarra) who arranged the loan in the amount of ₱1,500,000.00 for her pre-trial brief or to appear at a
at his own initiative; that he was the one who received the amount for pre-trial conference shall be
her on or about March 10, 1998 from defendant Salvador; that he paid cause to allow the other party
Farmers Bank the amount of ₱1,049,266.12 leaving a balance of more to present evidence ex parte.
than ₱450,000.00 in his possession; and that he made her sign a
promissory note. Benavidez prayed, among others, that Atty. Segarra
Benavidez basically contends that she should not be made to suffer
be ordered to give her the balance of the amount loaned and that the
the irresponsibility of her former counsel, Atty. Jakosalem, and that the
promissory note that Salvador allegedly executed be declared null and
trial court should have relaxed the application of the Rules of Court,
void because she was just duped into signing the said document
reopened the case and allowed her to present evidence in her favor.
through machinations and that the stipulated interest therein was
shocking to the conscience. Salvador, on the other hand, filed the
subject case for the collection of a sum of money before RTC-Antipolo The Court is not moved.
to enforce his rights under the promissory note.
Section 4, Rule 18 of the Rules of Court provides that it is the duty of
Considering the nature of the transaction between the parties, the the parties and their counsel to appear at the pre-trial conference. The
Court believes that the case for collection of sum of money filed before effect of their failure to appear is provided by Section 5 of the same
RTC-Antipolo should be upheld as the more appropriate case because rule where it states:
the judgment therein would eventually settle the issue in the
controversy - whether or not Benavidez should be made accountable
Sec. 5. Effect of failure to appear.- The failure of the plaintiff to
for the subject loan. In the complaint that she filed with RTC- Morong,
appear when so required pursuant to the next preceding section shall
Benavidez never denied that she contracted a loan with Salvador.
Under her second cause of action, she alleged: be cause for dismissal of the action. The dismissal shall be with
prejudice, unless otherwise ordered by the court. A similar failure on
the part of the defendant shall be cause to allow the plaintiff to
SECOND CAUSE OF ACTION present his evidence ex parte and the court to render judgment on
the basis thereof. [Emphasis supplied]
11. Defendant Atty. Nepthalie Segarra arranged a loan in the
amount of ONE MILLION AND FIVE HUNDRED Furthermore, Section 6 thereof provides:
THOUSAND (₱1,500,000.00) PESOS for plaintiff at his own
initiative;
Sec. 6. Pre-trial brief.-The parties shall file with the court and serve on
the adverse party, in such manner as shall ensure their receipt thereof
12. Defendant Atty. Nepthalie Segarra received the at least three (3) days before the date of the pre-trial, their respective
₱1,500,000.00 on or about March 10, 1998 from defendant pre-trial briefs which shall contain, among others:
Nestor Salvador in behalf of and for delivery to plaintiff;
xxx
13. Defendant Atty. Nepthalie Segarra paid Farmers Bank
the amount of ₱1,049,266.12 leaving a balance of more than
₱450,000.00 in his possession. A copy of the receipt Failure to file the pre-trial brief shall have the same effect as failure to
evidencing payment is herewith attached as Annex "A" and appear at the pre-trial.
made an integral part hereof;
From the foregoing, it is clear that the failure of a party to appear at the
14. Defendant Atty. Nepthalie Segarra made plaintiff sign a pre-trial has adverse consequences. If the absent party is the plaintiff,
then his case shall be dismissed. If it is the defendant who fails to
Promissory Note evidencing the loan of ₱1,500,000.00. A
copy of said Promissory Note is herewith attached as Annex appear, then the plaintiff is allowed to present his evidence ex
"B" and made an integral part hereof; 26 [Underscoring parte and the court shall render judgment on the basis thereof. Thus,
the plaintiff is given the privilege to present his evidence without
supplied]
objection from the defendant, the likelihood being that the court will
decide in favor of the plaintiff, the defendant having forfeited the
From the foregoing, it is clear that there was an amount of money opportunity to rebut or present its own evidence.28
borrowed from Salvador which was used in the repurchase of her
foreclosed property. Whether or not it was Atty. Segarra who arranged
the loan is immaterial. The fact stands that she borrowed from RTC-Antipolo then had the legal basis to allow Salvador to present
evidence ex parte upon motion. Benavidez and her counsel were not
Salvador and she benefited from it. Her insistence that the remaining
present at the scheduled pre-trial conference despite due notice. They
15
did not file the required pre-trial brief despite receipt of the Order. The
rule explicitly provides that both parties and their counsel are
mandated to appear thereat except for: (1) a valid excuse; and (2)
appearance of a representative on behalf of a party who is fully
authorized in writing to enter into an amicable settlement, to submit to
alternative modes of dispute resolution, and to enter into stipulations or
admissions of facts and documents.29 In this case, Benavidez’s lawyer
was already negligent, but she compounded this by being negligent
herself. She was aware of the scheduled pre-trial conference, but she
did not make any move to prevent the prejudicial consequences of her
absence or that of her counsel. If she knew that her lawyer would not
appear and could not because she was ill, she should have sent a
representative in court to inform the judge of her predicament.
Also, her failure to file the pre-trial brief warranted the same effect
because the rules dictate that failure to file a pre-trial brief shall have
the same effect as failure to appear at the pre-trial. Settled is the rule
that the negligence of a counsel binds his clients. 30 Neither Benavidez
nor her counsel can now evade the effects of their misfeasance.
This Court is not unmindful of the fact that parties to a loan contract
have wide latitude to stipulate on any interest rate in view of the
Central Bank Circular No. 905 s. 1982 which suspended the Usury Law
ceiling on interest effective January I, 1983. It is, however, worth
stressing that interest rates whenever unconscionable may still be
declared illegal. There is nothing in said circular which grants
lenders carte blanche authority to raise interest rates to levels which
will either enslave their borrowers or lead to a hemorrhaging of their
assets.31 In Menchavez v. Bermudez,32 the interest rate of 5% per
month, which when summed up would reach 60% per annum, is null
and void for being excessive, iniquitous, unconscionable and
exorbitant, contrary to morals, and the law.33
16
G.R. No. 104019 January 25, 1993 The fifty per cent (50%) downpayment agreed upon was duly paid.
Thereupon, petitioner delivered on 22 May 1991 three (3)of the six (6)
sets to Victoria Court/North EDSA, Victoria Court/Adriatico and Victoria
VICTRONICS COMPUTERS, INC., petitioner,
Court/Cuneta.2 The remaining sets were delivered on 20 June 1991 to
vs.
Victoria Court/Hillcrest, Victoria Court/Panorama and Victoria
REGIONAL TRIAL COURT, BRANCH 63, MAKATI, presided by
Court/McArthur.3
JUDGE JULIO R. LOGARTA, PANORAMA ENTERPRISES, INC.,
PASIG TOURIST DEVELOPMENT CORP., GALACTIC SPACE
DEVELOPMENT CORP., MALATE TOURIST DEVELOPMENT As revealed in the complaint in Civil Case No. 91-2192, each of the
CORP., CALOOCAN TOURIST DEVELOPMENT CORP., aforementioned establishments is owned by the herein six (6)
BARRIENTOS & CO., INC., KARL C. VELHAGEN and respondent corporations which, however, decided sometime in 1986
ARCHIMEDES R. KING, who operate business under the names "to band together for their mutual interest and benefit, under the trade
VICTORIA COURT, GMT CONSOLIDATED COMPANY and name and style of the Victoria Court Group of Companies."4
VICTORIA GROUP OF COMPANIES, respondents.
As further revealed in the Comment of these corporations, they operate
Paras & Reynes Law Office for petitioner. under a common management team wherein respondents Velhagen
and King are the General Manager and Chief Executive Officer,
respectively.5
Ernest S. Ang for respondents.
Only fifty per cent (50%) of the purchase price of each of the sets
delivered to the different establishments was paid by the said
corporations.6 The outstanding balance not having been paid within
DAVIDE, JR., J.: and even after the period stipulated in the Purchase Order despite
demands for its payment made on Velhagen and King, the petitioner
filed, on 26 July 1991, with the RTC of Makati a Complaint 7 for a sum
This is a petition for review on certiorari under Rule 45 of the Rules of of money and damages against:
Court. Petitioner seeks to set aside, for being inconsistent with law and
jurisprudence, the 22 January 1992 Order of respondent Branch 63 of
the Regional Trial Court (RTC) of Makati, Metro Manila which, among KARL C. VELHAGEN and ARCHIE R. KING, who
others, denied a motion for reconsideration of its earlier dismissal, on operate business under the names VICTORIA
the ground of lis pendens, of a collection suit docketed as Civil Case COURT, GMT CONSOLIDATED COMPANY, and
No. 91-2069 filed against private respondents Karl C. Velhagen and VICTORIA GROUP OF COMPANIES.
Archimedes R. King, alleged operators of a business under the names
VICTORIA COURT, GMT CONSOLIDATED COMPANY and
The case was docketed as Civil Case No. 91-2069 and was
VICTORIA GROUP OF COMPANIES. Petitioner further asks this
raffled off to Branch 63 of the said court, presided over by
Court, in the exercise of its supervisory power over lower courts, to
herein respondent Judge Julio R. Logarta.
direct the respondent Court to issue alias summonses to the
respondent corporations which were impleaded as additional
defendants in the amended complaint filed in said Civil Case No. 91- Defendants Velhagen and King, herein private respondents,
2069, and to order the consolidation of this case in Branch 63 with Civil were each served with a summons and a copy of the
Case No. 91-2192 pending before Branch 150 of the said court. complaint on 8 August 1991.8
The records disclose the following antecedents: The following day, 9 August 1991, the six (6) respondent
corporations9 filed with the RTC of Makati a Complaint, dated 7 August
1991, 10 for the nullification of the abovementioned Purchase Order
Petitioner Victronics Computers, Inc., a domestic corporation engaged
and for damages against the herein petitioner and one Teodorico B.
in the sale of computer systems and peripherals, submitted a quotation
Kabigting. It is prayed for in the complaint that:
for office systems to service the networking requirements of various
Victoria Court branches.
. . . judgment be rendered for the plaintiffs and
against the defendants declaring the contract to
Satisfied with the said quotations, private respondents Velhagen and
purchase the aforementioned computer equipment
King placed an order with the petitioner in a Purchase Order1 form on
null and void for fraud and undue influence, and
which is written "GMT CONSOLIDATED" above the printed word
ordering defendants, jointly or severally, to pay
COMPANY, and the address 2129 Pasong Tamo St., Makati, Metro
plaintiffs:
Manila below it. The private respondents ordered six (6) sets of 80
DATA 386 computer system with peripherals for the net consideration,
after deducting a P7,000.00 discount, of P767,000.00, subject to the 1. The sum of P383,500.00 plus reasonable
following terms: interest of at least 2% per month from the month of
May 1991 until the amount is actually paid, as
compensary (sic) or actual damages;
a) Payment — 50% down, 50% COD upon
completion of delivery.
2. The sum of P500,000.00 as exemplary
damages;
b) Delivery — within 30 calendar days upon
receipt of P.O. and 50% down payment.
3. The sum of P100,000.00 and a per appearance
fee of P1,000.00 as and by way of attorney's fees;
c) Penalty — 1% of total P.O. amount per day of
delay.
4. The cost of the suit.
These systems were to be delivered to the parties therein indicated,
namely: VCAD, VCCU, VCHI, VCNE, VCMA and VCES. Per the The case was docketed as Civil Case No. 91-2192 and was
delivery receipts, these acronyms stand for Victoria Court drive-in raffled off to Branch 150 of the said court.
motels located in different places.
17
Four (4) causes of action are alleged in this complaint. In the nullification or the voiding of the same contract for
first, the corporations claim that defendant Kabigting, then alleged fraud and undue influence. There is no
the Manager of the Management Information Services of the debate that the more basic question is before the
Victoria Court Group of Companies who was instructed to other court, as the very validity of the contract
canvass or conduct a price survey of computer equipment sought to be enforced is at issue there.
supplied by different companies, connived with Victor
Mariano, the petitioner's General Manager and the latter's
It is clear therefore that the second case is
old and close friend, in consideration of an alleged promise
prejudicial to the determination of the first case.
of a substantial commission, to falsify the price survey report
Whether or not the suit pending before this
and recommend the purchase of the computer equipment
Honorable Court will prosper depends entirely on
from the petitioner corporation. A routine check of the
how the case in the other court will fare. If for
transaction likewise disclosed an overpricing of the
example the other court should determine that
equipment by at least P200,000.00 while an audit revealed
there is (sic) sufficient grounds to nullify the
that the equipment sold was among the surplus stock of the
contract, then the collection suit before this
petitioner. In the second cause of action, they allege that
Honorable Court must necessarily fail. It is only
they forthwith informed the petitioner's Mr. Mariano about the
after the other court should determined (sic) that
fraud and sought an audience with him for an amicable
the questioned contract is valid can this Honorable
solution to the controversy, but that the petitioner failed to
Court proceed with the collection case.
respond and instead referred the matter to its attorney who
in turn wrote a letter of demand for the payment of the
balance of the purchase price. Reacting, they also referred Suspension of the proceedings before this
the matter to their lawyer who wrote the petitioner a letter Honorable Court is therefore the prudent thing to
informing it that the contract was being voided due to fraud do. This will avoid the absurd situation wherein
and undue influence and demanding that the fifty per cent one court will find for one party in one case, and
(50%) downpayment be returned with a reasonable interest the other court will find for the adverse party in the
at the rate of two per cent (2%) per month in exchange for second case. It is also an act of courtesy to a co-
the return of "all computer equipment purchased from equal branch of the same court. 13
defendant (herein petitioner) in the same condition as they
were received." 11 Upon the petitioner's failure to respond
positively to this offer, they filed the complaint. In the third They then end with an alternative prayer, thus:
cause of action, they allege bad faith and a fraudulent intent
on the part of the defendants and ask for P500,000.00 as WHEREFORE, premises considered, it is
exemplary damages. The fourth cause of action is for respectfully prayed that the instant Complaint be
attorney's and appearance fees. dismissed for all or any of the grounds aforecited.
On the alternative, it is prayed that the
No copy of any document whatsoever is attached to the proceedings before the Honorable Court be at
least suspended until the final resolution of the
complaint in said Civil Case No. 91-2192.
other case before Branch 150 of the Regional Trial
Court of Makati. 14
On 22 August 1991, private respondents Velhagen and King,
represented by counsel of record for the six (6) corporations
in Civil Case No. 91-2192 — the law firm of ANG, CADIZ Meanwhile, on 5 September 1991, the herein petitioner filed in Civil
and ASSOCIATES — filed in Civil Case No. Case No. 91-2192 a Special Appearance and Motion To
Dismiss 15 asking the trial court to dismiss the said case on grounds of
91-2069 a Motion To Dismiss and/or To Suspend
Proceedings based on the following grounds: (a) plaintiff improper service of summons and lack of jurisdiction over it as
(petitioner herein) failed to verify the complaint. (b) plaintiff defendant therein.
failed to sue the proper parties and (c) there is a prejudicial
question or a pending incident before another court. In On 16 September 1991, Branch 63 of the Makati RTC, through
support of these grounds, they allege that (a) verification is a respondent Judge Julio Logarta, issued an order dismissing Civil Case
formal requirement under Section 6, Rule 7 of the Rules of No.
Court; (b) the transaction in question was not entered into by 91-2069 because of litis pendentia. 16 The court gave the following
them in their personal capacities — they acted for and on reasons, quoted verbatim, in support of its ruling:
behalf of the corporations they represent; hence, the latter,
who chose not to honor the contract, are the real parties in
interest; moreover, "Victoria Court, GMT Consolidated . . . Clearly, the elements of litis pendentia, as a
Company and Victoria Group of Companies . . . are mere ground for a motion to dismiss is present, to wit:
tradenames" 12 — none of these named companies really
exist; and (c) Civil Case No. 91-2192 (erroneously written as 1. Identity of parties or at least
91-2191) for the nullification of the subject purchase order such as representing the
has been filed against the petitioner and is pending before same interests in both actions;
Branch 150 of the trial court; accordingly, "[A]t the very least,
the Honorable Court (Branch 63) should suspend all
proceedings in this case because of the existence of a 2. Identity of rights asserted
prejudicial question or a pending incident before another and prayed for, the reliefs
court." Elaborating thereon, said movants state: being founded on the same
facts;
22
G.R. No. L-43706 November 14, 1986 (a) Should the Contractor fail to complete the
construction of the work as herein specified and
agreed upon, or if the work is abandoned, ... the
NATIONAL POWER CORPORATION, petitioner,
Corporation shall have the power to take over the
vs.
work by giving notice in writing to that effect to the
COURT OF APPEALS and PHILIPPINE AMERICAN GENERAL
Contractor and his sureties of its intention to take
INSURANCE CO., INC., respondents.
over the construction work.
The National Power Corporation (NPC) entered into a contract with the The work was completed by NPC on September 30, 1963. On January
Far Eastern Electric, Inc. (FFEI) on December 26, 1962 for the erection 30, 1967 NPC notified Philamgen that FEEI had an outstanding
of the Angat Balintawak 115-KW-3-Phase transmission lines for the obligation in the amount of P75,019.85, exclusive of interest and
Angat Hydroelectric Project. FEEI agreed to complete the work within damages, and demanded the remittance of the amount of the surety
120 days from the signing of the contract, otherwise it would pay NPC bond the answer for the cost of completion of the work. In reply,
P200.00 per calendar day as liquidated damages, while NPC agreed to Philamgen requested for a detailed statement of account, but after
pay the sum of P97,829.00 as consideration. On the other hand, receipt of the same, Philamgen did not pay as demanded but
Philippine American General Insurance Co., Inc. (Philamgen) issued a contended instead that its liability under the bond has expired on
surety bond in the amount of P30,672.00 for the faithful performance of September 20, 1964 and claimed that no notice of any obligation of the
the undertaking by FEEI, as required. surety was made within 30 days after its expiration. (Record on Appeal,
pp. 191-194; Rollo, pp. 62-64).
The condition of the bond reads:
NPC filed Civil Case No. 70811 for collection of the amount of
The liability of the PHILIPPINE AMERICAN P75,019.89 spent to complete the work abandoned; P144,000.00 as
GENERAL INSURANCE COMPANY, INC. under liquidated damages and P20,000.00 as attorney's fees. Only
this bond will expire One (1) year from final Philamgen answered while FEEI was declared in default.
