Law of the case Doctrine Definition: When a court decides upon a rule of law,

that decision should continue to govern the same issues in subsequent stages in
the same case. ... "In addition, the doctrine requires every court to follow the
decisions of courts that are higher in the judicial hierarchy."

FIRST DIVISION
G.R. No. 160758, January 15, 2014

DEVELOPMENT BANK OF THE PHILIPPINES, Petitioner, v. GUARIÑA AGRICULTURAL

AND REALTY DEVELOPMENT CORPORATION, Respondent.
DECISION
BERSAMIN, J.:

The foreclosure of a mortgage prior to the mortgagor’s default on the principal

obligation is premature, and should be undone for being void and ineffectual.
The mortgagee who has been meanwhile given possession of the mortgaged
property by virtue of a writ of possession issued to it as the purchaser at the
foreclosure sale may be required to restore the possession of the property to the
mortgagor and to pay reasonable rent for the use of the property during the
intervening period.
The Case

In this appeal, Development Bank of the Philippines (DBP) seeks the reversal of
the adverse decision promulgated on March 26, 2003 in C.A.-G.R. CV No.
59491,1 whereby the Court of Appeals (CA) upheld the judgment rendered on
January 6, 19982 by the Regional Trial Court, Branch 25, in Iloilo City (RTC)
annulling the extra-judicial foreclosure of the real estate and chattel mortgages
at the instance of DBP because the debtor-mortgagor, Guariña Agricultural and
Realty Development Corporation (Guariña Corporation), had not yet defaulted
on its obligations in favor of DBP.
Antecedents

In July 1976, Guariña Corporation applied for a loan from DBP to finance the
development of its resort complex situated in Trapiche, Oton, Iloilo. The loan, in
the amount of P3,387,000.00, was approved on August 5, 1976.3 Guariña
Corporation executed a promissory note that would be due on November 3,
1988.4 On October 5, 1976, Guariña Corporation executed a real estate
mortgage over several real properties in favor of DBP as security for the
repayment of the loan. On May 17, 1977, Guariña Corporation executed a
chattel mortgage over the personal properties existing at the resort complex
and those yet to be acquired out of the proceeds of the loan, also to secure the
performance of the obligation.5 Prior to the release of the loan, DBP required
Guariña Corporation to put up a cash equity of P1,470,951.00 for the
construction of the buildings and other improvements on the resort complex.

The loan was released in several instalments, and Guariña Corporation used the
proceeds to defray the cost of additional improvements in the resort complex. In
all, the amount released totalled P3,003,617.49, from which DBP withheld
P148,102.98 as interest.6

Guariña Corporation demanded the release of the balance of the loan, but
DBP refused. Instead, DBP directly paid some suppliers of Guariña Corporation
over the latter’s objection. DBP found upon inspection of the resort project, its
developments and improvements that Guariña Corporation had not completed
the construction works.7 In a letter dated February 27, 1978,8 and a telegram
dated June 9, 1978,9 DBP thus demanded that Guariña Corporation expedite
the completion of the project, and warned that it would initiate foreclosure
proceedings should Guariña Corporation not do so.10

Unsatisfied with the non-action and objection of Guariña Corporation, DBP

initiated extrajudicial foreclosure proceedings. A notice of foreclosure sale was
sent to Guariña Corporation. The notice was eventually published, leading the
clients and patrons of Guariña Corporation to think that its business operation
had slowed down, and that its resort had already closed.11

On January 6, 1979, Guariña Corporation sued DBP in the RTC to demand

specific performance of the latter’s obligations under the loan agreement, and
to stop the foreclosure of the mortgages (Civil Case No. 12707).12 However, DBP
moved for the dismissal of the complaint, stating that the mortgaged properties
had already been sold to satisfy the obligation of Guariña Corporation at a
public auction held on January 15, 1979 at the Costa Mario Resort Beach Resort
in Oton, Iloilo.13 Due to this, Guariña Corporation amended the complaint on
February 6, 197914 to seek the nullification of the foreclosure proceedings and
the cancellation of the certificate of sale. DBP filed its answer on December 17,
1979,15 and trial followed upon the termination of the pre-trial without any
agreement being reached by the parties.16

In the meantime, DBP applied for the issuance of a writ of possession by the RTC.
At first, the RTC denied the application but later granted it upon DBP’s motion
for reconsideration. Aggrieved, Guariña Corporation assailed the granting of the
application before the CA on certiorari (C.A.-G.R. No. 12670-SP entitled Guariña
Agricultural and Realty Development Corporation v. Development Bank of the
Philippines). After the CA dismissed the petition for certiorari, DBP sought the
implementation of the order for the issuance of the writ of possession. Over
Guariña Corporation’s opposition, the RTC issued the writ of possession on June
16, 1982.17
Judgment of the RTC

On January 6, 1998, the RTC rendered its judgment in Civil Case No. 12707,
disposing as follows:

WHEREFORE, premises considered, the court hereby resolves that the extra-
judicial sales of the mortgaged properties of the plaintiff by the Office of the
Provincial Sheriff of Iloilo on January 15, 1979 are null and void, so with the
consequent issuance of certificates of sale to the defendant of said properties,
the registration thereof with the Registry of Deeds and the issuance of the
transfer certificates of title involving the real property in its name.
It is also resolved that defendant give back to the plaintiff or its representative
the actual possession and enjoyment of all the properties foreclosed and
possessed by it. To pay the plaintiff the reasonable rental for the use of its beach
resort during the period starting from the time it (defendant) took over its
occupation and use up to the time possession is actually restored to the plaintiff.

And, on the part of the plaintiff, to pay the defendant the loan it obtained as
soon as it takes possession and management of the beach resort and resume its
business operation.
Furthermore, defendant is ordered to pay plaintiff’s attorney’s fee of P50,000.00.
So ORDERED.18
Decision of the CA

On appeal (C.A.-G.R. CV No. 59491), DBP challenged the judgment of the RTC,
and insisted that:
I

THE TRIAL COURT ERRED AND COMMITTED REVERSIBLE ERROR IN DECLARING

DBP’S FORECLOSURE OF THE MORTGAGED PROPERTIES AS INVALID AND
UNCALLED FOR.
II

THE TRIAL COURT GRIEVOUSLY ERRED IN HOLDING THE GROUNDS INVOKED BY

DBP TO JUSTIFY FORECLOSURE AS “NOT SUFFICIENT.” ON THE CONTRARY, THE
MORTGAGE WAS FORECLOSED BY EXPRESS AUTHORITY OF PARAGRAPH NO. 4 OF
THE MORTGAGE CONTRACT AND SECTION 2 OF P.D. 385 IN ADDITION TO THE
QUESTIONED PAR. NO. 26 PRINTED AT THE BACK OF THE FIRST PAGE OF THE
MORTGAGE CONRACT.
III

THE TRIAL COURT ERRED IN HOLDING THE SALES OF THE MORTGAGED PROPERTIES
TO DBP AS INVALID UNDER ARTICLES 2113 AND 2141 OF THE CIVIL CODE.
IV

THE TRIAL COURT GRAVELY ERRED AND COMMITTED [REVERSIBLE] ERROR IN

ORDERING DBP TO RETURN TO PLAINTIFF THE ACTUAL POSSESSION AND
ENJOYMENT OF ALL THE FORECLOSED PROPERTIES AND TO PAY PLAINTIFF
REASONABLE RENTAL FOR THE USE OF THE FORECLOSED BEACH RESORT.
V

THE TRIAL COURT ERRED IN AWARDING ATTORNEY’S FEES AGAINST DBP WHICH
MERELY EXERCISED ITS RIGHTS UNDER THE MORTGAGE CONTRACT.19

In its decision promulgated on March 26, 2003,20 however, the CA sustained the
RTC’s judgment but deleted the award of attorney’s fees, decreeing:

WHEREFORE, in view of the foregoing, the Decision dated January 6, 1998,

rendered by the Regional Trial Court of Iloilo City, Branch 25 in Civil Case No.
12707 for Specific Performance with Preliminary Injunction is hereby AFFIRMED
with MODIFICATION, in that the award for attorney’s fees is deleted.
SO ORDERED.21

DBP timely filed a motion for reconsideration, but the CA denied its motion on
October 9, 2003.
Hence, this appeal by DBP.
Issues
DBP submits the following issues for consideration, namely:

WHETHER OR NOT THE DECISION OF THE COURT OF APPEALS DATED MARCH 26,
2003 AND ITS RESOLUTION DATED OCTOBER 9, DENYING PETITIONER’S MOTION
FOR RECONSIDERATION WERE ISSUED IN ACCORDANCE WITH LAW, PREVAILING
JURISPRUDENTIAL DECISION AND SUPPORTED BY EVIDENCE;

WHETHER OR NOT THE HONORABLE COURT OF APPEALS ADHERED TO THE USUAL

COURSE OF JUDICIAL PROCEEDINGS IN DECIDING C.A.-G.R. CV NO. 59491 AND
THEREFORE IN ACCORDANCE WITH THE “LAW OF THE CASE DOCTRINE.”22
Ruling
The appeal lacks merit.
1.

Findings of the CA were supported by the evidence as well as by law and

jurisprudence

DBP submits that the loan had been granted under its supervised credit
financing scheme for the development of a beach resort, and the releases of
the proceeds would be subject to conditions that included the verification of
the progress of works in the project to forestall diversion of the loan proceeds;
and that under Stipulation No. 26 of the mortgage contract, further loan
releases would be terminated and the account would be considered due and
demandable in the event of a deviation from the purpose of the
loan,23 including the failure to put up the required equity and the diversion of
the loan proceeds to other purposes.24 It assails the declaration by the CA that
Guariña Corporation had not yet been in default in its obligations despite
violations of the terms of the mortgage contract securing the promissory note.

Guariña Corporation counters that it did not violate the terms of the promissory
note and the mortgage contracts because DBP had fully collected the interest
notwithstanding that the principal obligation did not yet fall due and become
demandable.25
The submissions of DBP lack merit and substance.

The agreement between DBP and Guariña Corporation was a loan. Under the
law, a loan requires the delivery of money or any other consumable object by
one party to another who acquires ownership thereof, on the condition that the
same amount or quality shall be paid.26 Loan is a reciprocal obligation, as it
arises from the same cause where one party is the creditor, and the other the
debtor.27 The obligation of one party in a reciprocal obligation is dependent
upon the obligation of the other, and the performance should ideally be
simultaneous. This means that in a loan, the creditor should release the full loan
amount and the debtor repays it when it becomes due and demandable.28
In its assailed decision, the CA found and held thusly:
xxxx

x x x It is undisputed that appellee obtained a loan from appellant, and as

security, executed real estate and chattel mortgages. However, it was never
established that appellee was already in default. Appellant, in a telegram to the
appellee reminded the latter to make good on its construction works, otherwise,
it would foreclose the mortgage it executed. It did not mention that appellee
was already in default. The records show that appellant did not make any
demand for payment of the promissory note. It appears that the basis of the
foreclosure was not a default on the loan but appellee’s failure to complete the
project in accordance with appellant’s standards. In fact, appellant refused to
release the remaining balance of the approved loan after it found that the
improvements introduced by appellee were below appellant’s expectations.

The loan agreement between the parties is a reciprocal obligation. Appellant in

the instant case bound itself to grant appellee the loan amount of P3,387,000.00
condition on appellee’s payment of the amount when it falls due. Furthermore,
the loan was evidenced by the promissory note which was secured by real
estate mortgage over several properties and additional chattel mortgage.
Reciprocal obligations are those which arise from the same cause, and in which
each party is a debtor and a creditor of the other, such that the obligation of
one is dependent upon the obligation of the other (Areola vs. Court of Appeals,
236 SCRA 643). They are to be performed simultaneously such that the
performance of one is conditioned upon the simultaneous fulfilment of the other
(Jaime Ong vs. Court of Appeals, 310 SCRA 1). The promise of appellee to pay
the loan upon due date as well as to execute sufficient security for said loan by
way of mortgage gave rise to a reciprocal obligation on the part of appellant
to release the entire approved loan amount. Thus, appellees are entitled to
receive the total loan amount as agreed upon and not an incomplete amount.

The appellant did not release the total amount of the approved loan. Appellant
therefore could not have made a demand for payment of the loan since it had
yet to fulfil its own obligation. Moreover, the fact that appellee was not yet in
default rendered the foreclosure proceedings premature and improper.

The properties which stood as security for the loan were foreclosed without any
demand having been made on the principal obligation. For an obligation to
become due, there must generally be a demand. Default generally begins from
the moment the creditor demands the performance of the obligation. Without
such demand, judicial or extrajudicial, the effects of default will not arise
(Namarco vs. Federation of United Namarco Distributors, Inc., 49 SCRA 238; Borje
vs. CFI of Misamis Occidental, 88 SCRA 576).
xxxx

Appellant also admitted in its brief that it indeed failed to release the full amount
of the approved loan. As a consequence, the real estate mortgage of appellee
becomes unenforceable, as it cannot be entirely foreclosed to satisfy
appellee’s total debt to appellant (Central Bank of the Philippines vs. Court of
Appeals, 139 SCRA 46).