Completion and Acceptance and said bond will be
cancelled 30 days after its expiration, unless The trial court rendered judgment in favor of NPC, the dispositive
surety is notified of any existing obligation portion of which reads:
thereunder. (Exhibit 1-a)
23
Respondent Philamgen filed its comment on the petition on August 6, On the other hand, private respondent insists that petitioner's notice
1978 (Rollo, p. 62) in compliance with the resolution dated June 16, dated July 19, 1983 is not sufficient despite previous events that it had
1976 of the First Division of this Court (Rollo, p. 52) while petitioner knowledge of FEEI's failure to comply with the contract and claims that
NPC filed its Reply to the comment of respondent (Rollo, p. 76) as it cannot be held liable under the bond without notice within thirty days
required in the resolution of this Court of August 16, 1976, (Rollo, p. from the expiration of the bond, that there is a subsisting obligation.
70). In the resolution of September 20, 1976, the petition for certiorari Private respondent's contention is sustained by the Court of Appeals.
was given due course (Rollo, p. 85). Petitioner's brief was filed on
November 27, 1976 (Rollo, p. 97) while Philamgen failed to file brief
The petition is impressed with merit.
within the required period and this case was submitted for decision
without respondent's brief in the resolution of this Court of February 25.
1977) Rollo, p. 103). As correctly assessed by the trial court, the evidence on record shows
that as early as May 30, 1963, Philamgen was duly informed of the
failure of its principal to comply with its undertaking. In fact, said notice
In its brief, petitioner raised the following assignment of errors:
of failure was also signed by its Assistant Vice President. On July 19,
1963, when FEEI informed NPC that it was abandoning the
I construction job, the latter forthwith informed Philamgen of the fact on
the same date. Moreover, on August 1, 1963, the fact that Philamgen
was seasonably notified, was even bolstered by its request from NPC
RESPONDENT COURT OF APPEALS ERRED IN
for information of the percentage completed by the bond principal prior
HOLDING THAT PETITIONER SHOULD HAVE
to the relinquishment of the job to the latter and the reason for said
GIVEN NOTICE TO PRIVATE RESPONDENT
relinquishment. (Record on Appeal, pp. 193-195). The 30-day notice
PHILAMGEN OF ANY EXISTING OBLIGATION
adverted to in the surety bond applies to the completion of the work by
WITHIN 30 DAYS FROM EXPIRATION OF THE
the contractor. This completion by the contractor never materialized.
BOND TO HOLD SAID SURETY LIABLE
THEREUNDER, DESPITE PETITIONER'S
TAKING OVER OF THE WORK ABANDONED BY The surety bond must be read in its entirety and together with the
THE CONTRACTOR BEFORE ITS contract between NPC and the contractors. The provisions must be
COMPLETION. construed together to arrive at their true meaning. Certain stipulations
cannot be segregated and then made to control.
II
Furthermore, it is well settled that contracts of insurance are to be
construed liberally in favor of the insured and strictly against the
ASSUMING ARGUENDO THAT PETITIONER
insurer. Thus ambiguity in the words of an insurance contract should
SHOULD STILL NOTIFY PRIVATE
be interpreted in favor of its beneficiary. (Serrano v. Court of Appeals,
RESPONDENT PHILAMGEN OF ANY EXISTING
130 SCRA 327, July 16, 1984).
OBLIGATION UNDER THE BOND DESPITE THE
TAKE-OVER OF WORK BY PETITIONER,
RESPONDENT COURT OF APPEALS In the case at bar, it cannot be denied that the breach of contract in this
NONETHELESS ERRED IN HOLDING THAT case, that is, the abandonment of the unfinished work of the
PETITIONER'S LETTER DATED JULY 19, 1963 transmission line of the petitioner by the contractor Far Eastern
(EXH. E) TO PRIVATE RESPONDENT WAS NOT Electric, Inc. was within the effective date of the contract and the surety
SUFFICIENT COMPLIANCE WITH THE bond. Such abandonment gave rise to the continuing liability of the
CONDITION OF THE BOND. bond as provided for in the contract which is deemed incorporated in
the surety bond executed for its completion. To rule therefore that
private respondent was not properly notified would be gross error.
III
The bone of contention in this case is the compliance with the notice
requirement as a condition in order to hold the surety liable under the
bond.
24
G.R. No. L-45107 November 11, 1991 P. R. Roman, Inc. filed a motion to dismiss on the grounds that venue
was improperly laid, the complaint states no cause of action and the
court has no jurisdiction over the subject of the action or suit. In its
BENEDICTO RAMOS, petitioner,
motion to dismiss, P. R. Roman, Inc. cited the pendency before the
vs.
then CFI of Bataan of Civil Case No 4102 instituted by P.R. Roman,
HON. ELVIRO L. PERALTA, Presiding Judge, Branch XVII, Court
Inc. against petitioner Benedicto Ramos on August 13, 1976 to quiet its
of First Instance of Manila, SPOUSES JUVENCIO ORTANEZ and
title over the Salgado fishpond.
JULIANA S. ORTANEZ, MINDANAO INSURANCE CO., INC. and P.
R. ROMAN, INC.,respondents.
On August 27, 1976, respondent CFI of Manila issued an
order 4 dismissing Civil Case No. 103647, stating in part:
Angel Suntay, Jr. and Renato M. Coronado for petitioner.
1. The respondent court erred in not holding that the only issue in consignation of funds is
Thereafter on February 23, 1976, respondent P. R. Roman, Inc. whether the defendant is willing to accept the proffered payment or not.
purchased from Mindanao Insurance the Salgado fishpond for
P950,000.00. The deed of sale was signed by the receiver and duly
approved by the liquidation court. 2. The respondent court erred in not holding that the prerogative of choosing the proper venue
belongs to the plaintiff.
March 15, 1976 in the amount of P30,000.00. the court of first instance of bataan is a bar to the prosecution of civil case no. 103647 before it.
On or about May 1, 1976, petitioner received a letter from Don Pablo Petitioner contends that the bataan quieting-of-title civil case no. 4102 cannot serve as a bar to his manila
R. Roman informing him of the latter's acquisition of the fishpond and consignation civil case no. 103647 because they involve different issues. Civil case no. 4102 deals with the
intention to take possession thereof on May 16, 1976. In his letter- question of ownership while the only issue involved in his consignation case is whether or not the defendant is
reply, petitioner reminded Mr. Roman of his lease contract over the willing to accept the proffered payment. In fact, petitioner posits, the action to quiet title is a useless futile exercise
fishpond and refused to consent to the intended take over. as he does not question p. R. Roman inc.'s ownership of the fishpond under consideration, but merely wishes to
Notwithstanding petitioner's objection, P. R. Roman, Inc. took over assert his leasehold and possessory rights over said property under the "kasunduan sa pag-upa." he further
possession of the fishpond. contends that compelling him to litigate before the bataan court would render nugatory his right as a plaintiff to
choose the venue of his action. Besides, civil case no. 103647 was filed on august 2, 1976, ahead of civil case no.
4102 which was filed on a much later date, august 13, 1976, after the manila cfi had already acquired jurisdiction
On August 2, 1976, petitioner filed before the CFI of Manila the over civil case no. 103647.
aforesaid complaint, docketed as Civil Case No. 103647, 3 against
private respondents Juvencio and Juliana Ortanez, Mindanao
Insurance and P. R. Roman, Inc. for consignation of the sum of Private respondents counter that the view taken by petitioner of the manila consignation case is quite limited and
P70,000.00 representing advance rentals on the fishpond in the bookish, because while it may be true that theoretically, the main issue involved in a consignation case is whether
amounts of P30,000.00 and P40,000.00 respectively due on March 15, or not the defendant is willing to accept the proffered payment, in the consignation case brought by petitioner,
1976 and June 15, 1976, which he had previously tendered to, but other issues were pleaded by petitioner himself, such as the validity and binding effect of the lease contract and
refused by the spouses Ortanez and Pablo Roman. the existence of the supposed obligor-obligee relationship. They further contend that a plaintiffs right of choice of
venue is not absolute, but must invariably how to the dismissal of the case because of litis pendentia which, in
25
refutation of petitioner's argument, does not require that there is a prior pending action, merely that there is a fishpond in favor of P. R. Roman, Inc., the Ortanezes should be condemned to reimburse him the
pending action. rentals he has already paid for the unexpired portion of the lease. The issue of whether or not the
lease subsists even as regards P. R. Roman, Inc., for it is the view of Ramos that it bought the
property with knowledge of the lease, is squarely planted in the case before the Court of First
We find for respondents.
Instance of Bataan, and, consequently, the more appropriate court with which rents are to be
consignated. . . .
That whatever decision may be handed down in Civil Case No. 4102 would constitute res judicata in Civil Case
Under the rules and jurisprudence, for litis pendentia to be invoked as a ground for the dismissal of an action, the No. 103647 is beyond cavil. Should the Bataan court rule that the lease contract is valid and effective against P.
concurrence of the following requisites is necessary: (a) Identity of parties or at least such as represent the same R. Roman, Inc., the petitioner can compel it to accept his proffered payment of rentals; otherwise, he may not do
interest in both actions; (b) Identity of rights asserted and relief prayed for, the relief being founded on the same so.
facts; and (c) The identity in the two cases should be such that the judgment that may be rendered in one would,
regardless of which party is successful, amount to res judicata in the other. 7
These requisites are present in the case at bar. It is worthwhile mentioning that in his basic petition for review, one
Petitioner next contends that the dismissal of Civil Case No. 103647 deprived him of his right to choose the venue
of the assigned errors of petitioner is that the respondent court erred in not holding that the parties in Civil Case
of his action. Verily, the rules on the venue of personal actions are laid down generally for the convenience of the
No. 4102 are not the same as the parties in Civil Case No. 103647. 8
However, in his brief, no plaintiff and his witnesses. But, as observed by private respondents, this right given to the plaintiff is not
further mention of this assigned error was made; a clear indication of immutable. It must yield to the greater interest of the orderly administration of justice, which as in this case, may
petitioner's admission of the identity of parties in Civil Case No. 4102 call for the dismissal of an action on the basis of litis pendentia to obviate the possibility of conflicting decisions
and Civil Case No. 103647, particularly as he filed a third party being rendered by two different courts. 12
complaint in Civil Case No. 4102 against the spouses Ortanez and
Mindanao Insurance.
As private respondents would put it, "(T)he Rules of Court are not perfect. It does not pretend to be able to make
everyone happy simultaneously or consecutively or all the time. Even the Rules of Court has hierarchy of values;
Anent the second element, we agree with private respondents' thus, the choice of venue may bow to dismissal of the case because of litis pendentia. 13
At any rate,
observation that petitioner's approach to his consignation case is quite
petitioner cannot complain of any inconvenience arising from the
constricted. His contention that the only issue in a consignation case is
dismissal of Civil Case No. 103647. Being the defendant in Civil Case
whether or not the defendant is willing to accept the proffered payment
No. 4102, he cannot but litigate before the Bataan court, and bringing
is true only where there is no controversy with respect to the obligation
his consignation case before the same court would actually save him
sought to be discharged by such payment. His consignation case,
time, effort and litigation expenses.
however, is not as simple. While ostensibly, the immediate relief
sought for in his consignation case is to compel therein defendants to
accept his advance rentals, the ultimate purpose of such action is to Finally, the rule on litis pendentia does not require that the later case
compel the new owner of the fishpond to recognize his leasehold rights should yield to the earlier case. What is required merely is that there be
and right of occupation. In the last analysis, therefore, the issue another pending action, not a prior pending action. Considering the
involved in Civil Case No. 103647 is the right of possession over the broader scope of inquiry involved in Civil Case No. 4102 and the
fishpond intertwined with the validity and effectivity of the lease location of the property involved, no error was committed by the lower
contract. court in deferring to the Bataan court's jurisdiction.
This is the same issue involved in Civil Case No. 4102. Although an WHEREFORE, the assailed decision dated August 27, 1976 of the
action for quieting of title refers to ownership, P. R. Roman, Inc. in its then Court of First Instance of Manila, Branch XVII, is AFFIRMED in
complaint 9 in Civil Case No. 4102 alleged: toto. This decision is immediately executory, with costs against
petitioner.
5. There is a cloud on the aforesaid titles of plaintiff on the
said agricultural land, marked Annexes "A", "B" and "C"
hereof, as well as on its right of possession over that real
property by reason of a certain "Kasunduan sa
Pagupa" (Contract of Lease) dated June 28, 1974 executed
by and between the spouses Jovencio Ortanez and Juliana
S. Ortanez purportedly as "may-ari/Nagpapaupa"
(owner/lessor) and the defendant as lessee, which
instrument is apparently valid or effective but in truth and in
fact invalid, ineffective, voidable or unenforceable, and is
prejudicial to the said titles of plaintiff as well as to its right of
possession over the same fishpond/agricultural land in Barrio
Balut, Pilar, Bataan.
In Civil Case No. 4102 of the Court of First Instance of Bataan, entitled P. R. Roman, Inc. vs.
Benedicto Ramos one of the principal issues is the possession of the fishpond subject matter of
the lease supposed rents of which are supposed to be consignated in the instant case, plaintiff P.
R. Roman, Inc. there, claiming to be entitled to the possession of said property as owner under a
certificate of title and defendant Benedicto Ramos, plaintiff here, anchoring his claim of
possession upon his lease with the Ortanez spouses against whom, on his motion, he filed a third
party complaint in which he prayed in the alternative, that should he lose possession of the
26
G.R. No. L-58671 November 22, 1985 into account the whole estate of the donor of by will, taking into
account the whole estate of the donor at the time of the birth,
appearance or adoption of a child.
EDUVIGIS J. CRUZ, petitioner,
vs.
COURT OF APPEALS, ET AL., respondents. (b) Eduvigis Cruz owns another lot in Dolores Taytay Rizal, although
the subject of a pending litigation valued at P273,420.00 in 1977.
(c) The donated lot did not belong entirely to Eduvigis as ½ thereof
belonged to her brother Maximo Cruz, grandfather of defendants. 1974
PLANA, J.:
it had a total market value of P17,000. One-half thereof was P8,500.
Adding thereto a P50,000 value of the apartment house constructed
This a petition for review of the decision of the defunct Court of thereon, the total value of the donation would still be within the free
Appeals dated August 20, 1981 in CA-G.R. No. 65338-H reversing that portion of donor's estate and therefore would not impair the legitime of
of the Court of First Instance of Rizal. and dismissing petitioner's the adopted child.
complaint for revocation of donation against herein private respondents
Teresita, Lydia and all surnamed De Leon.
(d) In an action for revocation of donation, the donor has the burden to
show that the donation has impaired the legitime of the subsequent
In Eduvigis J. Cruz, a childless widow, donated a 235.5 sq.m child; but in this case, Eduvigis did not even allege it in her complaint.
residential lot in San Isidro, Taytay Rizal together with the two-door
apartment erected thereon to her grandnieces private respondents
In the instant petition for review, petitioner imputes to the appellate
herein, in a deed of donation entitled "Kasulatan Sa Kaloobpala". The
court alleged errors which boil down to the question as to whether
property was accordingly transferred to the names of private
under the facts as established and the law, the decision under review
respondents.
correctly dismissed the complaint to annul the subject donation. We
hold that it did.
In 1974, Eduvigis Cruz judicially adopted Cresencia Ocreto, a minor,
after which she extrajudicially tried to revoke the donation, but the
In the case of the subsequent adoption of a minor by one who had
donees resisted, alleging that—
previously donated some or all of his properties to another, the donor
may sue for the annulment or reduction of the donation within four
(a) the property in question was co-owned by years from the date of adoption, if the donation impairs the legitime of
Eduvigis Cruz and her brother. the late Maximo the adopted, taking into account the whole estate of the donor at the
Cruz, grandfather of the donees, hence the latter time of the adoption of the child. (Civil Code, Articles 760, 761 and
own 1/2 of the property by inheritance; and 763). Of course, the burden of proof is on the plaintiff-donor, who must
allege and establish the requirements prescribed by law, on the basis
of which annulment or reduction of the donation can be adjudged.
(b) Eduvigis Cruz owns another property, an
agricultural land of more than two hectares
situated in Barrio Dolores, Taytay, Rizal, hence the Unfortunately, in the case at bar, the complaint for annulment does not
donation did not impair the presumptive legitime of allege that the subject donation impairs the legitime of the adopted
the adopted child. child. Indeed it contains no indication at all of the total assets of the
donor.
In 1975, petitioner filed a complaint against the donees for revocation
of donation in the Court of First Instance of Rizal (Civil Case No. Nor is there proof of impairment of legitime. On the contrary, there is
21049) invoking Article 760, paragraph 3 of the New Civil Code, which unrebutted evidence that the donor has another piece of land (27,342
reads: sq. m.) situated in Dolores, Taytay, Rizal worth P273,420.00 in 1977,
although then subject to litigation.
Art. 760, Ever donation inter vivos made by a person having no
children or descendants, legitimate or legitimated by subsequent The legal situation of petitioner-donor, as plaintiff, is made worse by
marriage, or illegitimate, may be revoked or reduced as provided in the the factual finding of the Court of Appeals that the grandfather of the
next article, by the happening of any of these events: donees was the owner pro indiviso of one-half of the donated land, the
effect of which is to reduce the value of the donation which can then
more easily be taken from the portion of the estate within the free
xxx xxx xxx disposal of petitioner.
(3) If the donor should subsequently adopt a minor child. WHEREFORE, the decision under review is affirmed.
After trial, the trial court rendered a decision revoking the donation. It
did not find merit in defendants' claim that the lot, by donor and her
deceased brother, Maximo Cruz, because the donor's ownership was
deemed admitted by the donees by accepting the deed of donation. It
also rejected defendants' argument that the donation did not impair the
legitime, saying that claim was "beside the point" and did not limit
plaintiff's right under Art. 760 of the Civil Code.
On appeal, the Court of Appeals reversed the trial court and dismissed
the complaint. It found that.—
a) the trial court took into consideration only Article 760 of the Civil
Code and ignored Article 761 which states: " In the cases referred to in
the preceding article, the donation shall be revoked or reduced insofar
as it exceeds the portion that may be freely disposed of by will, taking
27
[G.R. No. 103476. November 18, 1999] 6. Ordering the Register of Deeds for the City and Province
of Davao to cancel Transfer Certificate of Title No. T-140 in
the name of Fermin Caram, Jr.;
On 10 June 1945, Marcos Mata (Mata) executed a Deed of On 12 February 1983, an alias writ of execution was issued by the
Absolute Sale conveying the ownership of the subject lot in favor of Claro CFI enforcing its decision in Civil Case No. 3083. By then, Mata was
L. Laureta the predecessor-in-interest of private respondents. On 10 already dead while his heirs (petitioners) refused to acknowledge the
May 1947, Mata executed another document selling the same property deed of sale in accordance with the said decision. In lieu of the requisite
to Fermin Caram, Jr. (Caram), who caused the cancellation of OCT No. acknowledgement, the officer-in-charge of the court (now RTC, Branch
3019. In lieu thereof, Transfer Certificate of Title No. 140 was issued in VIII, Davao City) certified and affirmed the due execution of the deed of
Caram's name. sale executed between Mata and Laureta. Thereafter, on 21 February
1984, the deed of absolute sale in favor of Laureta was duly approved
On 25 June 1956, Laureta filed before the Court of First Instance by the Minister of Natural Resources. Finally, on 9 May 1985, TCT No.
of Tagum (now RTC) an action, docketed as Civil Case No. 3083, to T-46346 covering the subject lot was issued in the name of Laureta.
declare the first sale of the subject lot in his favor valid and the second
sale thereof to Caram void. On 20 April 1983, the RTC rendered judgment in Civil Case No.
1071 declaring, among others, that the decision in Civil Case No. 3083
On 29 February 1964, the CFI of Tagum rendered judgment as in favor of private respondents had "become stale and unenforceable
follows: due to prescription." It ordered the return of the ownership of the subject
lot to petitioners.
"WHEREFORE, judgment is hereby rendered:
On appeal by private respondents, the CA affirmed in toto the CFI
decision in Civil Case No. 1071. The case was then elevated to the
1. Declaring that the deed of sale, Exhibit A, executed by Supreme Court which reversed and set aside the decision of the
Marcos Mata in favor of Claro L. Laureta stands and prevails CA. Speaking through Justice Regalado, the Court, in its decision[3] in
over the deed of sale, Exhibit F, in favor of Fermin Caram, G.R. No. 72194 promulgated on 5 April 1990, ruled that the execution of
Jr.; the judgment in Civil Case No. 3083 was not time-barred because the
ten-year period for the execution of the judgment in Civil Case No. 3083
2. Declaring as null and void the deed of sale, Exhibit F, in commenced to run only on 12 February 1982 when the decision denying
favor of Fermin Caram, Jr.; Caram's petition became final and executory .
3. Directing Marcos Mata to acknowledge the deed of sale, Upon the belief that they could still exercise their right to
Exhibit A, in favor of Claro L. Laureta; repurchase the subject lot under the Public Land Act, on 22 November
1990, petitioners filed with the RTC, Branch 1 of Tagum, Davao City, an
4. Directing Claro L. Laureta to secure the approval of the action against private respondents for legal redemption, reconveyance
Secretary of Agriculture and Natural Resources on the deed, and consignation, docketed as Civil Case No. 2468.
Exhibit A, after Marcos Mata shall have acknowledge the
same before a notary public; Maintaining that Civil Case No. 2468 would render nugatory and
ineffectual the decision of the court in G.R. No. 72194, private
5. Directing Claro L. Laureta to surrender to the Register of respondents instituted with this Court a petition for injunction and
Deeds for the City and Province of Davao the prohibition seeking, among others, to restrain the trial court from
Owner's Duplicate of Original Certificate of Title No. 3019 proceeding with said case. On 11 March 1991, this Court referred the
and the latter to cancel the same; same to the CA for resolution.
28
The CA ruled in favor of private respondents and permanently filed said Manifestation with Motion. He urged the Court to decide the
enjoined the RTC from further proceeding with Civil Case No. 2468. The case on the merits.
CA categorically declared that petitioners' right to repurchase the
subject lot under the Public Land Act had already
5. Upon the other hand, most of the petitioners, namely Calrita Mata
prescribed.[4] Petitioners filed a motion for reconsideration but it was
Pasindo, Julieta Mata Abundo, Engracio Mata, Dagakan Mata vda. de
denied by the CA in its resolution, dated 12 November 1991.
Cuanas, Marcelo Mata, Severino Antolihao, Arcadio Mata Pasindo,
Aggrieved, the petitioners filed the instant Petition for review Lucia Mata Antolihao and Meliton Mata, filed their Manifestation with
alleging in the main that respondent CA erred in holding that petitioners Motion (to Comment and/or Confirm), dated 27 March 1996. They
right to repurchase the subject property under Section 119 of the Public affirmed their respective signatures on the Manifestation with Motion of
Land Act had already prescribed. 23 November 1995 and the attachments thereto and averred that they
understood the contents thereof as these were fully explained to them
After the parties have submitted their respective pleadings, this in the presence of the Provincial Officer of the OSCC in Tagum,
Court issued a resolution, dated 5 September 1994, denying the petition Davao. They reiterated their prayer that they be allowed to withdraw
for review for failure of the petitioners to sufficiently show that their petition.
respondent court committed any reversible error in rendering the
assailed decision.
6. On 5 September 1996, Isidro Sembrano submitted to this Court a
Upon petitioners motion for reconsideration, dated 27 September Joint Affidavit of petitioners Ceelstino Mata and Ricarda Mata, dated 21
1994, however, this Court, in its resolution, dated 24 October 1994, February 1996, claiming, among others, that they were deceived into
reinstated the instant petition, gave due course to the same and directed signing the amicable settlement. On 10 January 1997, Isidro Sembrano
the parties to file their respective memoranda. submitted a Joint Affidavit of Rosendo Mata-Pasindo, Carmelita Mata-
Pasindo, Wlfredo Mata and Julieta Mata-Abundio, dated 9 January
In their petition, the fundamental issue raised by petitioners is 1997, again claiming that they were deceived into signing the amicable
whether or not they could still exercise their right to repurchase the settlement. Curiously, however, except for Julieta Mata-Abundio, the
subject lot under the Public Land Act. In their motion for reconsideration three (3) other affiants, namely, Rosendo Mata-Pasindo, Carmelita
and memorandum, however, petitioners question the validity of the sale Mata-Pasindo and Wilfredo Mata, were not signatories to the amicable
of the subject lot to Laureta. They contend that said sale was void settlement.
because the document evidencing the same was written in English, a
language not understood by the vendor, and that it was not approved by 7. On 23 June 1997, petitioners filed with the Court their Joint Affidavit,
the Office for the Southern Cultural Communities (OSCC) in violation of
dated 26 May 1997, reiterating their Manifestation with Motion of 23
Section 4(n), Republic Act No. 1888, as amended, in relation to Section November 1995. They manifested in the Joint Affidavit that they
120 of the Public Land Act.
voluntarily signed the amicable settlement and reiterated their prayer
Subsequently, the various pleadings separately filed by petitioners that they be allowed to withdraw their petition. In support of said Joint
themselves, on one hand, and Atty. Rodolfo U. Jimenez, their counsel, Affidavit, petitioners attached thereto the report of Mr. Romero A.
and Isidro Sembrano, their purported attorney-in-fact, on the other hand, Maing, the Provincial Officer of the OSCC in Tagum, Davao, dated 10
have left this Court baffled as to petitioners real stand on the February, regarding an investigation he conducted on 3 February 1997
matter. Thus: attended by petitioners. Mr. Maing attested that petitioners
categorically denied having been coerced, forced or intimidated into
signing the amicable settlement. Upon Mr. Maing's query, petitioners
1. In a Manifestation with Motion, dated 23 November 1995, filed by expressed their desire to proceed with the amicable settlement of the
petitioners themselves without the assistance of their counsel, the case.
informed the Court that they have agreed to an amicable settlement of
the case with private respondents. In view thereof, they prayed that
they be allowed to withdraw their petition. Attached to the said 8. Thereafter, Atty. Jimenez filed a motion, dated 25 August 1997,
Manifestation with Motion were petitioners letters, dated 23 November urging this Court to resolve the petition. He also filed a Motion to
1995, addressed to their attorney-in-fact (Isidro Sembrano) and to their Require Personal Appearance of Petitioners before the OSCC to Verify
counsel-on-record (Attys. Winston F. Garcia and Rodolfo U. Jimenez), their Final Stand on the Petition, dated 29 September 1997. In said
informing them of the termination of their services. The amicable motion, Atty. Jimenez admitted that he had only been in contact with
settlement, of even date, purportedly signed by all the petitioners and the attorney-in-fact of petitioners and never with petitioners
private respondents attorney-in-fact, was also attached to the said themselves.
Manifestation with Motion.
9. Private respondents then filed a Motion to Dismiss Petition, dated 10
2. On 15 January 1996, Celestino Mata and Andres Basaca filed with September 1997. Petitioners likewise filed an Opposition to Motion to
the Court their respective affidavits, dated 30 December Resolve Petition Filed by attorney Rodolfo U. Jimenez as Counsel for
1995. Celestino Mata, one of petitioners, claimed that he is the same Petitioners, dated 1 October 1997. In said opposition, signed by all the
person referred to as Lucino Mata who was made to sign the petitioners themselves, they reiterated that the amicable settlement of
Manifestation with Motion, the letters terminating the services of the 23 November 1995 was their own free and voluntary act. They
attorney-in-fact and the lawyers, and the amicable settlement, all dated explained that although it was written in English, the contents thereof
23 November 1995. Celestino Mata averred that he did not understand were translated and fully explained to them in the dialect known to and
the contents of these documents and that his signatures thereon were understood by them. With regard to their relationship to Attorney
obtained by fraud. Jimenez, petitioners denied that they personally engaged him to
represent them in this case. It was allegedly only Isidro Sembrano,
acting on his own, who engaged Atty. Jimenez legal services. At any
3. For his part, Alfredo Basaca assailed the authority of Arcadio Mata rate, having terminated the same on 23 November 1995, petitioners
Pasindo to sign the amicable settlement on behalf of the heirs of claimed that Atty. Jimenez no longer had any authority to represent
Marcos and Codidi Mata. While Alfredo Basaca asserted that he is one them in the case. Petitioners reiterated their prayer that they be
of the heirs of the spouses Mata, however, the records show that he is allowed to withdraw their petition. The Provincial Officer of the OSCC
not named as one of the petitioners in this case. in Tagum, Davao issued a Certification, dated 3 October 1997,
attesting that the contents of said opposition were fully explained to
4. The Court, in its Resolution, dated 26 February 1996, directed the petitioners in their dialect.
petitioners and Atty. Jimenez to comment on and/or confirm the
Manifestation with Motion of 23 November 1995. In compliance 10. In a resolution, dated 10 December 1997, the Court required Atty.
therewith, Atty. Jimenez filed his Comment, dated 29 March 1996, Jimenez to file his comment on said opposition. In compliance
informing the Court that he was not consulted by petitioners when they therewith, Atty. Jimenez averred in his comment, dated 5 February
29
1998, that he is merely protecting the interests of petitioners and urged Laureta as we affirmed the findings of the lower court to the effect that
this Court to resolve the case on the merits. A few months later, said while the sale to Laureta was voidable, as it was procured by force, the
counsel filed the Motion for Leave to File Attached Joint Affidavit of same "was cured when, after the lapse of four years from the time the
Some of the Petitioners, dated 1 June 1998. The Joint Affidavit, dated intimidation ceased, Marcos Mata lost both his rights to file an action for
20 March 1998, purportedly executed by six (6) affiants, namely, annulment or set up the nullity of the contract as a defense in an action
Arcadio M. Pasindo, Julieta M. Abundio, Celestino Mata, Clarita M. to enforce the same."[6] We stated therein that "the first sale in favor of
Pasindo, Marcelo Mata and Ricarda vda. de Ayonan, averred that they Laureta prevails over the sale in favor of Caram."[7] This pronouncement
are retracting their statements contained in the Manifestation with cannot be construed in any other way but that the Court affirmed the
Motion, dated 23 November 1995, and its attachments, and in the validity of the sale of the subject property in favor of Laureta as against
Opposition to Motion to Resolve Petition Filed by Atty. Rodolfo the sale of the same to Caram, which we categorically declared as void.
Jimenez as counsel for petitioners, dated 1 October 1997.
Then again, in the case of Heirs of Claro L. Laureta vs.
Intermediate Appellate Court,[8] this Court ordered the dismissal of Civil
11. The affiants in said Joint Affidavit claimed that they were deceived Case No. 1071 filed by petitioners. It must be noted that in their
into signing and/or affixing their thumbmarks on the said pleadings and complaint therein, petitioners also raised the issue of the nullity of the
documents. They stated that they are no longer withdrawing their deed of sale executed between Mata and Laureta on the ground that,
petition and urged the Court to resolve it on the merits. A careful among others, it had not been approved by the then Secretary of
perusal of the said Joint Affidavit shows that petitioners Marcelo Mata Agriculture and Natural Resources as required by law. Thus, by ordering
and Ricarda vda. de Ayonan did not personally affix their respective the dismissal of Civil Case No. 1071, we, in effect, upheld anew the
signatures thereon.Rather, two (2) other persons signed above their validity of the sale of the subject property in favor of Laureta. In the said
names although it does not appear that they had been duly authorized decision, we likewise allowed private respondents to proceed with the
by petitioners Marcelo Mata and Ricarda vda. de Ayonan to do so. execution of the judgment in Civil Case No. 3083 as the same was not
yet time-barred.
12. Petitioners thereafter filed their Opposition, dated 4 November
The foregoing rulings in the earlier related cases, which had long
1998, to Atty. Jimenez Motion to Resolve petition. Attached to the said
attained finality, upholding the validity of the sale of the subject property
opposition is a Clarificatory Affidavit, dated 26 August 1998, executed
in favor of Laureta effectively foreclose any further inquiry as to its
by the petitioners except Celestino Mata and Clarita Mata Pasindo,
validity. This is in consonance with the doctrine of res judicata as
who did not affix their respective signatures thereon. In said affidavit,
embodied in Rule 39, Section 47 of the Rules of Court:
affiants accused Isidro Sembrano and Atty. Manuel Iral, Chief of the
Legal Division of the Central Office of the OSCC of having conspired "Sec. 47. Effect of judgments or final orders. The effect of a
with each other and deceived some of the petitioners into signing the judgment or final order rendered by a court of the
Joint Affidavit, dated 20 March 1998, and retracting their statements in Philippines, having jurisdiction to pronounce the judgment or
the Manifestation with Motion, dated 23 November 1995. Affiants final order, may be as follows:
affirmed that they voluntarily signed said Manifestation with Motion and
its attached documents including the amicable settlement. They (a) x x x
likewise maintained that Isidro Sembrano is no longer authorized to act
on their behalf and that Atty. Jimenez no longer had any authority to (b) In other cases, the judgment or final order is, with respect
represent them in this case. Petitioners once again sought this to the matter directly adjudged or as to any other matter that
Court's approval of their amicable settlement. could have been raised in relation thereto, conclusive
between the parties and their successors in interest by title
subsequent to the commencement of the action or special
13. On 1 March 1999, Atty. Jimenez submitted to this Court an proceeding, litigating for the same thing and under the same
Investigation Report, dated 14 January 1999, purportedly prepared by title and in the same capacity: and
Atty. Iral in his capacity as Chief of the Legal Division of the present
National Commission on Indigenous People. Attached to the report (c) In any other litigation between the same parties or their
were the Panunumpa, both dated 11 January 1999, of petitioners successors in interest, that only is deemed to have been
Celestino Mata and Clarita Mata-Pasindo. These affiants affirmed the adjudged in a former judgment or final order which appears
retraction of their signatures on the Manifestation with Motion, dated 23 upon its face to have been so adjudged , or which was
November 1995, claiming that they did not understand its actually and necessarily included therein or necessary
contents. They likewise affirmed the appointment of Isidro Sembrano thereto."
and Atty. Jimenez as their attorney-in-fact and counsel, respectively.
The doctrine of res judicata actually embraces two (2)
concepts: the first is "bar by prior judgment" under paragraph (b) of Rule
Given the dizzying and seeemingly interminable equivocation in 39, Section 47, and the second is "conclusiveness of judgment" under
the stance of the petitioners vis--vis the proposed amicable settlement paragraph (c) thereof.[9] In the present case, the second concept
of 23 November 1995, we are constrained to disregard the same and conclusiveness of judgment applies. The said concept is explained in
proceed with the resolution of the case on the merits. this manner:
I "[A] fact or question which was in issue in a former suit and
As stated earlier, in their Motion for Reconsideration and was there judicially passed upon and determined by a court
Memorandum, petitioners harp on the alleged nullity of the deed of sale of competent jurisdiction, is conclusively settled by the
executed between Mata and Laureta in 1945 on the ground that it was judgment therein as far as the parties to that action and
written in English, a language not understood by the former, and that it persons in privity with them are concerned and cannot be
was not approved by the OSCC in violation of Section 4(n), Republic Act again litigated in any future action between such parties or
No. 1888, as amended, in relation to Section 120 of the Public Land their privies, in the same court or any other court of
Act. The issue of the validity or nullity of the aforesaid deed of sale, concurrent jurisdiction on either the same or different cause
however, had already been passed upon by this Court in the case of action, while the judgment remains unreversed by proper
of Caram, Jr. vs. Laureta,[5] the first case decided at length by this Court authority. It has been held that in order that a judgment in
involving the subject property. Previously, another petition filed by Mata one action can be conclusion as to a particular matter in
questioning the decision of the CA which upheld the sale of the subject another action between the same parties or their privies, it is
property to Laureta was dismissed by this Court on 24 February 1981. essential that the issue be identical. If a particular point or
question is in issue in the second action, and the judgment
In the Caram case, the issue raised was which sale was valid will depend on the determination of that particular point or
considering that Mata sold the same property twice: first to Laureta and question, a former judgment between the same parties or
later on to Caram. We upheld therein the validity of the sale in favor of their privies will be final and conclusive in the second if that
30
same point or question was in issue and adjudicated in the The term "conveyance" imports the transfer of legal title from one
first suit. x x x."[10] person to another. It usually takes place upon the execution of the deed
purporting to transfer the ownership of the land as the same is already
Although the action instituted by petitioners in the lower court in valid and binding against the parties thereto even without the act of
this case (action for reconveyance) is different from the actions they registration. The registration is intended to protect the buyer against
instituted in the earlier cases, the concept of conclusiveness of judgment claims of third parties against subsequent alienations by the vendor, and
still applies because under this principle "the identity of causes of action is certainly not necessary to give effect, as between the parties, to their
is not required but merely identity of issues."[11] deed of sale. Thus, for the purpose of reckoning the five-year period to
exercise the right to repurchase, the date of conveyance is construed to
Simply put, conclusiveness of judgment bars the relitigation of refer to the date of the execution of the deed transferring the ownership
particular facts or issues in another litigation between the same parties
of the land to the buyer.[16]
on a different claim or cause of action. In Lopez vs.