Since the foreclosure proceedings were premature and unenforceable, it only

follows that appellee is still entitled to possession of the foreclosed properties.
However, appellant took possession of the same by virtue of a writ of possession
issued in its favor during the pendency of the case. Thus, the trial court correctly
ruled when it ordered appellant to return actual possession of the subject
properties to appellee or its representative and to pay appellee reasonable
rents.

However, the award for attorney’s fees is deleted. As a rule, the award of
attorney’s fees is the exception rather than the rule and counsel’s fees are not
to be awarded every time a party wins a suit. Attorney’s fees cannot be
recovered as part of damages because of the policy that no premium should
be placed on the right to litigate (Pimentel vs. Court of Appeals, et al., 307 SCRA
38).29
xxxx
We uphold the CA.

To start with, considering that the CA thereby affirmed the factual findings of the
RTC, the Court is bound to uphold such findings, for it is axiomatic that the trial
court’s factual findings as affirmed by the CA are binding on appeal due to the
Court not being a trier of facts.

Secondly, by its failure to release the proceeds of the loan in their entirety, DBP
had no right yet to exact on Guariña Corporation the latter’s compliance with
its own obligation under the loan. Indeed, if a party in a reciprocal contract like
a loan does not perform its obligation, the other party cannot be obliged to
perform what is expected of it while the other’s obligation remains unfulfilled.30 In
other words, the latter party does not incur delay.31

Still, DBP called upon Guariña Corporation to make good on the construction
works pursuant to the acceleration clause written in the mortgage contract (i.e.,
Stipulation No. 26),32 or else it would foreclose the mortgages.

DBP’s actuations were legally unfounded. It is true that loans are often secured
by a mortgage constituted on real or personal property to protect the creditor’s
interest in case of the default of the debtor. By its nature, however, a mortgage
remains an accessory contract dependent on the principal obligation,33 such
that enforcement of the mortgage contract will depend on whether or not
there has been a violation of the principal obligation. While a creditor and a
debtor could regulate the order in which they should comply with their
reciprocal obligations, it is presupposed that in a loan the lender should perform
its obligation - the release of the full loan amount - before it could demand that
the borrower repay the loaned amount. In other words, Guariña Corporation
would not incur in delay before DBP fully performed its reciprocal obligation.34

Considering that it had yet to release the entire proceeds of the loan, DBP could
not yet make an effective demand for payment upon Guariña Corporation to
perform its obligation under the loan. According to Development Bank of the
Philippines v. Licuanan,35 it would only be when a demand to pay had been
made and was subsequently refused that a borrower could be considered in
default, and the lender could obtain the right to collect the debt or to foreclose
the mortgage. Hence, Guariña Corporation would not be in default without the
demand.

Assuming that DBP could already exact from the latter its compliance with the
loan agreement, the letter dated February 27, 1978 that DBP sent would still not
be regarded as a demand to render Guariña Corporation in default under the
principal contract because DBP was only thereby requesting the latter “to put
up the deficiency in the value of improvements.”36

Under the circumstances, DBP’s foreclosure of the mortgage and the sale of the
mortgaged properties at its instance were premature, and, therefore, void and
ineffectual.37

Being a banking institution, DBP owed it to Guariña Corporation to exercise the

highest degree of diligence, as well as to observe the high standards of integrity
and performance in all its transactions because its business was imbued with
public interest.38 The high standards were also necessary to ensure public
confidence in the banking system, for, according to Philippine National Bank v.
Pike:39 “The stability of banks largely depends on the confidence of the people
in the honesty and efficiency of banks.” Thus, DBP had to act with great care in
applying the stipulations of its agreement with Guariña Corporation, lest it
erodes such public confidence. Yet, DBP failed in its duty to exercise the highest
degree of diligence by prematurely foreclosing the mortgages and
unwarrantedly causing the foreclosure sale of the mortgaged properties despite
Guariña Corporation not being yet in default. DBP wrongly relied on Stipulation
No. 26 as its basis to accelerate the obligation of Guariña Corporation, for the
stipulation was relevant to an Omnibus Agricultural Loan, to Guariña
Corporation’s loan which was intended for a project other than agricultural in
nature.

Even so, Guariña Corporation did not elevate the actionability of DBP’s
negligence to the CA, and did not also appeal the CA’s deletion of the award
of attorney’s fees allowed by the RTC. With the decision of the CA consequently
becoming final and immutable as to Guariña Corporation, we will not delve any
further on DBP’s actionable actuations.
2.
The doctrine of law of the case did not apply herein

DBP insists that the decision of the CA in C.A.-G.R. No. 12670-SP already
constituted the law of the case. Hence, the CA could not decide the appeal in
C.A.-G.R. CV No. 59491 differently.

Guariña Corporation counters that the ruling in C.A.-G.R. No. 12670-SP did not
constitute the law of the case because C.A.-G.R. No. 12670-SP concerned the
issue of possession by DBP as the winning bidder in the foreclosure sale, and had
no bearing whatsoever to the legal issues presented in C.A.-G.R. CV No. 59491.

Law of the case has been defined as the opinion delivered on a former appeal,
and means, more specifically, that whatever is once irrevocably established as
the controlling legal rule of decision between the same parties in the same case
continues to be the law of the case, whether correct on general principles or
not, so long as the facts on which such decision was predicated continue to be
the facts of the case before the court.40

The concept of law of the case is well explained in Mangold v. Bacon,41 an

American case, thusly:

The general rule, nakedly and boldly put, is that legal conclusions announced
on a first appeal, whether on the general law or the law as applied to the
concrete facts, not only prescribe the duty and limit the power of the trial court
to strict obedience and conformity thereto, but they become and remain the
law of the case in all other steps below or above on subsequent appeal. The
rule is grounded on convenience, experience, and reason. Without the rule
there would be no end to criticism, reagitation, reexamination, and
reformulation. In short, there would be endless litigation. It would be intolerable if
parties litigants were allowed to speculate on changes in the personnel of a
court, or on the chance of our rewriting propositions once gravely ruled on
solemn argument and handed down as the law of a given case. An itch to
reopen questions foreclosed on a first appeal would result in the foolishness of
the inquisitive youth who pulled up his corn to see how it grew. Courts are
allowed, if they so choose, to act like ordinary sensible persons. The
administration of justice is a practical affair. The rule is a practical and a good
one of frequent and beneficial use.