Reyes,[12] we expounded on the concept of conclusiveness of judgment In this case, Mata conveyed the ownership of the subject property
as follows: to Laureta by virtue of a Deed of Absolute Sale, dated 10 June
1945. Petitioners, as heirs of Marcos Mata, filed the action for
"The general rule precluding the relitigation of material
reconveyance (Civil Case No. 2468) on 24 November 1990. From this
facts or questions which were in issue and adjudicated
date up to the time of the filing of the action for reconveyance, more than
in former action are commonly applied to all matters
forty-five (45) years had lapsed. Clearly, petitioners right to redeem the
essentially connected with the subject matter of
subject property had already prescribed by the time they went to
litigation. Thus it extends to questions necessarily
court. As correctly pointed out by the CA, if the five-year period to
involved in an issue, and necessarily adjudicated, or
repurchase were to be reckoned from 12 February 1982, the date of
necessarily implied in the final judgment, although no
finality of our decision in the Caramcase[17] where we declared that the
specific finding may have been made in reference
sale in favor of Laureta prevails over that in favor of Caram, prescription
thereto, and although such matters were directly referred to
of the right to repurchase had set in.
in the pleadings and were not actually or formally
presented. Under this rule, if the record of the former trial The same conclusion would obtain even if the running of the five-
shows that the judgment could not have been rendered year period were to start from 9 May 1985, when Transfer Certificate of
without deciding the particular matter, it will be Title No. T-46346 covering the subject property was issued in favor
considered as having settled that matter as to all future Laureta after the sale in his favor was approved by the Minister of
actions between the parties, and if a judgment Natural Resources in accordance with the decision in Civil Case No.
necessarily presupposes certain premises, they are as 3083, petitioners action to repurchase the subject property would still be
conclusive as the judgment itself. Reasons for the rule are time-barred, as more than five (5) years had already lapsed.
that a judgment is an adjudication on all the matters which
are essential to support it, and that every proposition Petitioners further argue that the five-year period should be
assumed or decided by the court leading up to the final reckoned from September 1990, when the decision of this Court
conclusion and upon which such conclusion is based is as in Laureta[18] allegedly became final and executory. Petitioners maintain
effectually passed upon as the ultimate question which is that prior to the said date, they could not exercise their right to
solved."[13] repurchase since the issue of its ownership was still then under
litigation. This contention is without merit. As earlier discussed, the act
There is no question that the issue of the validity or nullity of the of conveyance within the meaning of the Section 119 of the Public Land
sale of the subject property in favor of Laureta had already been passed Act had already been made long before the finality of our decision
upon by this Court in Caram, where we categorically pronounced that in Laureta. At any rate, said case resolved an entirely different
the sale in favor of Laureta prevails over that of Caram, which we issue, i.e., whether or not private respondents motion for execution of
declared void, and in Laureta, where we stated that private respondents the judgment in Civil Case No. 3083 was time-barred. Accordingly, the
may still validly proceed with the execution of the decision in Civil Case CA correctly ordered the dismissal of petitioners action for reconveyance
No. 3083.Caram became final and executory on 12 February 1982 on ground of prescription.
while Laureta on 5 July 1990. Applying the rule on conclusiveness of
judgment, the matter may no longer be relitigated in this case. III
As held in Legarda vs. Savellano[14] With respect to the procedural issue raised by petitioners, i.e.,
whether the CA erred in granting private respondents petition for
"It is a general rule common to all civilized system of injunction as it had allegedly the effect of disposing the case without trial
jurisprudence, that the solemn and deliberate sentence of on the merits, suffice it to say that since private respondents right to
the law, pronounced by its appointed organs, upon a injunctive relief was clear, the CA properly granted the same. The CA,
disputed fact or a state of facts, should be regarded as a likewise, correctly ordered the dismissal of Civil Case No. 2468 as the
final and conclusive determination of the question litigated, records of the case clearly showed that petitioners right to repurchase
and should forever set the controversy at rest. Indeed, it has had already prescribed. A trial on the merits thereon would serve no
been well said that this maxim is more than a mere rule of other purpose and would only result in needless delay.
law, more than an important principle of public policy: and
that it is not too much to say that it is a fundamental concept Indeed, this controversy has already dragged on for more than
in the organization of the jural sytem. Public policy and half a century, it is, thus, high time that we write finis to it.
sound practice demand that, at the risk of occasional errors,
judgments of courts should become final at some definite
"x x x (L)itigations must end and terminate sometime and somewhere,
date fixed by law. The very object for which courts were
it being essential to the effective administration of justice that once
constituted was to put an end to controversies."[15]
judgment has become final, the winning party be not, through a mere
II subterfuge, deprived of the fruits of the verdict. Hence, courts must
guard themselves against any scheme to bring about that result, for
The next issue is whether or not petitioners can still validly constituted a they are to put an end to controversies, they should frown
exercise their right to repurchase the subject property pursuant to upon any attempt to prolong it. Public policy and sound practice
Section 119 of the Public Land Act: demand that at the risk of occasional errors, judgments of courts
should become final and irrevocable at some definite date fixed by
law. Interes rei publicae ut finis sit litium.xxx."[19]
"Sec. 119. Every conveyance of land acquired under the free patent or
homestead provisions, when proper, shall be subject to repurchase by
the applicant, his widow, or legal heirs, within a period of five (5) years WHEREFORE, premises considered, the petition is hereby DENIED and
from date of conveyance," the assailed decision of the respondent Court of Appeals is AFFIRMED.
31
G.R. Nos. 129377 & 129399 February 22, 2007 appeal memorandum.10 Accordingly, Free Patent No. DENR IV-FP No.
00002P and Original Certificate of Title No. P-9927 were issued in
favor of and in the name of dela Cruz on 26 October 1990.11
HEIRS OF WENCESLAO TABIA, SPOUSES ERLINDO MAMONONG
and VIRGINIA DE LUMBAN, HEIRS OF MANUEL SOMO and
FELICIDAD SOCORRO, SPOUSES NICANOR OSORIO and In Civil Case No. SC-2852, petitioners accused the Director of Lands of
MARIETTA DE LEON, SPOUSES MAXIMINO PEREZ and JOVITA unlawful conspiracy with dela Cruz and gross ignorance of the law in
LADUB, HEIRS OF THE SPOUSES JUAN RABACA CRISTINA issuing the 1 February 1989 decision. They claimed that the decision
BADIOLA, JULIANA ANSAY, MACRA BADILLO, ROSALIA RABIE was obtained through misrepresentation of facts and pursuant to a
and HEIRS OF PEPING MERCADO and CONCORDIA conspiracy for some unlawful and illegal consideration. They further
ABAYARI, Petitioners, claimed damages, attorneys’ fees and litigation expenses.
vs.
COURT OF APPEALS, ABRAHAM DELA CRUZ and DIRECTOR OF
Dela Cruz filed a Motion to Dismiss12 Civil Case No. SC-2852 on the
LANDS ABELARDO PALAD, JR.,Respondents.
following grounds: (1) lack of jurisdiction, and (2) bar by prior judgment.
On the other hand, the Director of Lands, through the Office of the
DECISION Solicitor General, filed an Answer.13 Petitioners filed a Motion for
Admission of/and Opposition to Motion to Dismiss.14
TINGA, J.:
On 19 August 1991, the trial court resolved to deny the motion to
1 dismiss.15 Meanwhile, dela Cruz filed a Reply16 to petitioner’s
Before this Court are two Petitions for Review both filed under Rule 45
Opposition to the Motion to Dismiss.
of the Revised Rules of Court assailing the 29 November 1996
Decision,2 as well as the 4 June 1997 Resolution3 of the 8th Division of
the Court of Appeals in CA-G.R. CV No. 39205, which affirmed the 31 On 7 May 1992, dela Cruz filed a Motion for Reconsideration of the 19
August 1992 Order4 of the Regional Trial Court of Sta. Cruz, Laguna in August 1991 Order of the trial court.17 On 31 August 1992, the trial
Civil Case No. SC-2852 and denied reconsideration thereof, court granted reconsideration and dismissed the complaint.18
respectively.
The trial court noted the Director of Lands’ exhaustive findings of fact
On 16 April 1991, Francisco, Amparo, Rosita, Araceli and Teresita, all and conclusions of law. It held that petitioners’ failure to exploit the
surnamed Tabia; Yolanda, Roynilo, Tomas, Jr., Domingo, Carlito and available administrative remedy of appeal to the Secretary of
Augustus, all surnamed Añonuevo; Susan, Jojo, and Wilma, all Agriculture and Natural Resources rendered the decision of the
surnamed Cacalda; and Danilo, Moises, Jr., Ramon and Roberto, all Director of Lands final and executory. Consequently, the filing of Civil
surnamed Paraiso (herein petitioners) filed a complaint, docketed as Case No. SC-2852 was deemed premature for failure to exhaust
Civil Case No. SC-2852, for Annulment of Free Patent No. DENR IV- administrative remedies. Further, the decision of the Director of Lands
FP No. 00002P and Damages and/or Reconveyance of Title with the having become final, res judicata operated to preclude the trial court
Regional Trial Court (RTC) of Laguna against Abraham dela Cruz (dela from assuming jurisdiction. The trial court further found that petitioners
Cruz), representing the heirs of Antonina Rabie, and Abelardo G. were precluded from questioning the jurisdiction of the Director of
Palad, Jr., Director of Lands. Lands because they voluntarily submitted themselves to said
jurisdiction by actively participating in B.L. Claim No. 288(n). Finally, it
held that the decision of the Director of Lands was supported by
The case arose from a Decision5 rendered by the Director of Lands on
substantial evidence.
1 February 1989 in B.L. Claim No. 288(n), the dispositive portion of
which reads:
On 11 September 1992, petitioners filed with the trial court a Notice of
Appeal to the Court of Appeals of the Order dated 31 August
WHEREFORE, the claim of the Heirs of Wenceslao Tabia represented
1992.19 On 16 September 1992, the records of the case were ordered
by Narciso Tabia, et al[.] is hereby dismissed and this case, dropped
forwarded to the Court of Appeals.20
from the records. Within the period of sixty (60) days from finality
hereof, the [petitioners] shall remove their improvements from the land
and shall vacate the premises thereof. The Free Patent Application On 29 November 1996, the Court of Appeals rendered a Decision
(Unnumbered) of Antonina Rabie, represented by Abraham dela Cruz, affirming the Order of the trial court.21 The appellate court stressed the
is hereby amended to exclude therefrom the portions occupied by the fact that the matters raised by petitioner in Civil Case No. SC-2852
Provincial Road and Lumban Elementary School. As thus amended the were the same matters raised in their protests filed in B.L. Claim No.
same shall be given further due course. 288(n).
[Petitioners] anchored their right to, and interest in, the land by virtue of
The first issue is the personality of petitioners to bring the action for
the sale executed by the heirs of Wenceslao Tabia and alleged
annulment of Free Patent No. DENR IV-FP No. 00002P. Suffice it to
continuous possession of their respective portions. As earlier
say that since the land in this case was public land prior to the
mentioned, Tabia was not the owner of the land in question and as
issuance of the free patent, the only party who could question that
such, he has nothing to transmit to his heirs. Corrorarily,[sic] his
grant is the government, represented by the Solicitor General. The free
heirs has [sic] nothing to sell in favor of the
patent is a grant by the government, acting through the Director of
[petitioners].29 [Emphasis supplied.]
Lands. Thus, the cancellation thereof is a matter between the grantor
and the grantee.36
33
On the issue of jurisdiction, there is no question that the Director of
Lands had jurisdiction over B.L. Claim No. 288(n). Under
Commonwealth Act (C.A.) No. 141, or the Public Land Law, the
Director of Lands has jurisdiction, authority and control over public
lands.37 Section 4 of C.A. No. 141 states:
The alleged pendency of a cadastral case involving Lot No. 1430 is not
at all inconsistent with the Director of Lands’ exercise of jurisdiction in
B.L. Claim No. 288(n). In fact, the assumption underlying the initiation
of cadastral registration proceedings is that the parcels of land covered
by the cadastral proceedings are public lands and it is up to the
claimants as oppositors to plead and prove otherwise. Precisely, the
cadastral proceedings is an innovation which was conceived to hasten
and accelerate registration of lands with the Director of Lands, not the
claimants, initiating the proceedings.38 Since there is no showing that
the cadastral case adjudicated Lot No. 1430 in favor of one of the
claimants therein, it may still be presumed to be land of the public
domain under the jurisdiction of the Director of Lands.
34
ALEJANDRO MORAGA, represented by ENRIQUE G.R. No. 166781
predecessor-in-interest, Victoriano Ipapo, was 9.2986 hectares, when in
MORAGA, truth and in fact, it was only 6.3197 hectares, (2) that the CLT was issued
Petitioner, in violation of respondents and/or Victoriano Ipapos retention rights, 3)
Present: that the tenants, the Moragas violated their obligations as tenants.
PANGANIBAN, C.J.
Chairperson, Finding that the EP was issued not in accordance with
- versus - YNARES-SANTIAGO,
Presidential Decree No. 27 and that the Moragas violated their
AUSTRIA-MARTINEZ,
obligations as tenants of the subject landholding, the Provincial
CALLEJO, SR.,Adjudicator,
and in a decision dated 30 June 1994, rendered a judgment in
CHICO-NAZARIO,
favor of
JJ.respondents. The dispositive portion of the decision reads:
SPS. JULIAN AND FELICIDAD SOMO, SPS. REYNALDO
AND CARMELITA FERNANDEZ, and GIL AND WHEREFORE, premises considered
HERMINIGILDA SAN DIEGO, Promulgated: judgment is hereby rendered as follows:
Respondents.
1. Finding the landholding of
September 5, 2006 the
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - late Victoriano Ipapo not
x covered by P.D.
27. Accordingly, EP No.
496453 issued in favor of
DECISION Alejandro Moraga is
hereby recalled and
cancelled.
CHICO-NAZARIO, J.:
2. Ordering defendant
Alejandro Moraga and all
This Petition for Review under Rule 45 of the Rules of Court, other persons acting in his
filed by petitioner Enrique Moraga, seeks to nullify and set aside the 23 behalf to vacate the
April 2004 Decision[1] and 11 January 2005 Resolution of the Court of premises in question for
Appeals in CA-G.R. SP No. 70051 which reversed and set aside the the peaceful possession of
Decision of the Department of Agrarian Reform Adjudication Board the plaintiff.[2]
(DARAB) in DARAB Case No. 5086 dated 11 January 2001.
The property in dispute is a parcel of agricultural land The Moragas filed a motion for reconsideration which was
consisting of 1.7467 hectares which is located denied for lack of merit.
in Pandayan, Meycauayan, Bulacan, and covered under Transfer
Certificate of Title (TCT) No. T-5926 in the name The Moragas then appealed to the Court of Appeals.
of Victoriano Ipapo who died on 6 June 1976. This property was
tenanted by Alejandro Moraga, the deceased father of petitioner Enrique In the meantime, respondents filed an application for retention
Moraga. with the Department of Agrarian Reform (DAR) which was opposed by
On 7 March 1973, Victoriano Ipapo sold the landholding to his petitioner Enrique Moraga. In an Order dated 22 February 1994, the
daughters Felicidad, Carmelita, and Herminigilda, and their respective Regional Director of DAR Region III granted the application for retention
spouses, Julian Somo, Reynaldo Fernandez and Gil San Diego by respondents.
(respondents) for P10,000.00 per Bilihan Tuluyan of even date.
Petitioner appealed to the Secretary of Agrarian Reform who
Inasmuch as an affidavit of consent of the tenant is required affirmed the decision of the Regional Director in an Order dated 14
by the agrarian laws in the transfer of title, Alejandro Moraga on 19 October 1994.
November 1979 executed a Sinumpaang Salaysayadmitting that he had
knowledge and consent of the sale. Thus, on 19 November 1979, a new Unfazed, petitioner appealed the ruling of the Secretary of
certificate of title over the disputed land, TCT No. T-29031 (M), was Agrarian Reform to the Court of Appeals. Said appealed ruling of the
issued in favor of the respondents. Secretary of Agrarian Reform was consolidated by the Court of Appeals
with the appealed decision of the DARAB in Case No. 567-Bul 93. The
Unknown to respondents, on 22 July 1981, a Certificate of consolidated cases were docketed as CA-G.R. No. SP No. 38445.
Land Transfer (CLT) No. 0-042737 was issued in favor of Alejandro
Moraga for the same parcel of agricultural land. On the basis of such In a Decision dated 28 September 1995, the Court of Appeals
CLT, Alejandro Moraga, on 3 November 1993, filed an application for dismissed the two appeals in CA-G.R. SP No. 38445, thus affirming the
the issuance of Emancipation Patent (EP) over the land in question rulings of the DARAB and the Secretary of Agrarian Reform. The
before the Provincial Assessor of Bulacan. Apparently, respondents decision became final and executory since no either motion for
belatedly filed a written protest of the application since on 16 September reconsideration nor appeal from the same were ever filed by any party.
1993, EP No. 496453 was granted to Alejandro Moraga, and pursuant
to which TCT No. EP-108(M) was likewise issued in his favor. While the CA-G.R. SP No. 38445 was still pending before the
Court of Appeals, petitioner and Mercedes Moraga, on 6 April 1995,
On 11 October 1993, respondents filed with the DARAB a filed before the Provincial Adjudicator of Malolos, Bulacan, a complaint
complaint for Cancellation of the Certificate of Land Transfer and the for Redemption against respondents which was docketed as DARAB
Emancipation Patent and for Ejectment against Enrique and Mercedes Case No. 927-Bul 95. The complaint alleged that upon Alejandro
Moraga (Moragas), the surviving heirs of the late Alejandro Moraga who Moragas death, the Moragas succeeded Alejandro Moraga as tenants
died on 25 August 1993. Mercedes Moraga is the surviving spouse of over the parcel of land that is the subject of the controversy. It was
the deceased Alejandro Moraga. The case was docketed as DARAB likewise averred that the sale entered into between Victoriano Ipapoand
Case No. 567-Bul 93. respondents on 7 March 1973, involving the said property, was made
without the written notice given to Alejandro Moraga and the DAR, in
Respondents alleged in their complaint, among other things, violation of Section 2 of Republic Act No. 3844, as amended by Republic
the following: (1) that the proceedings leading to the issuance of the CLT Act No. 6389. Within the purview of the said provisions of law,
in favor of Alejandro Moraga were irregular, i.e., the issuance of such the Moragas were exercising their right of redemption over the said
CLT was based on a fraudulent or false certification of the Provincial landholding.
Assessor of Bulacan stating that the total landholding of their
35
In a Decision dated 23 November 1995, the Provincial WHETHER OR NOT PETITIONER HAS A RIGHT
Adjudicator, taking into consideration the earlier ruling of the Court of OF REDEMPTION OVER THE LANDHOLDING
Appeals in CA-G.R. SP No. 38445, which affirmed the judgment of the SUBJECT OF THE INSTANT CASE;
DARAB ordering Alejandro Moraga to vacate the premises of land in
question and the order of the Secretary of Agrarian Reform granting B
respondents application for retention, opined that the case for
redemption has been rendered moot and academic inasmuch as IF IN THE NEGATIVE, WHETHER OR NOT
respondents, by virtue of the said ruling of the Court of Appeals, had PETITIONER SHALL REMAIN AS TENANT OF
acquired vested rights over the subject property. Accordingly, such THE LANDHOLDING ENTITLED TO SECURITY
vested rights entitled respondents to exercise all the attributes of OF TENURE;
ownership, hence, said property is beyond the reach of redemption. The
Provincial Adjudicator further argued that even if the action for C
redemption may be availed of, the same is still barred by prescription
considering that the Moragas exercised the said right only after 22 years WHETHER OR NOT RESPONDENTS HAVE A
had lapsed. LEGAL RIGHT TO EJECT PETITIONER FROM
THE LANDHOLDING IN QUESTION;
On appeal, the DARAB in Case No. 927-Bul 95 affirmed with
modification the decision of the Provincial Adjudicator. The DARAB, D
while sustaining the Provincial Adjudicators ruling that the Moragas right
to redeem has prescribed, stated that the heirs of Alejandro Moraga shall IF IN THE AFFIRMATIVE, WHETHER OR NOT
remain as tenants and are entitled to security of tenure, to wit: PETITIONER IS ENTITLED TO DISTURBANCE
COMPENSATION.[4]
WHEREFORE, premises considered, the
appealed decision is hereby MODIFIED declaring
the heirs of the late Alejandro Moraga, herein As gleaned from the issues presented by petitioner, it is quite
plaintiffs, are not entitled to redeem the subject evident that petitioner would want this Court to revisit the final
property. However, they shall remain as tenants and executory decisions of the Court of Appeals in CA-G.R. SP No.
thereof entitled to security of tenure.[3] 38445, where petitioners claim of security of tenure was settled, and in
CA-G.R. SP No. 63895 which resolved petitioners complaint for
redemption. However, this cannot be done by this Court without violating
The Moragas filed a motion for reconsideration of the the doctrine of res judicata.
foregoing decision denying their claim for redemption.
In Spouses Barretto v. Court of Appeals,[5] this Court
Respondents likewise filed a motion for reconsideration of the elucidated the doctrine of res judicata in this fashion:
said decision insofar as it decreed that Alejandro Moragas heirs shall
remain tenants entitled to security of tenure. Section 47, Rule 39 of the Rules of Court,
provides:
Both motions were denied by the DARAB.
Sec. 47. Effect of judgments or final
Hence, both parties appealed to the Court of Appeals. orders. The effect of a judgment or final order
rendered by a court of the Philippines, having
The appeal of the Moragas which assailed the DARAB jurisdiction to pronounce the judgment or final
decision denying their claim for redemption was docketed as CA-G.R. order, may be as follows:
SP No. 63895, while the appeal of respondents questioning the DARAB
decision ordering the heirs of Alejandro Moraga to remain as tenants xxxx
entitled to security of tenure was docketed as CA-G.R. SP No. 70051.
(b) In other cases, the judgment or final
In a decision dated 29 January 2003, the Special Third order is, with respect to the matter directly adjudged
Division of the Court of Appeals rendered a judgment in CA-G.R. SP No. or as to any other matter that could have been
63895 affirming in toto the decision of the DARAB. Since no appeal was raised in relation thereto, conclusive between the
filed by either party, this decision became final and executory. parties and their successors in interest by title
subsequent to the commencement of the action or
On the other hand, the Sixth Division of the Court of Appeals, special proceeding, litigating for the same thing and
in resolving the sole issue in CA-G.R. SP No. 70051 on whether or not under the same title and in the same capacity; and
the DARAB is correct in ordering that the heirs of Alejandro Moraga
remain as tenants in the subject landholding, ruled for the (c) In any other litigation between the
respondents. It ratiocinated that the DARAB committed palpable error in same parties or their successors in interest, that
decreeing that Alejandro Moragas heir shall remain as tenants entitled only is deemed to have been adjudged in a former
to security of tenure considering that the said ruling alters the already judgment or final order which appears upon its face
final and executory decision of the Court of Appeals in CA-G.R. SP No. to have been so adjudged, or which was actually
38445, enunciating that the Moragas are not entitled to security of and necessarily included therein or necessary
tenure for violating their obligations as tenants. thereto.
Undeterred, petitioner filed a motion for reconsideration of the The aforecited rule in point embodies the
above decision. The Court of Appeals did not budge from its stand and fundamental principles of res judicata, finality of
denied the motion in a Resolution dated 11 January 2005. judgment and estoppel by judgment, which means
that once a judgment has become final
Hence, the instant petition. and executory, the issues therein litigated upon are
laid to rest.
Petitioner submitted the following issues:
The doctrine of res judicata is of two
A aspects. The first aspect is the effect of a judgment
as a bar to the prosecution of a second action upon
the same claim, damand or cause of action. The
second aspect precludes the relitigation of a
36
particular fact or issue in another action between Thirdly, tenant Alejandro Moraga aside
the same parties or their successors in interest, on from being remiss in paying his rental has allowed
a different claim or cause of action. third person to occupy portions of his landholding
without informing the landowners. These to the
mind of the Board are acts inimical to the right and
Calalang v. Register of Deeds of Quezon City[6] further obligation of the tenant to pursue and protect his
explained: landholding from any trespassers or would be
occupant without the knowledge and consent of the
The doctrine res judicata actually landowners. In this regard, the Board finds,
embraces two different concepts: (1) bar by former defendant Alejandro Moraga to have violated his
judgment and (b) conclusiveness of judgment. obligations as a tenant to warrant
his ejectment therefore.
The second concept conclusiveness of
judgment - states that a fact or question which was WHEREFORE, premises considered
in issue in a former suit and was there judicially judgment is hereby rendered as follows:
passed upon and determined by a court of
competent jurisdiction, is conclusively settled by the xxxx
judgment therein as far as the parties to that action
and persons in privity with them are concerned and 2. Ordering defendant Alejandro Moraga
cannot be again litigated in any future action and all other persons acting in his behalf to vacate
between such parties or their privies, in the same the premises in question for the peaceful
court or any other court of concurrent jurisdiction on possession of the plaintiff.[9]
either the same or different cause of action, while
the judgment remains unreversed by proper
authority. It has been held that in order that a Petitioner, however, insinuated that in the same decision
judgment in one action can be conclusive as to a for ejectment in CA-G.R. SP No. 38445, the Court of Appeals made a
particular matter in another action between the pronouncement that petitioner remains as tenant of the landholding, viz:
same parties or their privies, it is essential that the
issue be identical. If a particular point or question is Finally, with the finding that the
in issue in the second action, and the judgment will Emancipation Patent issued to Alejandro Moraga
depend on the determination of that particular point was void, petitioners status will revert back to being
or question, a former judgment between the same tenants and thus are liable for the payment of the
parties or their privies will be final and conclusive in corresponding rentals, including the unpaid rentals
the second if that same point or question was in which, from the evidence adduced, was from
issue and adjudicated in the first suit. x x x. 1990.[10]
Res judicata is grounded on fundamental considerations of Contrary to what petitioner believed, the said portion of the
public and sound practice that at the risk of occasional error, the body of the decision is merely an obiter dictum. In fact,
judgments of courts must become final at some definite date set by the dispositive portion of the decision categorically upholds the eviction
law.[7] After the judgment has become final, nothing can be done of petitioner. If indeed, it was pronounced in the said decision that
therewith; otherwise there can be no end to litigation, thus setting at petitioner were to remain as tenant, then the dispositive portion of the
naught the main role of courts, which is to assist in the enforcement of same would not have upheld petitioners eviction. It should be
the rule of law and the maintenance of peace and order, by remembered that while the body of a decision, order or resolution might
settling justiciable controversies with finality.[8] create some ambiguity regarding which way the courts
reasoning propenderates, it is the dispositive portion thereof that finally
In the case under consideration, it bears stressing that the invests rights upon the parties, sets conditions for the exercise of those
Court of Appeals came out with its Decision, dated 28 September 1995, rights, and imposes the corresponding duties and obligations. [11]
in CA-G.R. SP No. 38445, where the issue of security of tenure was
resolved and was laid to rest. The pertinent decision of the DARAB Since CA-G.R. SP No. 38445 resolved the issue of security of
which was affirmed by the Court of Appeals reads: tenure and ordered petitioners eviction, this Court can no longer
entertain petitioners attempt to re-litigate the same on the ground
On the second issue, evidences adduced of res judicata.
reveal that defendant Alejandro Moraga failed to In a zealous attempt to salvage his case for redemption,
pay rentals from 1990 up to the present. Under petitioner insisted that the late Victoriano Ipapo failed to inform
Presidential Decree 816, a tenant who deliberately petitioners deceased father in writing and the DAR of the sale of the land
refuses to pay rentals for two consecutive years can in question in violation of Section 12 of Republic Act No. 6389, amending
be ejected. Section 2 thereof provides: Sections 11 and 12 of Republic Act No. 3844, to wit:
37
redemption. The redemption price shall be the an unraised question, i.e., the issue of security of tenure. This actuation
reasonable price of the land at the time of the sale. of the DARAB prompted respondents to appeal to the Court of Appeals,
docketed as CA-G.R. SP No. 70051, questioning the DARAB decision
that ordered the heirs of Alejandro Moraga to remain as tenants entitled
By raising this issue, petitioner is trying to resuscitate the to security of tenure.
decision of the Court of Appeals in CA-G.R. SP No. 63895, dated 29 On the other hand, petitioner appealed the same decision of
January 2003, which has already attained finality. It must be recalled the DARAB denying him the right to redeem the property. Petitioners
that said decision declared that petitioner lost his right to redeem the appeal was docketed as CA-G.R. SP No. 63895.
property on the grounds of prescription and that petitioners father has
waived his right to redeem said property. Relevant portion of the While the Court of Appeals in CA-G.R. SP No. 70051, limited
decision states: itself to the issue presented by petitioner, the contrary happened in CA-
G.R. SP No. 63895, when the Court of Appeals fell into the same pitfall
It must be noted that the purpose of the as the DARAB in fiddling with the issue of security of tenure. This
written notice required by law is to remove all conduct of the DARAB and the Court of Appeals in CA-G.R. SP No.
uncertainties as to the sale, its terms and its validity, 63895 cannot be countenanced. First, it goes against the tenet that
and to quiet any doubts that the alienation is not courts of justice have no jurisdiction or power to decide a question not in
definitive. The law however, does not prescribe any issue.[14] A judgment that goes outside the issues and purports to
particular form of notice, nor any distinctive method adjudicate something on which the court did not hear the parties, is not
for notifying the redemptioner. So long as only irregular but also extra-judicial and invalid.[15] This norm does not
the redemptioner is informed in writing of the sale only apply to courts but also to quasi-judicial bodies such as the
and the particulars thereof, the period for DARAB.[16] Prescinding from this rule, the DARAB ruling on security of
redemption will start running. x x x A copy of the tenure, which was affirmed by the Court of Appeals in CA-G.R. SP No.
deed of sale, in an authentic form, will satisfy the 63895, is therefore irrregular and invalid. From this disquisition, it is
requirement of the law and serve the purpose readily clear that the decision in CA-G.R. SP No. 63895 is valid only
thereof. insofar as it ruled that petitioner can no longer exercise his right to
redeem the said property. Res judicata is not applicable because CA-
It is worthy to note that the petitioners G.R. SP No. 63895, in effect, has no ruling on the issue of security of
have secured a copy of the said Deed of Sale and tenure which CA-G.R. SP No. 70051 could have modified.
attached the same in their Answer dated October
20, 1993 in DARAB Case No. 567-Bul 93. Thus, it Anent petitioners claim of disturbance compensation, suffice
is proper to reckon the period of redemption it to state that since this matter is brought up for the first time in this
on October 20, 1993. The complaint filed on April 6, Petition for Review, this Court cannot take cognizance of the same. The
1995 is clearly beyond the redemption period of one settled rule is that matters or issues not raised below cannot be raised
hundred eighty (180) days. before this Court for the first time.[17]
SO ORDERED.[12]
Before us are two consolidated cases docketed as G.R. No. 168557 and
G.R. No. 170628, which were filed by petitioners FELS Energy, Inc. The LBAA ruled that the power plant facilities, while they may be
(FELS) and National Power Corporation (NPC), respectively. The first is classified as movable or personal property, are nevertheless considered
a petition for review on certiorari assailing the August 25, 2004 real property for taxation purposes because they are installed at a
Decision[1] of the Court of Appeals (CA) in CA-G.R. SP No. 67490 and specific location with a character of permanency. The LBAA also pointed
its Resolution[2]dated June 20, 2005; the second, also a petition for out that the owner of the bargesFELS, a private corporationis the one
review on certiorari, challenges the February 9, 2005 being taxed, not NPC. A mere agreement making NPC responsible for
Decision[3] and November 23, 2005 Resolution[4] of the CA in CA-G.R. the payment of all real estate taxes and assessments will not justify the
SP No. 67491. Both petitions were dismissed on the ground of exemption of FELS; such a privilege can only be granted to NPC and
prescription. cannot be extended to FELS. Finally, the LBAA also ruled that the
petition was filed out of time.
The pertinent facts are as follows:
Aggrieved, FELS appealed the LBAAs ruling to the Central Board of
On January 18, 1993, NPC entered into a lease contract with Polar Assessment Appeals (CBAA).
Energy, Inc. over 3x30 MW diesel engine power barges moored
at Balayan Bay in Calaca, Batangas. The contract, denominated as an On August 28, 1996, the Provincial Treasurer of Batangas City issued a
Energy Conversion Agreement[5] (Agreement), was for a period of five Notice of Levy and Warrant by Distraint[13] over the power barges,
years. Article 10 reads: seeking to collect real property taxes amounting to P232,602,125.91 as
of July 31, 1996. The notice and warrant was officially served to FELS
10.1 RESPONSIBILITY. NAPOCOR shall be on November 8, 1996. It then filed a Motion to Lift Levy dated November
responsible for the payment of (a) all taxes, import 14, 1996, praying that the Provincial Assessor be further restrained by
duties, fees, charges and other levies imposed by the CBAA from enforcing the disputed assessment during the pendency
the National Government of the Republic of the of the appeal.
Philippines or any agency or instrumentality thereof
to which POLAR may be or become subject to or in On November 15, 1996, the CBAA issued an Order[14] lifting the levy and
relation to the performance of their obligations distraint on the properties of FELS in order not to preempt and render
under this agreement (other than (i) taxes imposed ineffectual, nugatory and illusory any resolution or judgment which the
or calculated on the basis of the net income Board would issue.
of POLAR and Personal Income Taxes of its
employees and (ii) construction permit fees, Meantime, the NPC filed a Motion for Intervention[15] dated August 7,
environmental permit fees and other similar fees 1998 in the proceedings before the CBAA. This was approved by the
and charges) and (b) all real estate taxes and CBAA in an Order[16] dated September 22, 1998.
assessments, rates and other charges in respect of
the Power Barges.[6] During the pendency of the case, both FELS and NPC filed several
motions to admit bond to guarantee the payment of real property taxes
assessed by the Provincial Assessor (in the event that the judgment be
Subsequently, Polar Energy, Inc. assigned its rights under the unfavorable to them). The bonds were duly approved by the CBAA.
Agreement to FELS. The NPC initially opposed the assignment of rights,
citing paragraph 17.2 of Article 17 of the Agreement.
39
On April 6, 2000, the CBAA rendered a Decision[17] finding the power
barges exempt from real property tax. The dispositive portion reads: SO ORDERED.[24]
(b) The petition of FELS, as well as the On August 3, 2005, FELS filed the petition docketed as
intervention of NPC, is dismissed. G.R. No. 168557 before this Court, raising the following issues:
Petitioners contentions are bereft of merit. For its part, the appellate court declared in CA-G.R. SP No.
67491:
Section 226 of R.A. No. 7160, otherwise known as the Local
Government Code of 1991, provides: x x x. The Court announces: Henceforth,
whenever the local assessor sends a notice to the
SECTION 226. Local Board of owner or lawful possessor of real property of its
Assessment Appeals. Any owner or person revised assessed value, the former shall no longer
having legal interest in the property who is not have any jurisdiction to entertain any request for a
satisfied with the action of the provincial, city or review or readjustment. The appropriate forum
municipal assessor in the assessment of his where the aggrieved party may bring his appeal is
property may, within sixty (60) days from the date the LBAA as provided by law. It follows ineluctably
of receipt of the written notice of assessment, that the 60-day period for making the appeal to the
appeal to the Board of Assessment Appeals of the LBAA runs without interruption. This is what We
province or city by filing a petition under oath in the held in SP 67490 and reaffirm today in SP 67491.[37]
form prescribed for the purpose, together with
copies of the tax declarations and such affidavits or To reiterate, if the taxpayer fails to appeal in due course, the
documents submitted in support of the appeal. right of
the local government to collect the taxes due with respect to the
We note that the notice of assessment which the Provincial Assessor taxpayers property becomes absolute upon the expiration of the period
sent to FELS on August 7, 1995, contained the following statement: to appeal.[38] It also bears stressing that the taxpayers failure to question
the assessment in the LBAA renders the assessment of the local
If you are not satisfied with this assessment, you assessor final, executory and demandable, thus, precluding the
may, within sixty (60) days from the date of receipt taxpayer from questioning the correctness of the assessment, or from
hereof, appeal to the Board of Assessment invoking any defense that would reopen the question of its liability on the
Appeals of the province by filing a petition under merits.[39]
oath on the form prescribed for the purpose,
together with copies of ARP/Tax Declaration and In fine, the LBAA acted correctly when it dismissed the
such affidavits or documents submitted in support petitioners appeal for having been filed out of time; the CBAA and the
of the appeal.[32] appellate court were likewise correct in affirming the dismissal.
Elementary is the rule that the perfection of an appeal within the period
therefor is both mandatory and jurisdictional, and failure in this regard
Instead of appealing to the Board of Assessment Appeals (as renders the decision final and executory.[40]
stated in the notice), NPC opted to file a motion for reconsideration of
the Provincial Assessors decision, a remedy not sanctioned by law. In the Comment filed by the Provincial Assessor, it is asserted
that the instant petition is barred by res judicata; that the final and
executory judgment in G.R. No. 165113 (where there was a final
determination on the issue of prescription), effectively precludes the
41
claims herein; and that the filing of the instant petition after an adverse To recall, FELS gave NPC the full power and authority to
judgment in G.R. No. 165113 constitutes forum shopping. represent it in any proceeding regarding real property assessment.