The doctrine of law of the case simply means, therefore, that when an appellate
court has once declared the law in a case, its declaration continues to be the
law of that case even on a subsequent appeal, notwithstanding that the rule
thus laid down may have been reversed in other cases.42 For practical
considerations, indeed, once the appellate court has issued a pronouncement
on a point that was presented to it with full opportunity to be heard having
been accorded to the parties, the pronouncement should be regarded as the
law of the case and should not be reopened on remand of the case to
determine other issues of the case, like damages.43 But the law of the case, as
the name implies, concerns only legal questions or issues thereby adjudicated in
the former appeal.

The foregoing understanding of the concept of the law of the case exposes
DBP’s insistence to be unwarranted.

To start with, the ex parte proceeding on DBP’s application for the issuance of
the writ of possession was entirely independent from the judicial demand for
specific performance herein. In fact, C.A.-G.R. No. 12670-SP, being the
interlocutory appeal concerning the issuance of the writ of possession while the
main case was pending, was not at all intertwined with any legal issue properly
raised and litigated in C.A.-G.R. CV No. 59491, which was the appeal to
determine whether or not DBP’s foreclosure was valid and effectual. And,
secondly, the ruling in C.A.-G.R. No. 12670-SP did not settle any question of law
involved herein because this case for specific performance was not a
continuation of C.A.-G.R. No. 12670-SP (which was limited to the propriety of the
issuance of the writ of possession in favor of DBP), and vice versa.
3.
Guariña Corporation is legally entitled to the restoration of the possession of the
resort complex and payment of reasonable rentals by DBP

Having found and pronounced that the extrajudicial foreclosure by DBP was
premature, and that the ensuing foreclosure sale was void and ineffectual, the
Court affirms the order for the restoration of possession to Guariña Corporation
and the payment of reasonable rentals for the use of the resort. The CA properly
held that the premature and invalid foreclosure had unjustly dispossessed
Guariña Corporation of its properties. Consequently, the restoration of
possession and the payment of reasonable rentals were in accordance with
Article 561 of the Civil Code, which expressly states that one who recovers,
according to law, possession unjustly lost shall be deemed for all purposes which
may redound to his benefit to have enjoyed it without interruption.

WHEREFORE, the Court AFFIRMS the decision promulgated on March 26, 2003;
and ORDERS the petitioner to pay the costs of suit.
SO ORDERED.
Sereno, C.J., Leonardo-De Castro, Villarama, Jr., and Reyes, JJ., concur.
G.R. No. L-37312 July 15, 1975

MARCOS B. COMILANG, petitioner,

vs.
THE HONORABLE COURT OF APPEALS (Fifth Division), ABDON DELENELA,
GUILLERMO PEREZ, DOMINGA COMILANG and ESTEBAN
COMILANG, respondents.
Bienvenido L. Garcia for petitioner.
Daniel Zarate and Associates for private respondents.

ANTONIO, J.:

Petition for review by way of certiorari of the decision of the Court of Appeals,
promulgated on June 20, 1973.

In the aforesaid decision, the Court of Appeals set aside the decision of the
lower court in Civil Case No. 848 (Marcos Comilang vs. Abdon Delenela, et al.)
for partition on the ground that "the decision of the Supreme Court in the case
of Marcos Comilang vs. Generoso A. Buendia, et al., G. R. No. L-24757,
promulgated on October 25, 1967, constitutes res adjudicata insofar as the
present case is concerned ..." Respondent Court of Appeals made the
observation that the lower court in its decision also totally ignored the decision
of the Supreme Court in the case of Maxima Nieto de Comilang vs. Abdon
Delenela, et al.1 which was reiterated and re-affirmed in the later case. It said:

... the Supreme Court has finally settled the issue in that the appellants Delenela
and Perez are the absolute owners of the surface ground of the property in
question.

The Supreme Court is the final arbiter of all legal questions properly brought
before it, and its decision in any given case constitutes the law of that particular
case. (Kabigting vs. Acting Director of Prisons, L-15548, October 30, 1962, 6 SCRA
281; Macasantos vs. Guinoo, L-19973, April 30, 1965, 13 SCRA 685; People vs.
Olarte, L-22455, Feb. 28, 1967, 19 SCRA 494).1äwphï1.ñët "Once the judgment of
the Supreme Court has become final, it is binding on all inferior courts, and
hence, beyond their power and authority to alter or modify it."(Macasantos vs.
Fernan, L-13726, May 31, 1961, 2 SCRA 277; Kabigting vs. Acting Director of
Prisons, Oct. 30, 1962, 7 SCRA 281; Joeson vs. Glorioso, L-22686, Jan. 30, 1968, 22
SCRA 316).
The antecedent facts prior to this appeal are as follows:

About the year 1908, Nicolas Comilang staked a mining claim known as the
"Bua Fraction Mineral Claim" over a parcel of land in Tuding, Benguet, Mountain
Province, with an area of 76,809 square meters, more or less. His exploration
works in the mining claim did not last for long, for he abandoned it, and stopped
the exploration, but he continued to live in the house he built on a portion of the
land with his wife, brothers and sisters.

In the year 1918, Macario Comilang also settled on a portion of the land with an
area of about one (1) hectare, for residential and agricultural purposes. After his
death, his daughter, Fabiana Comilang Perez remained to live in the house built
by her father on the land. Still later, other relatives of the old Nicolas Comilang
settled and built their own houses over other portions of the land, one of which
houses was acquired by Abdon Delenela who now resides on the land with the
other Comilang heirs.

Surface rights over the area embraced in the original Bua Fraction Mineral Claim
of Nicolas Comilang soon became the subject of litigation in the Court of First
Instance of Baguio City (Civil Case No. 250 — Action to Quiet Title), instituted by
the heirs of Guillerma, Marcelina, Julian, Timoteo, Melecio and Macario, all
surnamed Comilang, against appellant herein Marcos Comilang who claimed
to have bought the rights and interest of Nicolas Comilang in the old mining
claim. In a decision rendered in said case No. 250, dated November 26, 1952,
the court dismissed both claims of ownership of the plaintiffs and the defendant
and declared the area public land. The court, however, recognized the
possession of the parties over certain specified portions of the area, among
which was an area of about one and one-half (1-½) hectares in possession of
Marcos Comilang, which has been declared for taxation purposes in his name.
This decision was affirmed by the Court of Appeals in CA-G.R. No. 11157-R on
October 29, 1955.

In the same year, the 1-½ hectares of land occupied by Marcos Comilang, then
declared under Tax Declaration No. 4771 in his name, was levied upon and sold
at public auction by the sheriff of Mountain Province to satisfy a judgment for a
sum of money obtained by the spouses Jose Coloma and Eugenia Rumbaoa
against Marcos Comilang in the Court of First Instance of Baguio, in Civil Case
No. 1433. The judgment creditors were the purchasers at the auction sale, and a
certificate of sale was executed in their favor by the sheriff on June 1, 1957.