Therefore, when petitioner NPC filed its petition for review docketed as
FELS maintains that the argument of the Provincial Assessor G.R. No. 165113, it did so not only on its behalf but also on behalf of
is completely misplaced since it was not a party to the erroneous petition FELS. Moreover, the assailed decision in the earlier petition for review
which the NPC filed in G.R. No. 165113. It avers that it did not participate filed in this Court was the decision of the appellate court in CA-G.R. SP
in the aforesaid proceeding, and the Supreme Court never acquired No. 67490, in which FELS was the petitioner. Thus, the decision in G.R.
jurisdiction over it. As to the issue of forum shopping, petitioner claims No. 165116 is binding on petitioner FELS under the principle of privity of
that no forum shopping could have been committed since the elements interest. In fine, FELS and NPC are substantially identical parties as to
of litis pendentia or res judicata are not present. warrant the application of res judicata. FELSs argument that it is not
bound by the erroneous petition filed by NPC is thus unavailing.
We do not agree.
On the issue of forum shopping, we rule for the Provincial
Res judicata pervades every organized system of Assessor. Forum shopping exists when, as a result of an adverse
jurisprudence and is founded upon two grounds embodied in various judgment in one forum, a party seeks another and possibly favorable
maxims of common law, namely: (1) public policy and necessity, which judgment in another forum other than by appeal or special civil action
makes it to the interest of the or certiorari. There is also forum shopping when a party institutes two or
State that there should be an end to litigation republicae ut sit litium; and more actions or proceedings grounded on the same cause, on the
(2) the hardship on the individual of being vexed twice for the same gamble that one or the other court would make a favorable disposition.[44]
cause nemo debet bis vexari et eadem causa. A conflicting doctrine
would subject the public peace and quiet to the will and dereliction of
individuals and prefer the regalement of the litigious disposition on the Petitioner FELS alleges that there is no forum shopping since
part of suitors to the preservation of the public tranquility and the elements of res judicata are not present in the cases at bar; however,
happiness.[41] As we ruled in Heirs of Trinidad De Leon Vda. de Roxas as already discussed, res judicata may be properly applied herein.
v. Court of Appeals:[42] Petitioners engaged in forum shopping when they filed G.R. Nos.
168557 and 170628 after the petition for review in G.R. No. 165116.
x x x An existing final Indeed, petitioners went from one court to another trying to get a
judgment or decree rendered favorable decision from one of the tribunals which allowed them to
upon the merits, without fraud pursue their cases.
or collusion, by a court of
competent jurisdiction acting
upon a matter within its It must be stressed that an important factor in determining the
authority is conclusive on the existence of forum shopping is the vexation caused to the courts and the
rights of the parties and their parties-litigants by the filing of similar cases to claim substantially the
privies. This ruling holds in all same reliefs.[45] The rationale against forum shopping is that a party
other actions or suits, in the should not be allowed to pursue simultaneous remedies in two
same or any other judicial different fora. Filing multiple petitions or complaints constitutes abuse of
tribunal of concurrent court processes, which tends to degrade the administration of justice,
jurisdiction, touching on the wreaks havoc upon orderly judicial procedure, and adds to the
points or matters in issue in the congestion of the heavily burdened dockets of the courts.[46]
first suit.
xxx Thus, there is forum shopping when there exist: (a) identity of
parties, or at least such parties as represent the same interests in both
Courts will simply refuse to reopen what actions, (b) identity of rights asserted and relief prayed for, the relief
has been decided. They will not allow the same being founded on the same facts, and (c) the identity of the two
parties or their privies to litigate anew a question preceding particulars is such that any judgment rendered in the pending
once it has been considered and decided with case, regardless of which party is successful, would amount to res
finality. Litigations must end and terminate judicata in the other.[47]
sometime and somewhere. The effective and
efficient administration of justice requires that once
Having found that the elements of res judicata and forum
a judgment has become final, the prevailing party
shopping are present in the consolidated cases, a discussion of the other
should not be deprived of the fruits of the verdict by
issues is no longer necessary. Nevertheless, for the peace and
subsequent suits on the same issues filed by the
contentment of petitioners, we shall shed light on the merits of the case.
same parties.
As found by the appellate court, the CBAA and LBAA power
This is in accordance with the doctrine
barges are real property and are thus subject to real property tax. This
of res judicata which has the following elements: (1)
is also the inevitable conclusion, considering that G.R. No. 165113 was
the former judgment must be final; (2) the court
dismissed for failure to sufficiently show any reversible error. Tax
which rendered it had jurisdiction over the subject
assessments by tax examiners are presumed correct and made in good
matter and the parties; (3) the judgment must be on
faith, with the taxpayer having the burden of proving
the merits; and (4) there must be between the first
otherwise.[48] Besides, factual findings of administrative bodies, which
and the second actions, identity of parties, subject
have acquired expertise in their field, are generally binding and
matter and causes of action. The application of
conclusive upon the Court; we will not assume to interfere with the
the doctrine of res judicata does not require
sensible exercise of the judgment of men especially trained in appraising
absolute identity of parties but merely
property. Where the judicial mind is left in doubt, it is a sound policy to
substantial identity of parties. There is
leave the assessment undisturbed.[49] We find no reason to depart from
substantial identity of parties when there is
this rule in this case.
community of interest or privity of interest
between a party in the first and a party in the
In Consolidated Edison Company of New York, Inc., et al. v.
second case even if the first case did not
The City of New York, et al.,[50] a power company brought an action to
implead the latter.[43]
review property tax assessment. On the citys motion to dismiss, the
Supreme Court of New
York held that the barges on which were mounted gas turbine power
42
plants designated to generate electrical power, the fuel oil barges which Time and again, the Supreme Court has stated that taxation
supplied fuel oil to the power plant barges, and the accessory equipment is the rule and exemption is the exception.[55] The law does not look with
mounted on the barges were subject to real property taxation. favor on tax exemptions and the entity that would seek to be thus
privileged must justify it by words too plain to be mistaken and too
Moreover, Article 415 (9) of the New Civil Code provides that categorical to be misinterpreted.[56] Thus, applying the rule of strict
[d]ocks and structures which, though floating, are intended by their construction of laws granting tax exemptions, and the rule that doubts
nature and object to remain at a fixed place on a river, lake, or coast are should be resolved in favor of provincial corporations, we hold that FELS
considered immovable property. Thus, power barges are categorized is considered a taxable entity.
as immovable property by destination, being in the nature of machinery
and other implements intended by the owner for an industry or work The mere undertaking of petitioner NPC under Section 10.1
which may be carried on in a building or on a piece of land and which of the Agreement, that it shall be responsible for the payment of all real
tend directly to meet the needs of said industry or work.[51] estate taxes and assessments, does not justify the exemption. The
privilege granted to petitioner NPC cannot be extended to FELS. The
Petitioners maintain nevertheless that the power barges are covenant is between FELS and NPC and does not bind a third person
exempt from real estate tax under Section 234 (c) of R.A. No. 7160 not privy thereto, in this case, the Province of Batangas.
because they are actually, directly and exclusively used by petitioner
NPC, a government- owned and controlled corporation engaged in the It must be pointed out that the protracted and circuitous
supply, generation, and transmission of electric power. litigation has seriously resulted in the local governments deprivation of
revenues. The power to tax is an incident of sovereignty and is unlimited
We affirm the findings of the LBAA and CBAA that the owner in its magnitude, acknowledging in its very nature no perimeter so that
of the taxable properties is petitioner FELS, which in fine, is the entity security against its abuse is to be found only in the responsibility of the
being taxed by the local government. As stipulated under Section 2.11, legislature which imposes the tax on the constituency who are to pay for
Article 2 of the Agreement: it.[57] The right of local government units to collect taxes due must always
be upheld to avoid severe tax erosion. This consideration is consistent
with the State policy to guarantee the autonomy of local
OWNERSHIP OF POWER governments[58] and the objective of the Local Government Code that
BARGES. POLAR shall own the Power Barges and they enjoy genuine and meaningful local autonomy to empower them to
all the fixtures, fittings, machinery and equipment achieve their fullest development as self-reliant communities and make
on the Site used in connection with the Power them effective partners in the attainment of national goals. [59]
Barges which have been supplied by it at its own
cost. POLAR shall operate, manage and maintain In conclusion, we reiterate that the power to tax is the most
the Power Barges for the purpose of converting potent instrument to raise the needed revenues to finance and support
Fuel of NAPOCOR into electricity.[52] myriad activities of the local government units for the delivery of basic
services essential to the promotion of the general welfare and the
enhancement of peace, progress, and prosperity of the people.[60]
xxx
43
G.R. No. 167426 January 12, 2009 related to petitioner’s main business. Thus, the union members may be
considered part of the bargaining unit of petitioner’s rank-and-file
employees. However, she held that the petition could not be
CHRIS GARMENTS CORPORATION, petitioner,
entertained except during the 60-day freedom period. She also found
vs.
no reason to split petitioner’s bargaining unit.
HON. PATRICIA A. STO. TOMAS and CHRIS GARMENTS
WORKERS UNION-PTGWO LOCAL CHAPTER No.
832, respondents. On May 16, 2003, the union filed a second petition for certification
election.The Med-Arbiter dismissed the petition on the ground that it
was barred by a prior judgment. On appeal, the Secretary of Labor and
Employment affirmed the decision of the Med-Arbiter.11
QUISUMBING, J.:
Respondents assert that the findings of the NLRC are The parties in SSC and NLRC cases are not strictly
conclusive upon the SSC under the principle of res judicata and in line identical. Rizal Poultry was impleaded as additional respondent in the
with the ruling in Smith Bell v. Court of Appeals.Respondents argue that SSC case. Jurisprudence however does not dictate absolute identity but
there is substantially an identity of parties in the NLRC and SSC cases only substantial identity.[19] There is substantial identity of parties when
because Angeles himself, in his Petition, treated Rizal Poultry, BSD Agro there is a community of interest between a party in the first case and a
and San Diego as one and the same entity. party in the second case, even if the latter was not impleaded in the first
case.[20]
Respondents oppose the view proffered by SSC that the
evidence to prove the existence of employer-employee relationship BSD Agro, Rizal Poultry and San Diego were litigating under
obtaining before the NLRC and SSS are entirely different. Respondents one and the same entity both before the NLRC and the SSC. Although
opine that the definition of an employee always proceeds from the Rizal Poultry is not a party in the NLRC case, there are numerous
existence of an employer-employee relationship. indications that all the while, Rizal Poultry was also an employer of
Angeles together with BSD Agro and San Diego. Angeles admitted
In essence, the main issue to be resolved is whether res before the NLRC that he was employed by BSD Agro and San Diego
judicata applies so as to preclude the SSC from resolving anew the from 1985 until 1997.[21] He made a similar claim in his Petition before
existence of employer-employee relationship, which issue was the SSC including as employer Rizal Poultry as respondent.[22] Angeles
previously determined in the NLRC case. presented as evidence before the SSC his Identification Card and a Job
Order to prove his employment in Rizal Poultry. He clarified in his
Res judicata embraces two concepts: (1) bar by prior Opposition to the Motion to Dismiss[23] filed before SSC that he failed to
judgment as enunciated in Rule 39, Section 47(b) of the Rules of Civil adduce these as evidence before the NLRC even if it would have proven
Procedure; and (2) conclusiveness of judgment in Rule 39, Section his employment with BSD Agro. Most significantly, the three
47(c).[14] respondents, BSD Agro, Rizal Poultry and San Diego, litigated as one
entity before the SSC. They were represented by one counsel and they
There is bar by prior judgment when, as between the first case submitted their pleadings as such one entity. Certainly, and at the very
where the judgment was rendered and the second case that is sought least, a community of interest exists among them. We therefore rule that
to be barred, there is identity of parties, subject matter, and causes of there is substantial if not actual identity of parties both in the NLRC and
action. In this instance, the judgment in the first case constitutes an SSC cases.
absolute bar to the second action.[15]
As previously stated, an identity in the cause of action need not obtain
But where there is identity of parties in the first and second in order to apply res judicata by conclusiveness of judgment. An identity
cases, but no identity of causes of action, the first judgment is conclusive of issues would suffice.
only as to those matters actually and directly controverted and
determined and not as to matters merely involved therein. This is the The remittance of SSS contributions is mandated by Section
concept of res judicata known as conclusiveness of judgment. Stated 22(a) of the Social Security Act of 1997, viz:
differently, any right, fact or matter in issue directly adjudicated or
necessarily involved in the determination of an action before a SEC. 22. Remittance of Contributions.
competent court in which judgment is rendered on the merits is - (a) The contributions imposed in the preceding
conclusively settled by the judgment therein and cannot again be Section shall be remitted to the SSS within the first
litigated between the parties and their privies, whether or not the claim, ten (10) days of each calendar month following the
demand, purpose, or subject matter of the two actions is the same.[16] month for which they are applicable or within such
time as the Commission may prescribe. Every
Thus, if a particular point or question is in issue in the second employer required to deduct and to remit such
action, and the judgment will depend on the determination of that contributions shall be liable for their payment and if
particular point or question, a former judgment between the same parties any contribution is not paid to the SSS as herein
or their privies will be final and conclusive in the second if that same prescribed, he shall pay besides the contribution a
point or question was in issue and adjudicated in the first suit. Identity of penalty thereon of three percent (3%) per month
cause of action is not required but merely identity of issue.[17] from the date the contribution falls due until paid. x
x x.
The elements of res judicata are: (1) the judgment sought to
bar the new action must be final; (2) the decision must have been The mandatory coverage under the Social Security Act is
rendered by a court having jurisdiction over the subject matter and the premised on the existence of an employer-employee
parties; (3) the disposition of the case must be a judgment on the merits; relationship.[24] This is evident from Section 9(a) which provides:
and (4) there must be as between the first and second action, identity of
parties, subject matter, and causes of action. Should identity of parties, SEC. 9. Coverage. - (a) Coverage in the
subject matter, and causes of action be shown in the two cases, then res SSS shall be compulsory upon all employees not
judicata in its aspect as a bar by prior judgment would apply. If as over sixty (60) years of age and their
between the two cases, only identity of parties can be shown, but not employers: Provided, That in the case of domestic
identical causes of action, then res judicata as conclusiveness of helpers, their monthly income shall not be less than
judgment applies.[18] One thousand pesos (P1,000.00) a month x x x.
Verily, the principle of res judicata in the mode of Section 8(d) of the same law defines an employee as any
conclusiveness of judgment applies in this case. The first element is person who performs services for an employer in which either or both
present in this case. The NLRC ruling was affirmed by the Court of mental or physical efforts are used and who receives compensation for
Appeals. It was a judicial affirmation through a decision duly such services, where there is an employer-employee relationship. The
47
illegal dismissal case before the NLRC involved an inquiry into the 27, 2000 which has long attained finality. Our
existence or non-existence of an employer-employee relationship. The affirmation of the NLRC decision of May 18, 1999
very same inquiry is needed in the SSC case. And there was no was an adjudication on the merits of the case.
indication therein that there is an essential conceptual difference
between the definition of employee under the Labor Code and the Social Considering the foregoing
Security Act. circumstances, the instant case falls squarely under
In the instant case, therefore, res judicata in the concept of the umbrage of res judicata, particularly, under the
conclusiveness of judgment applies. The judgment in the NLRC case rule on conclusiveness of judgment. Following this
pertaining to a finding of an absence of employer-employee relationship rule, as enunciated in Smith Bell and Co. and
between Angeles and respondents is conclusive on the SSC case. Carriaga, Jr. cases, We hold that the relief sought
in SSC Case No. 9-15225-01 is inextricably related
A case in point is Smith Bell and Co. v. Court of Appeals[25] which, to Our ruling in CA GR SP No. 55383 to the effect
contrary to SSC, is apt and proper reference. Smith Bell availed of the that private respondent was not an employee of
services of private respondents to transport cargoes from the pier to the petitioners.[28]
company's warehouse. Cases were filed against Smith Bell, one for
illegal dismissal before the NLRC and the other one with the SSC, to The NLRC decision on the absence of employer-employee
direct Smith Bell to report all private respondents to the SSS for relationship being binding in the SSC case, we affirm the dismissal by
coverage. While the SSC case was pending before the Court of Court of Appeals of the SSC case.
Appeals, Smith Bell presented the resolution of the Supreme Court in
G.R. No. L-44620, which affirmed the NLRC, Secretary of Labor, and WHEREFORE, premises considered, the petition is DENIED.
Court of Appeals finding that no employer-employee relationship existed The Court of Appeals Decision dated 20 September 2004, as well as its
between the parties, to constitute as bar to the SSC case. We granted Resolution dated 9 February 2005, isAFFIRMED.
the petition of Smith Bell and ordered the dismissal of the case. We held
that the controversy is squarely covered by the principle of res judicata,
particularly under the rule on conclusiveness of judgment. Therefore, the
judgment in G.R. No. L-44620 bars the SSC case, as the relief sought
in the latter case is inextricably related to the ruling in G.R. No. L-44620
to the effect that private respondents are not employees of Smith Bell.
MENDOZA, J: In the Order,16 dated March 17, 2006, the RTC denied the motion to
resolve the motion for substitution of parties and the motion for
issuance of a writ of execution for lack of merit.
This is a petition for review on certiorari under Rule 45 of the Rules of
Court assailing the August 28, 2014 Amended Decision 1 and the April
16, 2015 Resolution2 of the Court of Appeals (CA) in CA-G.R. SP No. In the meantime, Yolanda filed a petition for issuance of letters of
105568, which reversed its December 8, 2011 Decision3 and recalled administration of the estate of Jose, her deceased husband, before the
and set aside the entry of judgment issued on January 6, 2012. Regional Trial Court, Branch 274, Parañaque City. In the December
29, 2006 Order, the Letter of Administration was issued appointing
Yolanda as administratix of the estate of Jose.
The Antecedents:
Without waiting for the RTC to rule on the said motion, defendant
Consequently, Atty. Aguas filed the Motion for Substitution,7 dated July spouses filed another petition for certiorari under Rule 65 of the Rules
30, 2001, praying that Jose be substituted by his surviving wife, of Court before the CA, docketed as CA-G.R. SP No. 105568, this time
Yolanda.
questioning the July 25, 2008 Order and the August 1, 2008 Writ of
Execution issued by the RTC. Defendant spouses insisted that the
In its Order,8 dated May 13, 2002, the RTC denied the motion for RTC gravely abused its discretion when it allowed the substitution and
declaration of nullity of the May 2, 2001 decision. Defendant spouses then issued the writ of execution.
then elevated the matter before the CA, docketed as CA-G.R. CV No.