In the meantime, an application for lode patent coveting the Bua Fraction
Mineral Claim was filed with the Bureau of Mines. Abdon Delencla and his co-
heirs filed their opposition to the application. Pending the controversy before the
Bureau of Mines, Deleneta and his co-heirs instituted an action for determination
of their rights on the land in the Court of First Instance of Baguio City, docketed
as Civil Case No. 735. The parties submitted an amicable settlement recognizing
co-ownership among themselves of the Bua Mineral Claim. In a decision
rendered in said Case NO. 735, dated March 3, I958, the court awarded one-
half in undivided share in the mineral claim in favor of Marcos Comilang, and
the other half also in undivided share in favor of Abdon Delenela and co-heirs.

Later, in the exercise of their right as co-owners, Abdon Delenela and Guillermo
Perez, with the knowledge and conformity of Marcos Comilang, redeemed and
bought from the Coloma spouses, the latter's rights, title, interest and claim to
the 1-½ hectares of land acquired under the certificate of sale thereof
executed in the latter's favor by the sheriff on June 1, 1957. This redemption sale
took place on June 11, 1958.

On February 9, 1959, the Director of Mines recommended the issuance of a lode

patent over the Bua Mineral Claim in favor of Marcos Comilang, Delenela, and
the other claimants in the proportion of one-half (½)in undivided share in favor
of Marcos Comilang, and the other one-half (½) also in undivided share in favor
of Delenela and the other heirs pursuant to the decision of March 3, 1958,
aforementioned, in Civil Case No. 735.

On August 12, 1959, upon motion of Abdon Delenela and Perez, who have thus
acquired and succeeded to the rights of the Coloma spouses on the 1-½
hectares, the Municipal Court of Baguio City issued a writ of possession in their
favor directing the sheriff of Mountain Province to evict Marcos Comilang and
his wife from the 1-½ hectares of land sold in the execution sale.2

As an aftermath of the foregoing events, three (3) cases were brought on

appeal to this Court. The first case was the appeal of Maxima Nieto de
Comilang, wife of Marcos Comilang, from the decision of the Court of First
Instance of Baguio City in Civil Case No. 897, directing the Sheriff to place
Guillermo Perez and Abdon Delenela in possession of the 1-½ hectares of land
sold in the Sheriff's execution sale. The second is the appeal of Marcos Comilang
from the Order of the Court of First Instance of Baguio City in Civil Case No. 1440,
denying the petition of Marcos Comilang to annul the Order of the Municipal
Court of Baguio City in Civil Case No. 1433, dated August 11, 1967, directing the
Sheriff to place Abdon Delenela and Guillermo Perez in possession of the
aforestated 1-½ hectares of land. The third is the case at bar.

In the first case, this Court had occasion to pass upon the question of whether or
not the sale on execution of residential land containing an area of 1-½ hectares
to the spouses Jose Coloma and Eugenia Rumbaoa and which was redeemed
and bought from said spouses by Abdon Delenela and Guillermo Perez, with the
conformity of the judgment debtor Marcos Comilang, included the mineral
claim under it. Resolving this issue in the negative, this Court stated:

We find the above ruling objectionable on two grounds: (1) that the certificate
of sale on execution, as well as the order of the court for a writ of possession,
expressly included a residential land alone and not the mineral claim known as
the Bua Mineral Claim of nine hectares covered in part by the 1-½ hectares
residential lot; and (2) there is no express or implied taking away of the said
mineral rights or the mineral claim by virtue of the execution, nor is there any
express act of Marcos Comilang supposedly consenting to the redemption by
Delenela and Perez of the ownership of the mineral claim.

... the only property actually sold at public auction ... is the residential land
containing an area of 1-½ hectares, together with the improvements existing
thereon, without including the Bua Mineral Claim or the undivided one-half right
thereto of Marcos Comilang ....
xxx xxx xxx

Aside from the fact that the mineral claim was not sold in execution, the
provisions of the Mining Law expressly declare that the ownership of land for
other purposes does not include the minerals, and that mineral rights are not
included in agricultural land patents.3

This Court, however, affirmed the Order of the Baguio Court in so far as it
sanctioned the ownership and possession of Guillermo Perez and Abdon
Delenela over the 1-½ hectare residential lot.
In the subsequent case of Comilang v. Buendia, et. al.,4 the same question in
relation to the identical 1-½-hectare parcel of residential land subject matter of
the earlier case was raised by Marcos Comilang. He claimed that the issuance
of the mineral lode patent covering the mineral claim over the land which
included the said 1-½ hectares, conveyed full ownership, not only of the mineral
rights, but also of title over the surface of the ground. He insisted that there
could be no severance of the surface rights over a mineral claim located under
the Philippine Bill of 1902, and, therefore, the Sheriff could not have validly sold
the surface rights in the execution sale of June 1,1957. He therefore challenged
the final certificate of sale conveying the 1-½-hectare portion of Abdon
Delenela and Guillermo Perez as an invalid disposition thereof. In its decision
dated October 25, 1967, this Court, reiterating its earlier ruling, made the
following observations:

... The validity of that sale was questioned when the Municipal Court ordered
the eviction of appellant from the land sold on execution, and the Supreme
Court declared in L-18897 that the sale was valid. The sale operated to divest
appellant of his rights to the land which vested in the purchasers at the auction
sale. The parties herein subsequently litigated their rights to the mineral claim in
Civil Case No. 735 of the Court of First Instance of Baguio City, and on the basis
of their amicable agreement (appellant was a party in the case), the court
declared the Bua Mineral Claim co-ownership property of the parties thereto
"except the improvements existing thereon" (p. 9, appellant's petition). There is
no room for doubt, therefore, that the right to possess or own the surface ground
is separate and distinct from the mineral rights over the same land. And when
the application for lode patent was prosecuted in the Bureau of Mines, the said
application could not have legally included the surface ground sold to another
execution sale. Consequently, We have to declare that the patent procured
thereunder, at least with respect to the 1-½ hectares sold in execution, pertains
only to the mineral right and does not include the surface ground of the land in
question. (pp. 493-494.) .