74988. In a Resolution[[,9]] dated July 30, 2004, the CA dismissed the In its January 16, 2009 Order,27 the RTC denied the motion to recall or
petition for want of appellant’s brief. On August 30, 2004, an entry of
hold in abeyance the implementation of the August 1, 2008 writ of
judgment10 was issued. execution and the August 5, 2008 sheriff’s notice to pay for lack of
merit. Thereafter, the notice of garnishment and the notice of levy were
Thereafter, Atty. Aguas filed a motion for execution,11 but it was issued. Spouses Navarra’s property, covered by TCT No. 103473, was
opposed by defendant spouses on the ground that no valid substitution levied and subsequently sold in a public auction pursuant to the writ of
had been made, and that the continued appearance of Atty. Aguas execution.28
was ultra vires.12
Meanwhile, on October 28, 2009, the CA rendered a Decision,29 in CA-
In the Order,13 dated October 28, 2005, the motion for execution was G.R. SP No. 104667, dismissing the petition for certiorari and declaring
deemed withdrawn upon motion of Atty. Aguas. the substitution of plaintiff in order. The CA held that the rule on
substitution was not a matter of jurisdiction but a requirement of due
process; and that considering that both parties had already completed
the presentation of their evidence in chief before Jose died, neither of
49
them was denied due process of law. Thus, the CA stated that the JUDGMENT MAY NO LONGER BE MODIFIED IN ANY
belated substitution of Jose as plaintiff to the case did not affect the RESPECT, EVEN IF THE MODIFICATION IS MEANT TO
validity of the final and executory judgment. CORRECT WHAT IS PERCEIVED TO BE AN
ERRONEOUS CONCLUSION OF LAW OR FACT.
On December 8, 2011, a decision30 was rendered in CA-G.R. SP No.
105568, in favor of defendant spouses. The CA reversed and set B. THE COURT OF APPEALS ERRED WHEN IT
aside the questioned RTC order granting the motion for execution and AMENDED A FINAL AND EXECUTORY DECISION UPON
the issuance of the writ of execution. The CA held that the complaint PRIVATE RESPONDENT’S MERE MOTION FOR
for damages, arising from malicious prosecution filed by Jose against RECONSIDERATION.
defendant spouses was a purely personal action that did not survive
upon his death; and because the action was deemed abated upon his
C. THE COURT OF APPEALS LEGALLY ERRED IN
death, the RTC was found to have gravely abused its discretion when it
EXCEPTING THE INSTANT CASE FROM THE RULE
allowed the substitution of Jose and issued the writ of execution. The
THAT THE MISTAKE OR NEGLIGENCE OF COUNSEL
CA further stated that upon the death of Jose, the RTC lost jurisdiction
BINDS THE CLIENT.
over the case and the decision rendered therein was a void judgment;
hence, all acts performed pursuant thereto and all claims emanating
therefrom had no legal effect. D. AT ALL EVENTS, THE COURT OF APPEALS
LEGALLY ERRED IN DISMISSING THE PETITION IN CA-
G.R. SP NO.105568.[[34]]
On January 6, 2012, the December 8, 2011 decision of the CA in CAG.
R. SP No. 105568 became final and executory and the entry of
judgment31 was issued. Petitioners argue that it is beyond the power of the CA to amend its
original decision in this case, dated December 8, 2011, for it violates
the principle of finality of judgment and its immutability. They point out
On December 16, 2013, almost two years later, Yolanda filed her
that the said CA decision had acquired finality, hence, it could no
Urgent Omnibus Motion 32 praying for the recall/lifting of the entry of
longer be modified in any respect even if the modification was meant to
judgment and for the admission of the attached motion for
correct erroneous conclusions of fact or law, or it would be made by
reconsideration. Yolanda contended that she was totally unaware of
the court that rendered it or by the highest court of the land.
this petition for certiorari filed before the CA and docketed as CA-G.R.
SP No. 105568; that although notices were sent to her counsel, Atty.
Caboboy, the latter did not inform or furnish her with copies of the Petitioners also aver that there was no conflict in the decisions
notices and the petition; that Atty. Caboboy did not file any comment rendered by the CA in CA-G.R. SP No. 104667 and in the present case
on the petition or a motion for reconsideration; and that Atty. as the two cases involved different issues. The former case ruled on
Caboboy’s gross negligence and mistake should not bind her because the validity of the January 25, 2008 Order of the RTC which granted
the said negligence and mistake would amount to deprivation of her the substitution of Jose by Yolanda, while the present case questioned
property without due process of law. the July 25, 2008 Order of the RTC which granted the motion
for execution of judgment filed by Yolanda.
On August 28, 2014, the CA promulgated an amended decision in CA-
G.R. SP No. 105568. While the CA took note that no comment was Finally, petitioners assert that the CA erred when it granted the motion
filed by defendant spouses despite notice, it granted the omnibus for reconsideration filed by Yolanda after almost two years from the
motion and the motion for reconsideration filed by Yolanda. The time the decision was rendered. They point out that Yolanda did not
appellate court recalled and set aside the entry of judgment and even indicate in
reversed its December 8, 2011 decision in the interest of substantial
justice. The CA discovered that the appellate court rendered two
her motion for reconsideration the exact date of her receipt of the copy
conflicting decisions in CA-G.R. SP No. 104667 and CA-G.R. SP No.
105568. In CA-G.R. SP No. 104667, earlier filed by defendant of the December 8, 2011 decision and that it could not be presumed
spouses, the appellate court arrived at a decision allowing the that she learned of it only two (2) years after its issuance. They
contend that the respondent was negligent because she waited for two
substitution of Jose. The same issue of substitution was debunked in
the December 8, 2011 CA decision in CA-G.R. SP No. 105568. long years before she filed a motion for reconsideration. They added
that she should have made efforts to ascertain the status of the case
considering that she was appointed administratix of the estate of Jose.
In its amended decision, the CA did not apply the general rule that the
negligence of counsel would bind the client so as not to deprive
Yolanda of her right to due process of law. On the merits, the CA ruled Respondent Yolanda counters that the CA was correct when it
reversed and set aside its December 8, 2011 decision and dismissed
that the action filed by Jose before the RTC was not extinguished upon
his death as it was one for recovery of damages for injury to his person the petition for certiorari as the issues therein had already been laid to
caused by defendant spouses’ tortuous conduct of maliciously filing an rest in the October 28, 2009 CA decision in CA- G.R. SP No. 104667.
She argues that because the petitions in both CA- G.R. SP No. 104667
unfounded suit.
and CA- G.R. SP No. 105568, involved the same issues and parties
under similar factual and legal settings, the decision rendered in the
Spouses Navarra (petitioners) filed their separate motions for first case became final and could no longer be changed, revised or
reconsideration, but both were denied by the CA in a reversed.
Resolution,33 dated April 16, 2015.
All the arguments by both parties boil down to the lone issue of
Hence, this petition anchored on the following – whether or not the CA erred and violated the principle of immunity of
judgment when it amended its December 8, 2011 decision.
GROUNDS FOR THE PETITION
The Court’s Ruling
THE COURT OF APPEALS DECIDED THE INSTANT CASE IN A
WAY NOT IN ACCORD WITH LAW AND WITH THE APPLICABLE The petition is not meritorious.
DECISIONS OF THE SUPREME COURT.
Well-settled is the rule that a judgment that has acquired finality
A. THE COURT OF APPEALS BREACHED THE "becomes immutable and unalterable, and may no longer be modified
WELLSETTLED RULE THAT A FINAL AND EXECUTORY in any respect, even if the modification is meant to correct erroneous
50
conclusions of fact and law, and whether it be made by the court that the second and third options consequently maintaining the finality of
rendered it or by the Highest Court of the land."35 The rationale of this one of the conflicting judgments. The primary criterion under the
doctrine is to avoid delay in the administration of justice and in order to second option is the time when the decision was rendered and became
put an end to judicial controversies. In the case of Manotok Realty, Inc. final and executory, such that earlier decisions should prevail over the
v. CLT Realty Development Corp.,36 the Court explained the principle current ones since final and executory decisions vest rights in the
of immunity of judgment in this wise: winning party. In the third solution, the main criterion is the
determination of which court or tribunal rendered the decision.
Decisions of this Court should be accorded more respect than those
The doctrine of finality of judgment is grounded on fundamental
made by the lower courts.44
considerations of public policy and sound practice,
51
different division of the CA. Although petitioners would like to impress
to this Court that the issues raised in two cases before the CA were
anchored on different causes of action, the Court rules otherwise.
Under the doctrine of conclusiveness of judgment, facts and issues
actually and directly resolved in a former suit can never again be raised
in any future case between the same parties even involving a different
cause of action.51 The CA decision in CA-G.R. SP No. 104667
concerning the validity of plaintiffs substitution became conclusive on
the parties. Thus, petitioners cannot again seek refuge by filing their
second petition (CA-G.R. SP No. 105568) in the guise of questioning
the order of execution but actually invoking the alleged nullity of the
substitution of plaintiff. Petitioners cannot evade or avoid the
application of res judicata by· simply varying· the form of his action or
adopting a different method of presenting their case.52
52
G.R. No. 202531, August 17, 2016 1. The amount of the levy on the Pequeña Island was fixed at
"P2,065,500.00."
GOMECO METAL CORPORATION, Petitioner, v. THE COURT OF
APPEALS, AND *PAMANA ISLAND RESORT HOTEL AND MARINA 2. The property being levied, i.e., Pequeña Island, was referred
CLUB, INCORPORATED, Respondents. to as "personal properties" of Pamana.
DECISION Notice of Sheriff's Sale, Execution Sale and CA-G.R. SP No. 62391
The facts: The notice of sheriff s sale bears the following entries:
53
Acting on Gomeco's Motion for Reconsideration, the CA issued a No. T-38774 in the name of Pamana. This discovery prompted
Resolution15 dated 9 July 2002. In the said Resolution, the CA modified Gomeco to file, before the RTC in Civil Case No. 4349-V-94, a Motion
its earlier Decision and declared the levy and the ensuing 10 January for the Cancellation of Pamana's Title and the issuance of a new title in
2001 public auction to be valid but only to the extent of the its (Gomeco) name (Motion for Cancellation of Title).
P1,350,000.00 remaining indebtedness of Pamana plus 12% legal
interest thereon and other lawful fees in the implementation of such On 5 January 2005, the RTC issued an Order23 granting Gomeco's
levy and auction.16chanrobleslaw Motion for Cancellation of Title and directing the RD of Iba, Zambales,
to cancel Pamana's title over Pequeña Island and to issue a new title in
Pamana, in turn, filed a Motion for Reconsideration. lieu thereof in the name of Gomeco. In the body, as well as the
dispositive portion of the said Order, however, the RTC mistakenly
On 16 January 2003, the CA issued a Resolution17 wherein it affirmed identified Pamana's title as TCT No. T-38744 instead of TCT No. T-
in all respects its 9 July 2002 Resolution except only to the inclusion of 38774.
the "12% legal interest" as a component of the entire amount
satisfiable by the levy and execution sale. Against the foregoing Order of the RTC, Pamana filed an Urgent
Motion for Reconsideration and a Motion for Correction of the Order
The 16 January 2003 Resolution of the CA became final and executory dated 5 January 2005 (Motion for Correction).
on 10 February 2003.18chanrobleslaw
In its Urgent Motion for Reconsideration, Pamana assails the 5
Motion for Clarification in CA-G.R. SP No. 62391 January 2005 Order of the RTC primarily for being contrary to the
resolutions of the CA in CA-G.R. SP No. 62391. Pamana alleged that it
After the finality of the 16 January 2003 Resolution, Pamana filed with was erroneous for the RTG to recognize Gomeco's absolute ownership
the CA a Motion for Clarification in CA-G.R. SP No. 62391. In the said over the Pequeña Island since the CA, in CA-G.R. SP No. 62391,
motion, Pamana asked the CA to require disclosure of the list of already substantially nullified the levy and public auction on the said
properties in the Pequeña Island that were levied upon and sold during island. Pamana also contended that the Sheriffs Final Deed of Sale
the 10 January 2001 public auction, and their corresponding values. was still premature in light of the 17 September 2004 Resolution of the
CA that required an accounting of the properties sold and the proceeds
Pamana's Motion for Clarification rests on the following key realized from the 10 January 2001 public auction. For Pamana, no
assumptions:ChanRoblesVirtualawlibrary such final deed of sale can be issued in favor of Gomeco unless the 17
September 2004 Resolution is first complied with to the letter.
1. The object of the Notice of Levy is not actually the In its Motion for Correction, on the other hand, Pamana asked that its
Pequeña Island itself but only the "personal title over Pequeña Island, as stated in the 5 January 2005 Order, be
properties" in the said island; changed from TCT No. T-38744 to TCT No. T-38774.
2. The 10 January 2001 public auction resulted in the On 20 April 2005, Gomeco, for its part, filed a Motion to Order the
sale not of the Pequeña Island but only of certain Appointed Sheriff to Annotate the Notice of Levy, Deed of Sale and
properties therein; Sheriffs Final Deed "of Sale [in] TCT No. T-38774 (Motion to Order
Annotation). In the said motion, Gomeco prayed that the RTC, pending
3. The notice of levy, the Minutes of Auction Sale and the possible cancellation of TCT No. T-38774 and the issuance of a
the Sheriffs Return, however, did not specify which new title in its name, order the annotation of the Notice of Levy,
Certificate of Sheriff s Sale and the Sheriffs Final Deed of Sale in TCT
personal properties in the Pequeña Island were
actually levied and sold during the 10 January No. T-38774.
2001 public auction; and cralawlawlibrary
On 3 March 2011, the RTC issued an Order:24
4. The Minutes of Auction Sale and the Sheriffs
Return did not reveal for how much Pamana's 1. Denying Pamana's Urgent Motion for
properties in the Pequeña Island had been sold Reconsideration;
during the 10 January 2001 public auction.
2. Granting Pamana's Motion for Correction;
The CA, at first, denied Pamana's Motion for Clarification. However, on
17 September 2004, the CA issued a Resolution19 directing Deputy 3. Granting Gomeco's Motion to Order Annotation;
Sheriff Montes to "point out which of petitioner's specific properties [in and cralawlawlibrary
the Pequeña Island] had been levied and sold in public auction and to
determine the exact value of said properties if sufficient to satisfy in full 4. Directing its incumbent sheriff, for the purpose
the judgment debt of [P]1,350,000.00 and other lawful expenses" and ascertaining the total amount of money for which
to "return to [Pamana] such amount, if any, in excess of the judgment the levy and sale of the Pequeña Island were
debt."20chanrobleslaw meant to satisfy, to compute the actual amount of
the lawful fees and expenses incurred in
TCT No. T-38774 connection with the enforcement of the writ of
execution.
Meanwhile, on 29 January 2003, Gomeco was issued a Sheriff's Final
Deed of Sale21 over the Pequeña Island. The Sheriffs Final Deed of In compliance with the directive regarding the computation of the actual
Sale attested that Pamana had failed to exercise his right of amount of lawful fees and expenses in the enforcement of the writ of
redemption on the Pequeña Island within the period allowed by law execution, Sheriff Louie C. Dela Cruz (Sheriff Dela Cruz) submitted to
and that, as a consequence thereof, Gomeco was now absolute owner the RTC its Report25cralawred dated 16 March 2011. In the said report,
of the said island. Like the Sheriffs Certificate of Sale, the Sheriffs Final the lawful fees and expenses for the enforcement of the writ of
Deed of Sale was registered22 with the RD of Iba, Zambales, under the execution were pegged at P111,767.75.
Registry of Unregistered Properties pursuant to Section 194 of the
Revised Administrative Code of 1917, as amended. On 25 March 2011, the RD of Iba, Zambales cancelled TCT No. T-
38774 in the name of Pamana and,1 in lieu thereof, issued TCT No.
Sometime in March 2003, however, Gomeco discovered that the 044-2011000502 in favor of Gomeco.
Pequeña Island was not, as it formerly believed, unregistered property
but was in fact registered land under Transfer Certificate of Title (TCT)
CA-G.R. SP No. 119053
54
Moreover, in the same Decision, the CA granted and approved
On 18 April 2011, Pamana filed with the CA a Petition Pamana's Urgent Motion to Approve Tender of Payment and
for Certiorari assailing the 5 January 2005 and 3 March 2011 Orders of Consignation. The CA considered Pamana's submission of checks as
the RTC. This Petition was docketed as CA-G.R. SP No. 119053. a valid tender of payment and consignation and declared all of the
latter's indebtedness thereby extinguished.
During the pendency of the CA-G.R. SP No. 119053, on 6 June 2011,
Pamana filed with the CA an Urgent Motion to Approve Tender of Gomeco moved for reconsideration but the CA, in its
Payment and Consignation accompanied with checks in the aggregate Resolution29 dated 28 June 2012, remained steadfast.
amount of P1,500,000.00. In the said motion, Pamana prayed that the
CA approve the checks so submitted as a valid tender of payment and This Petition
consignation as against all of its outstanding indebtedness (i.e., the
P1,350,000.00 remaining balance under the compromise agreement Aggrieved, Gomeco filed the instant Petition for Certiorari before this
plus the P111,767.75 lawful fees and expenses in the enforcement of Court.
the writ of execution).
In this Petition, Gomeco claims that the CA gravely abused its
Decision of the CA in CA-G.R. SP No. 119053 discretion when it ruled: (a) to reinstate Pamana's title to the Pequeña
Island and (b) to consider the Pamana's submission of checks as a
On 28 December 2011, the CA rendered a Decision26 in CA-G.R. SP valid tender of payment and consignation for all of its outstanding
No. 119053, setting aside the 5 January 2005 and 3 March 2011 indebtedness. Gomeco argues that such rulings rest on findings that
Orders of the RTC in Civil Case No. 4349-V-94. The CA also directed were patently erroneous.
therein the Registrar of Deeds of Iba, Zambales, to cancel TCT No.
044-2011000502 in the name of Gomeco and to reinstate TCT No. T- Gomeco thus prays for the nullification of the Decision of the CA in CA-
38774 in favor of Pamana. G.R. SP No. 119053, as well as for the restoration of the 5 January
2005 and 3 March 2011 Orders of the RTC in Civil Case No. 4349-V-
Siding with Pamana, the CA held that it was grave abuse of discretion 94.
on the part of the RTC to have recognized Gomeco's absolute
ownership over the Pequeña Island. In support, the CA gives the OUR RULING
following ratiocinations:
I
1. There was no valid levy on the Pequeña Island.27
a. The Resolutions in CA-G.R. SP No. The Decision of the CA in CA-G.R. SP No. 119053 is underpinned,
62391 already substantially nullified the primarily, by two findings: first, that there was no valid levy upon the
levy and public auction on the Pequeña Pequeña Island and second, that—even assuming that there was such
Island. a valid levy—the redemption period in favor of Pamana was not yet
fully exhausted by the time a Sheriffs Final Deed of Sale was issued in
favor of Gomeco. We have examined both findings in light of the facts
b. The Notice of Levy and the Notice of
and the applicable law. And we found that Gomeco is right; both
Sheriffs Sale issued by Sheriff Montes
findings were patently erroneous.
cannot be considered as a valid levy on
the Pequeña Island. The two notices
The erroneous findings—most especially the first—were of such gross
confuse as to what properties are being
nature that they indicate that the CA, in making them, had at the least
subjected to levy; the Notice of Levy
committed grave abuse of discretion, if not acted wholly beyond its
says "personal properties" but the
jurisdiction.