On December 15, 1968, the Court of First Instance of Baguio City and Benguet,
presided over by Judge Pio R. Marcos, rendered a decision in Civil Case No. 848,
an action for partition brought by Marcos Comilang against Abdon Delenela,
Guillermo Perez, Dominga Comilang and Esteban Comilang, co-owners, of the
mineral claims known as the Bua Fraction Lode Mineral Claim, the identical
mineral claim involved in the two Supreme Court decisions abovementioned.
Contrary to the rulings enunciated by the Supreme Court in the two
aforementioned cases, said court declared in part:

The defendants claim that the partition of the Bua Fraction Mineral Claim should
be limited only to the mineral rights and does not include the surface rights
which belongs to them exclusively by virtue of the sale by the Colomas to them.
Plaintiffs, however, maintain that the issuance of Lode Patent No. V-24 and the
corresponding Original Certificate of Title No. P-404 of the Bua Fraction Mineral
Claim in favor of plaintiff and defendants, include not only the minerals but also
the surface.

There is merit in the claim of plaintiffs in this case. Under the provisions of the Old
Mining Law, (Act No. 624 of the Philippine Commission), under which the Bua
Fraction was perfected, the locator is the owner, not only of the minerals but
also all the surface ground. The Bua Fraction Lode Claim is covered by Original
Certificate of Title No. P-404 and any claim adverse or otherwise not annotated
in the said title is not recognized. The claim of defendants that they purchased
the surface rights of Marcos Comilang is erroneous as said claim does not
appear in the certificate of title. The alleged acquisition of the surface rights by
defendants was on June 11, 1958, and the issuance of the patent of the Bua
Lode Mineral was on November 7, 1966, yet defendants failed to file their claim
with the Director of Mines or with the Mining Recorder of Baguio. They could not
claim that they were not aware of the pendency of the application for the
patent of said mineral claim as they even filed their opposition. Therefore, they
are forever barred for their failure to file said claim by virtue of the provisions of
the same mining laws and regulations..

The Court of First Instance, disregarding completely defendants Abdon

Delenela, et al's claim for surface rights over the oft-mentioned 1-½ hectares,
accordingly ordered the partition of the Bua Fraction Lode Mineral Claim
among the plaintiff Marcos Comilang and defendants in the proportion agreed
upon by them, namely, ½ to the plaintiff and ½ to the defendants. On January
17, 1969, defendants filed a motion for reconsideration alleging that the
decision ordering partition was in contravention of the ruling laid down by the
Supreme Court in the case of Comilang v. Buendia, et al., supra, but said motion
was denied on March 11, 1969. A petition for relief from judgment was likewise
denied on September 8, 1969.

On October 6, 1969, defendants appealed to the Court of Appeals from the

final decision dated December 15, 1968 and the Order dated September 8,
1969, denying their petition for relief from judgment. It is the decision of the Court
of Appeals herein that is the subject of the present petition for review
by certiorari.

The ultimate issue before this Court is whether or not the Court of First Instance of
Baguio City and Benguet in Civil Case No. 848 had the authority to adjudicate
to the petitioner one half (½) of the ground surface of the Bua Mineral Claim,
notwithstanding the final judgment in the previous cases recognizing the
absolute ownership over the one and one-half (1-½) hectares of the surface
rights of Abdon Delenela and his co-heirs.

There is no question that in the aforecited cases, We have held that the public
auction sale of 1-½ hectares of the surface of the Bua Fraction Mineral Claim to
the Coloma spouses and which was in turn acquired by Abdon Delenela and his
co-heirs, operated to divest petitioner Marcos Comilang of his rights thereon. We
likewise declared that such surface rights are severable from the mineral rights
so that ownership over each of them may be lodged in two different persons.
Consequently, the grant of the lode patent in favor of Marcos Comilang, Abdon
Delenela and his co-heirs could not have legally included the one and one-half
(1-½) hectares of the ground surface subject of the auction sale. Having thus
resolved the question of ownership over the 1-½ hectares residential land (one
of the issues raised in Civil Case No. 848 for partition of mineral rights in the two
cases abovementioned), it cannot again be relitigated by the same parties in
the subsequent action for partition.
The fundamental principle upon which the doctrine of res judicata rests is that
parties ought not to be permitted to litigate the same issue more than once;
that, when a right or fact has been juridically tried and determined by a court of
competent jurisdiction, or an opportunity for such trial has been given, the
judgment of the court, so long as it remains unreversed, should be conclusive
upon the parties and those in privity with them in law or estate....5

It is important to note that the parties in the two cases (De Comilang v.
Delenela, et al. and Comilang v. Buendia, et al., supra) decided by this Court
such as Marcos Comilang, Abdon Delenela and Guillermo Perez, are the same
ones involved in the action for partition. It is true that the land involved in the
action for partition covers a wider area because the Bua Fraction Lode Mineral
Claim involves an area of 6.5765 hectares, whereas the area subject of previous
litigation was only 1-½ hectares. However, this does not preclude the
application of the principle of res judicata. Where it is shown that there is the
same identity of the parties in both cases and that the land involved in the first
case is included in the bigger land which is the subject matter of the second
case, and the plaintiff's right to contest defendant's title or interest to the land
involved in the first case had already been in issue and adversely decided in
that case, the principle of res judicata applies.6

A judgment upon the merits bars a subsequent suit upon the same cause,
brought in a different form of action and a party, therefore, cannot by varying
the form of action or adopting a different method of presenting his case escape
the operation of the principle that one and the same cause of action shall not
be twice litigated.7

This principle of res judicata is embodied in Rule 39, Sec. 49[b] and [c] of the
Rules of Court, as follows:

(b) In other cases the judgment or order is, with respect to the matter directly
adjudged or as to any other matter that 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 proceeding,
litigating for the same thing and for the same title and in the same capacity.

(c) In any other litigation between the same parties or their successors in interest,
that only is deemed to have been adjudged in a former judgment which
appears upon its face to have been so adjudged, or which was actually and
necessarily included therein or necessary thereto:

Sec. 49[b] enunciates that concept of res judicata known as "bar by prior
judgment" while Sec. 49[c] refers to "conclusiveness of judgment". There is "bar
by prior judgment" when, between the first case where the judgment was
rendered and the second case which is sought to be barred, there is identity of
parties, subject matter and cause of action. The judgment in the first case
constitutes an absolute bar to the subsequent action. It is final as to the claim or
demand in controversy, including the parties and those in privity with them, not
only as to every matter which was offered and received to sustain or defeat the
claim or demand, but as to any other admissible matter which might have been
offered for that purpose and of all matters that could have been adjudged in
that case. But where between the first and second cases, there is identity of
parties but no identity of cause of action, the first judgment is conclusive in the
second case, only as to those matters actually and directly controverted and
determined and not as to matters merely involved therein.8