Notice of Sheriffs Sale says
"personal/realproperties."
We are therefore compelled to GRANT the instant Petition.
55
circumstances that must concur in order for the bar by former judgment became final and executory on 10 February
rule to apply:35 2003.40chanrobleslaw
1. There is a judgment in a case that: 2. CA-G.R. SP No. 119053 fits the second
circumstance. It is a case filed subsequent to CA-
chanRoblesvirtualLawlibrary a. disposed of such G.R. SP No. 62391. In fact, CA-G.R. SP No.
case on the merits, 119053 was only filed on 18 April 2011—or more
than eight years after CA-G.R. SP No. 62391 was
b. was issued by a court of competent finally decided on the merits.
jurisdiction,
3. Both CA-G.R. SP No. 62391 and CA-G.R. SP No.
c. has attained final and executory status; 119053 featured Pamana and Gomeco as parties.
Though technically based on distinct causes of
2. There is another case subsequently filed in court; action,41 both CA-G.R. SP No. 62391 and CA-G.R.
SP No. 119053 nonetheless passed upon the
issue of the validity of the levy on and auction sale
3. Between the previous case and the subsequent
of Pequeña Island. Such facts satisfy the third
case, there is an identity of parties;
circumstance.
and cralawlawlibrary
4. The previous case and the subsequent case are Verily, the collusiveness of judgment rule ought to have applied. The
based on the same claim, demand or cause of 16 January 2003 Resolution in CA-G.R. SP No. 62391 should have
action. had a preclusive effect on the subsequent case, CA-G.R. SP No.
119053, as to all matters settled in the said resolution—including the
validity of the levy on the Pequeña Island.
The second application of the principle of res judicata, on the other
hand, contemplates of a scenario that is almost similar to that of the The CA, therefore, cannot pass upon, and should not have passed
first: the parties to a case, whose merits had already been finally upon, the issue pertaining to the validity of the levy on the Pequeña
adjudicated by a court with jurisdiction, (or their privies) also become Island. That issue was already settled in the final ruling of CA-G.R. SP
parties to a subsequent case. However, unlike in the first application, No. 62391 and such settlement is conclusive upon both Pamana and
the subsequent case herein does not involve the same claim, Gomeco. It cannot be relitigated or be redetermined, much less be
demand or cause of action as the previous case. In this scenario, the overturned, in any subsequent case between them. Res judicata has
principle of res judicata applies, not to wholly bar the subsequent case, already set in.
but only to preclude the relitigation or redermination therein of any
matter actually or deemed36settled by the judgment in the By disregarding the final ruling in CA-G.R. SP No. 62391, the CA
previous case.37 This application of res judicata is known as the evidently went beyond its jurisdiction and violated the principle of res
"conclusiveness of judgment rule" and is sanctioned under Section judicata, particularly the collusiveness of judgment rule. Accordingly,
47(c) of Rule 39 of the Rules of Court.38chanrobleslaw the finding that there was no valid levy on the Pequeña Island—the
very fruit of such disregard—must be stricken down.
The circumstances that must concur in order for the conclusiveness of
judgment rule to apply arelthe same as those needed for the bar by The 17 September 2004 Resolution in CA-G.R. SP No. 62391 is
judgment rule to set in, except for the last circumstance. In the Void Under the Doctrine of Immutability of Judgment
application of the conclusiveness of judgmerit rule, the previous case
and the subsequent case must notbe based on the Isame claim, In disregarding the 16 January 2003 Resolution in CA-G.R. SP No.
demand or cause of action but only pass upon the same matters or 62391, the CA seems to have harbored the belief that the foregoing
issues. resolution had somehow been supplanted by a later resolution in the
same case—the 17 September 2004 Resolution in CA-G.R. SP No.
Guided by the foregoing precepts, we shall now address the issue at 62391.
hand.
To facilitate recollection of the 17 September 2004 Resolution in CA-
Conclusiveness of Judgment Rule Applies; Issue of the Validity of G.R. SP No. 62391, as well as the circumstances surrounding its
the; Levy On and Auction Sale of Pequeña Island Precluded by issuance, we reproduce hereunder the following portion in our
the 16 January 2003 Resolution in CA-G.R. SP No. 62391 narration of facts:ChanRoblesVirtualawlibrary
Motion for Clarification in CA-G.R. SP No. 62391
In this case, we find that the CA in CA-G.R. SP No. 119053 grossly
erred when it made a finding concerning the validity of the levy on the After the finality of the 16 January 2003 Resolution, Pamana filed with
Pequeña Island that is diametrically opposed to what was already the CA a Motion for Clarification in CA-G.R. SP No. 62391. In the said
finally settled in the earlier case- of CA-G.R. SP No. 62391. By ignoring motion, Pamana asked the CA to require disclosure of the list of
and contradicting the final settlement in CA-G.R. SP No. 62391, the CA properties in the Pequeña Island that were levied upon and sold during
evidently went beyond its jurisdiction and violated the principle of res the 10 January 2001 public auction, and their corresponding values.
judicata, particularly the conclusiveness of judgment rule.
Pamana's Motion for Clarification rests on the following key
A review of the facts clearly reveal the existence of circumstances that assumptions:ChanRoblesVirtualawlibrary
should have warranted the application of the conclusiveness of
judgment rule in CA-G.R. SP No. 119053, insofar as the matter of
validity of the levy on the Pequeña Island is 1. The object of the Notice of Levy is not
concerned:ChanRoblesVirtualawlibrary actually the Pequeña Island itself but
only the "personal properties" in the said
island;
1. The 16 January 2003 Resolution in CA-G.R. SP
No. 62391 satisfies the first circumstance. Such
2. The 10 January 2001 public auction
resolution, in effect, brought the merits of CA-G.R.
resulted in the sale not of the Pequeña
SP No. 62391 to a close.39 It essentially held that
Island but only of certain properties
there was a valid levy and auction on the
therein;
Pequeña Island. The resolution, moreover, already
56
3. The Notice of Levy, the Minutes of resolution aim to address any injustice or inequity that may result from
Auction Sale and the Sheriffs Return, the implementation of the 16 January 2003 Resolution. With none of
however, did not specify which personal the exceptions to the application of the doctrine of immutability of
properties in the Pequeña Island were judgment existing in its favor, the 17 September 2004 Resolution in
actually .levied and sold during the 10 CA-G.R. SP No. 62391—with its confused attempt to alter a final and
January 2001 public auction; executory ruling in the same case—must then be stricken down as a
and cralawlawlibrary nullity.
4. The Minutes of Auction Sale and the Having thus settled the folly of the first finding, we shall now proceed to
Sheriffs Return did not reveal for how an exposition of the second finding.
much Pamana's properties in the
Pequeña Island had been sold during B. The Second Finding: Redemption Period of Pamana
the 10 January 2001 public auction.
To enable its Decision to stand in the event that the first finding fails,
the CA made its second finding under the context that the levy and
The CA, at first, denied Pamana's Motion for Clarification. However, on
auction on the Pequeña Island were valid.
17 September 2004, the CA issued a Resolution directing Sheriff
Montes to "point out which of [Pamana's] specific properties [in the
Under such context, the CA found that the period of redemption in
Pequeña Island] had been levied and sold in public auction and to
favor of Pamana was not yet fully exhausted by the time a Sheriffs
determine the exact value of said properties if sufficient to satisfy in full
Final Deed of Sale was issued in favor of Gomeco. According to the
the judgment debt of [P]1,350,000.00 and other lawful expenses" and
CA, the said period could not be" considered to have even begun in
to "return to [Pamana] such amount, if any, in excess of the judgment
view of the registration of the Sheriffs Certificate of Sale of the
debt."
Pequeña Island at a "wrong" registry.
The 17 September 2004 Resolution in CA-G.R. SP No. 62391 was a
virtual acceptance of Pamana's assumptions in its Motion for We do not agree.
Clarification.42 The resolution—with its distinct directive for the sheriff to
"point out which of [Pamana's] specific properties had been levied and Despite the error in the registration of the Sheriffs Certificate of Sale,
sold in public auction"43—indubitably proceeds from the same we hold that Pamana ought to be held bound, nonetheless, by such
proposition that the object of the levy in the case was never the registration. As shall be discussed below, there are circumstances
Pequeña Island itself but only the properties therein. peculiar to this case that warrants us to adopt such a holding. Hence,
we find that the period of redemption of Pamana would have been fully
Though it fashioned itself as affirmative of the 16 January 2003 exhausted by the time a Sheriffs Final Deed of Sale was issued in
Resolution in CA-G.R. SP No. 62391,44the 17 September 2004 favor of Gomeco.
Resolution in actuality and in effect varied a very significant import of
the former resolution and of all other resolutions in CA-G.R. SP No. Redemption in Execution Sales; Commencement of Redemption
62391—that the levy, whose validity was sustained under the said Period; Registration with the Register of Deeds
case, had for its object no other property but the Pequeña Island
itself.45chanrobleslaw When real property is levied and sold on execution pursuant to a final
judgment, our rules of procedure allows the judgment debtor49 or a
Thereupon lies the reason why the CA's apparent reliance on the 17 "redemptioner"50 to redeem such property within one (1) year from the
September 2004 Resolution in CA-G.R. SP No. 62391 is mistaken. "date of the registration of the certificate of
The said Resolution could never have validly altered, amended or sale" viz:ChanRoblesVirtualawlibrary
modified the import of the 16 January 2003 Resolution in CA-G.R. SP RULE 39
No. 62391 in light of the doctrine of immutability of judgment.
Section 28. Time and manner of, and amounts payable on, successive
The doctrine of immutability of judgment maintains that once a redemptions; notice to be given and filed.—The judgment obligor, or
judgment has attained finality, the same can no longer be changed or redemptioner, may redeem the property from the purchaser, at any
modified in any respect, either by the court that rendered it or by any time within one (1) year from the date of the registration of the
other court.46 In FGU Insurance v. Regional Trial Court,47 we explained certificate of sale, by paying the purchaser the amount of his
the full breadth of such doctrine, including the few recognized purchase, with the per centum per month interest thereon in addition,
exceptions thereto, as follows:ChanRoblesVirtualawlibrary up to the time of redemption, together with the amount of any
Under the doctrine of finality of judgment or immutability of judgment, a assessments or taxes which the purchaser may have paid thereon
decision that has acquired finality becomes immutable and unalterable, after purchase, and interest on such last named amount at the same
and may no longer be modified in any respect, even if the modification rate; and if the purchaser be also a creditor having a prior lien to that of
is meant to correct erroneous conclusions of fact and law, and whether the redemptioner, other than the judgment under which such purchase
it be made by the court that rendered it or by the Highest Court of the was made, the amount of such other lien, with interest.
land. Any act which violates this principle must immediately be struck
down. x x x. (Emphasis supplied)
The commencement of the one-year redemption period is of critical
But like any other rule, it has exceptions, namely: (1) the correction of
importance, not only to the judgment debtor or a redemptioner, but
clerical errors; (2) the so-called nunc pro tune entries which cause no
even more so to the successful purchaser in the execution sale. This is
prejudice to any party; (3) void judgments; and (4) whenever
because, under the rules, it is only after the lapse of such one-year
circumstances transpire after the finality of the decision rendering its
period with no valid redemption having been effected, that a
execution unjust and inequitable.
successful purchaser acquires absolute ownership over the real
In this case, the doctrine of immutability of judgment applies to property he purchased in the execution sale and becomes entitled to a
preserve the final ruling in CA-G.R. SP No. 62391, as embodied under final deed of sale.51chanrobleslaw
16 January 2003 Resolution, from any alteration or modification. Such
resolution, as stated beforehand, had already become final and As can be gleaned above, commencement of the one-year redemption
executory as of 10 February 2003.48 As of that date, the 16 January period is reckoned from "the date of registration of the certificate of
2003 Resolution—and its holding that there was a valid levy on the sale."52 The phrase "registration of certificate of sale" means
Pequeña Island itself—was vested the quality of immutability. registration of such certificate with the RD.
The 17 September 2004 Resolution, on the other hand, is neither a The RD is the official public repository of records or instruments
clerical correction nor a nunc pro tuncorder. Neither does the said affecting lands.53 As presently constituted though, the RD maintains
57
separate registries for real properties registered under the Torrens Under the first situation, the effect of the wrong registration must be to
system and for "unregistered" real properties i.e., real properties not prevent the commencement of the redemption period altogether. In this
registered under the Torrens system.54 Each registry has its own set of case, the sheriff performs his duty correctly and the wrong registration
day book and registration book.55chanrobleslaw is actually the fault of the successful purchaser. Such type of wrong
registration is deemed non-compliant with the requirement of
Logically, and under normal circumstances, a certificate of sale ought registration under Section 28 of Rule 39 of the Rules of Court.
to be registered with the RD at the particular registry corresponding to
the status of the real property it covers. Thus, a certificate of sale A different treatment, however, is certainly warranted under the second
covering property registered under the Torrens system ought to be situation. In this case, the sheriff failed to perform his duties correctly
registered with the RD under its registry for properties registered under and such failure directly contributed to the fact of wrong registration.
the Torrens system. Likewise, a certificate of sale covering Under this situation, it is actually both unfair and inequitable to allow
property not registered under the Torrens system ought to be the judgment debtor to be benefited and for the successful purchaser
registered with the RD under its registry for unregistered real to be prejudiced.
properties.
The judgment debtor, for one, ought not to be benefited since it is in
There is no doubt that, when a certificate of sale is so registered, the the position to correct the mistake of the sheriff but it did not do so.
period of redemption would by then start to run. Hence, in this situation, the judgment debtor could be considered to be
in bad faith and a contributor to the wrong registration.
The question, however, is what would be the effect of a "wrong"
registration (i.e., the registration of a certificate of sale with the RD On the other hand, the successful purchaser ought not to be prejudiced
albeit under a registry that does not correspond to the status of the real since it only relied on the representations of the sheriff who, as a public
property it covers) upon the commencement of the period of officer, may be presumed to have performed his duties
redemption in execution sales? regularly.61chanrobleslaw
Effect of Wrong Registration; The Two Situations Thus, for the sake of fairness and equality, a wrong registration
committed under the second situation should be considered
We must qualify our answer. substantially compliant with the requirement of registration under
Section 28 of Rule 39 of the Rules of Court and is, therefore, sufficient
To answer the question before us, we must first familiarize ourselves to commence the redemption period.
with the process of levy prior to an execution sale. Our familiarization
with such process will, in turn, enable us to identify the two (2) general Application
situations that can ultimately lead to wrong registrations. It is between
such situations that our qualification lies. In the case at bench, the wrong registration was committed under the
second situation. Hence, the wrong registration in this case is
It is basic that before any property is sold in execution, and a certificate considered to be substantially compliant with the requirement of
of sale issued therefor, such property must first be the subject of a registration under Section 28 of Rule 39 of the Rules of Court and
levy.56 A levy on execution refers to the essential act by which a sufficient to commence the redemption period.
property of the judgment debtor is taken into the custody of the law and
set apart for the satisfaction of the judgment debt.57 In our jurisdiction, The facts are clear that the Notice of Levy and the Notice of Sheriff's
a levy on execution" is effected by the sheriff of the court. Sale prepared by Sheriff Montes incorrectly depicted the Pequeña
Island as unregistered property; both having only identified the said
When the property sought to be levied is realty, the sheriff must first island via Tax Declaration No. 007-0001 with Property Index No. 016-
prepare a Notice of Levy that contains, among others, an adequate 13-007-01-001.62 On the other hand, it is also crystal that Pamana—
description of the real property sought to be who admitted to owning the Pequeña Island and was furnished with the
levied.58Significantly, the notice of levy is also required to ascertain said notices—knowingly allowed the incorrect depiction of the status of
whether the particular realty sought to be levied is registered the island to prevail by doing nothing to correct it. The incorrect
under the Torrens system or not, such that if it is, the notice must depiction of Sheriff Montes, coupled by the bad faith of Pamana, were
contain "a reference to the number of the certificate of title, the thus joint contributors to the registration of the ensuing certificate sale
volume and page in the registration book where the certificate is covering the Pequeña Island under the wrong registry in the RD. Verily,
registered, and the registered owner or owners all points of the second situation are present in this case.
thereof."59chanrobleslaw
Since the wrong registration in this case was committed under the
To actually effect the levy upon a real property, however, the sheriff is second situation, the same is considered to be substantially compliant
required to do two (2) specific things: (1) file with the RD a copy of the with the requirement of registration.under Section 28 of Rule 39 of the
Notice of Levy, and (2) leave with the occupant of the property a copy Rules of Court and sufficient to commence the redemption period.
of the same notice.60chanrobleslaw These, in turn, produce the following specific effects:
Verily, since it is the duty of the sheriff preparing the Notice of Levy to
1. The redemption period of Pamana is deemed to have begun
ascertain whether the particular realty sought to be levied is registered
on 28 March 2001, i.e., the date when the Sheriff's
under Torrens system or not, then there can be two (2) possible
Certificate of Sale covering the Pequeña Island was
situations that can lead to a wrong registration:
registered with the RD under the Registry of Unregistered
Properties;
chanRoblesvirtualLawlibraryFirst. The sheriff who prepared the Notice
of Levy correctly ascertained the status of the real property (i.e.,
whether the same is registered under the Torrens system or not) but 2. The redemption period of Pamana is slated to end exactly
the ensuing certificate of sale issued during the execution sale was still one year from 28 March 2001;
registered under the wrong registry of the RD.
3. Since Pamana never exercised its right of redemption within
Second. The sheriff who prepared the Notice of one year from 28 March 2001, the issuance of a Sheriff's
Levy incorrectly ascertained the status of the real property leading to Final Deed of Sale63 over the Pequeña Island in favor of
the registration of the certificate of sale under the wrong registry of the Gomeco on 29 January 2003 is, therefore, valid.
RD.
As just said, it is between such situations that our qualification lies. All in all, Gomeco should now be considered the rightful absolute
owner of the Pequeña Island. The Orders dated 5 January 2005 and 3
58
March 2011 of the RTC in Civil Case No. 4349-V-94 were just correct
in recognizing such fact.
II
59