There is evidently identity of parties and subject matter between the two
aforecited cases and the case at bar. Since, in the ultimate analysis, what was
involved in the two previous cases was the right of ownership over the ground
surface of the mining claim consisting of 1-½ hectares acquired by Abdon
Delenela, et al. in the Sheriff's sale, there is identity of cause of action of those
two cases with the case at bar, which involves specifically the right of ownership
over the ground surface of the Bua Fraction Lode Mineral Claim. Even if there is
no identity of cause of action, provided there is identity of parties and subject
matter, the doctrine of res judicata in its second form, namely "conclusiveness of
judgment" would be applicable. 9 Having definitely resolved in the two
aforecited cases that the ownership over the 1-½ hectares of surface rights were
vested in Delenela and Perez, such holding is conclusive upon the parties in this
case, and, therefore, that question can no longer be relitigated between
them. 10

Further distinction between the concepts of res judicata and "law of the case"
may be made, thus:

... "The doctrine of law of the case" is akin to that of former adjudication, but is
more limited in its application. It relates entirely to questions of law, and is
confined in its operation to subsequent proceedings in the same case. The
doctrine of res judicata differs therefrom in that it is applicable to the conclusive
determination of issues of fact, although it may include questions of law, and
although it may apply to collateral proceedings in the same action or general
proceeding, it is generally concerned with the effect of an adjudication in a
wholly independent proceeding. (30 Am. Jur. 913-914.)

The Court of First Instance, therefore, had neither power nor authority to
adjudicate anew the rights of ownership of the parties over the ground surface
to the extent of 1-½ hectares of the Bua Fraction Lode Mineral Claim.

It is claimed by petitioner, however, that private respondents "never filed any

pleading alleging that the instant action is barred by reason of res
judicata arising from the decision rendered in G. R. No. L-24757." But said party
ignores the fact that private respondents have already interposed the defense
of res judicata when they alleged as one of their affirmative defenses in their
Supplemental Answer on September 7, 1964 that the cause of action is barred
by prior judgments by reason of the decision of the Supreme Court in Comilang
vs. Delenela, et al. in G. R. No. L-18897 promulgated on March 31, 1964, together
with the decision of the Court of Appeals in Civil Case No. 250 in the City Court
of Baguio, in Civil Case No. 1433. It must be noted that in the aforecited case of
Comilang vs. Delenela et al., this Court had occasion to pass upon the validity
of the sale on execution of the 1-½ hectares, by sustaining the rights of
ownership of Delenela and Perez therein, which rights of ownership did not
include that of the mineral claim. The case of Comilang vs. Buendia, et al.,
which was promulgated on October 25, 1967 after the offer of evidence was
made by private respondents on March 14, 1967 in Civil Case No. 848, reiterated
the ruling in the earlier case of Comilang vs. Delenela, et al. that the auction
sale operated to divest Marcos Comilang of his rights to the 1-½ hectares of
land which vested in the purchasers. Considering, however, that petitioner has
still a legal right over the mineral claim and to have his definite portion thereof
segregated, the trial court, in the case at bar, may proceed with the partition of
the mineral claim, excluding therefrom the one and one-half (1-½) hectares of
the ground surface, the ownership of which belongs exclusively to Delenela and
Perez.

WHEREFORE, finding no merit in the petition, the same is hereby denied, without
prejudice to the court a quo rendering its judgment in Civil Case No. 848 in
accordance with this opinion. Costs against petitioner.
Fernando (Chairman), Barredo, Aquino and Concepcion Jr., JJ., concur.

.
SEPARATE CONCURRING OPINION
PERLAS-BERNABE, J.:

I concur in the result, although express certain reservations on

the ponencia's application of the law of the case doctrine to reach the
intended conclusion.
I.

The facts1 are as follows: petitioner Philippine Ports Authority (PPA) accepted
bids for a ten (10)-year contract to operate as the sole cargo holder at the port
of Nasipit, Agusan del Norte. Respondent Nasipit Integrated Arrastre and
Stevedoring Services, Inc. (NIASSI) was proclaimed as the winning bidder. The
second highest bidder filed a protest against the award to NIASSI. Despite the
protest, PPA issued to NIASSI a Notice of Award, directing the latter to signify its
concurrence by signing the conforme portion. PPA received notice of NIASSI's
conformity on January 3, 2001.

The Notice of Award requires the parties to formally execute a written contract.
Instead of executing the contract, NIASSI requested PP A to issue a Hold-Over
Authority (HOA). PPA issued the HOA initially for three (3) months from August 1,
2001 or until the cargo-handling contract is awarded, whichever comes first. The
HOA was extended several times upon NIASSI's request even after the Office of
the Government Corporate Counsel issued an opinion affirming the validity of
the award in NIASSI's favor.

Barely two (2) months after the last extension of the HOA was granted, PPA sent
a letter revoking the extension. It allegedly received numerous complaints
regarding the poor quality of NIASSI's services due to inadequately maintained
equipment. Thus, PPA would take over the cargo-handling services at the port
starting on December 10, 2004.

Aggrieved, NIASSI filed a petition for mandamus2 against PP A before the

Regional Trial Court of Butuan City, Branch 3 (RTC), praying that a writ
of mandamus be issued compelling PP A to formally execute a written contract
reflecting its right to operate the port.
II.

Ancillary thereto, NIASSI's petition included an application for the issuance of a

writ of preliminary mandatory injunction (WPMI),3 seeking that the cargo-
handling operations of the said port be returned to it pending litigation of the
main case.

The RTC initially granted NIASSI's application for the issuance of a WPMI in an
Order dated March 18, 2005. However, on PPA's motion for reconsideration, it
reversed itself and dissolved the WPMI, thus reinstating PPA's cargo-handling
operations.4

The RTC's holding on this incident (i.e., the dissolution of the WPMI) was elevated
by NIASSI to the Court of Appeals (CA) on certiorari, docketed as CA-G.R. SP No.
00214. In a Decision5 dated August 8, 2006, the CA granted
the certiorari petition, finding, among others, that NIASSI had "a clear legal right
to continue its operations in the port":6
Verily, the Holdover Authority (HOA) granted by [PP A] and the series of
extensions allowing [NIASSI] to operate provisionally the arrastre service confirm
the perfection of their contract despite the delay in its consummation due to
acts attributable to [PP A]. But it cannot be gainsaid that the series of extensions
constitute partial fulfillment and execution of the contract of cargo handling
services.
xxxx

It is therefore Our submission that a perfected contract of cargo handling

services existed when [NIASSIJ won the bidding, given the Notice of Award and
conformed to the conditions set forth in the Notice of Award because the
requirements prescribed in the Notice of A ward have no bearing on the
perfection of the contract. On the contrary, it amounted to a qualified
acceptance of [NIASSI's] offer, a clear legal right to continue its operations in
the port. x x x.7 (Emphases and underscoring supplied)

Accordingly, the CA went on to discuss the grounds and requisites for the
issuance of a writ of preliminary injunction,8 and ultimately ruled that:

WHEREFORE, finding merit in the petition for certiorari, the same is GRANTED.
Accordingly, the assailed Order dated 11 April 2005 is hereby NULLIFIED and SET
ASIDE for having been issued with grave abuse of discretion amounting to lack
or in excess of jurisdiction. Consequently, the Order dated 18 March 2005
granting the Writ of Preliminary Mandatory Injunction is hereby REINSTATED.9
This Court later affirmed the CA in PP A v. NIASSI,10 docketed as G.R. No. 174136.

With the WPMI reinstated, the case was remanded to the RTC for proceedings
on the main. Instead of advancing to the pre-trial and trial stages of the
proceedings, the RTC, after the parties' filing of their respective memoranda,
dismissed the case on the ground of mootness. According to the RTC, the issue
of whether or not PPA should be directed to formally execute a 10-year cargo-
handling contract with NIASSI had been rendered moot and academic by the
CA's ruling in CA-G.R. SP No. 00214, that a contract had been perfected
between the parties. As such, there was no more need for the parties to
execute the 10-year contract.11

However, the RTC reversed itself upon reconsideration,12 and its reversal was
later upheld by the CA on appeal in CA-G.R. SP No. 04828- MIN.13 The CA held
that the HOA is a separate agreement between the parties pending the
issuance of the cargo-handling contract. Based on the language of the HOA,
the hold-over permits do not constitute partial fulfillment of the unwritten
contact. Thus, finding that NIASSI has a right to the 10-year cargo-handling
contract in view of the Notice of Award and its compliance with the necessary
requirements, PP A is bound to execute a formal contract.14 Notably, this ruling
was an adjudication by the CA on the main case, whereby it granted the main
relief prayed for by NIASSI in its mandamus petition.15 PPA now assails this CA
ruling via the present petition.
III.
The ponencia stands to reverse the CA's ruling in CA-G.R. SP No. 04828-MIN on
the following grounds:
First, the CA's findings in CA-G.R. SP No. 00214 - more particularly, that a
contract between PP A had been perfected - constitute the law of the
case between the parties, and hence, binding, thereby rendering
NIASSI's mandamus petition moot;16 and
Second, the 10-year term of the perfected contract between the parties had
already expired, leaving the RTC with nothing to enforce.17

I agree with the ponencia's reversal of the aforesaid CA ruling. However, I find it
unnecessary (and even improper) to apply the law of the case doctrine to
reach this conclusion.

As above-intimated, the CA's findings in CA-G.R. SP No. 00214 were only made
for the purpose of determining whether or not the WPMI, which the RTC
previously dissolved, should be reinstated. In particular, the CA's holding that "a
perfected contract of cargo handling services existed when [NIASSI] won the
bidding, given the Notice of Award and conformed to the conditions set forth in
the Notice of Award" was made relative to its conclusion that NIASSI had "a
clear legal right to continue its operations in the port." The existence of a clear
legal right is one of the requisites for the issuance of a writ of preliminary
injunction. As enumerated by the CA itself in the same ruling:

The requisites for the issuance of a writ of preliminary injunction are: (1) the
existence of a clear and unmistakable right that must be protected; and (2) an
urgent and paramount necessity for the writ to prevent serious damage. In
taking cognizance of an application for a writ of preliminary injunction, a court
has the duty to determine whether the requisites for the grant of an injunction
are present in the case before it.18

Jurisprudence provides that in a proceeding to determine whether to issue a

writ of preliminary injunction, the applicant must show that it has a clear legal
right to be protected and that the other party's act against which the writ is to
be directed violates that right.19 The Court, however, clarified that although a
clear right is necessary, its existence need not be conclusively established.20 In
fact, the evidence to be submitted need not be conclusive or complete but
need only be a sampling to convince the court to issue the preliminary
injunction pending the decision on the merits of the case.21 In more explicit
terms, the applicant only needs to show that it has the ostensible right to the
final relief prayed for in the petition.22 Therefore, the issuance of a preliminary
injunction does not conclusively determine the merits of the main case or
decide controverted facts therein.23 This is because a preliminary injunction is
merely an ancillary remedy to preserve the status quo and prevent irreparable
harm until the merits of the main case resolving the rights of the parties are
heard and decided.24

Verily, it is within the foregoing legal framework that we should treat and
characterize the CA's findings in CA-G.R. SP No. 00214.

Again, the issue which the CA resolved in CA-G.R. SP No. 00214 was whether or
not the WPMI, which the R TC previously dissolved, should be reinstated. The
context, evidentiary parameters, and issue in CA-G.R. SP No. 00214 are clearly
different from those that should apply in the adjudication of the main case.
In CA-G.R. SP No. 00214, the CA only resolved an incident pertaining to the
issuance of a provisional relief, for which the parties need not submit complete
or conclusive evidence. Only a sampling of evidence is required to determine
the existence of an ostensible right to the final relief prayed for. This
determination leads the issuing court to merely enjoin/restrain a particular
conduct or preserve the status quo until the merits of the main case are fully
heard and decided.

On the other hand, the resolution of the main case requires the parties to
completely present their respective evidence during trial.1âwphi1 While
hearings were conducted in the proceedings a quo, these were only meant to
ascertain the merits of NIASSI's application for a WPMI. In the final analysis, the
CA in CA-G.R. SP No. 00214 did not determine, under the evidentiary standard
of preponderance of evidence, whether or not to grant
NIASSI's mandamus petition.

According to jurisprudence, the law of the case doctrine means that whatever
is once irrevocably established as the controlling legal rule or decision between
the same parties in the same case continues to be the law of the case, whether
correct on general principles or not, so long as the facts on which such decision
was predicated continue to be the facts of the case before the court.25 In other
words, when an appellate court passes on a question and remands the case to
the lower court for further proceedings, the question settled therein becomes
the law of the case upon subsequent appeal.26

What was irrevocably established by the CA in CA-G.R. SP No. 00214, as

affirmed by this Court in PPA v. NIASSI, is that NIASSI was entitled to the
reinstatement of the WPMI previously dissolved by the RTC. While the CA had to
pass upon the question of whether or not a perfected contract already existed
at the time of NIASSI's conformity to the Notice of Award, this sub-issue was
resolved under the framework of preliminary injunctions, and hence, cannot
bind the court in resolving the main case. Indeed, the CA's finding on the
perfection of the said contract was made only for the limited purpose of
determining whether NIASSI possessed an ostensible right to justify the
reinstatement of the writ of preliminary injunction.

The ponencia supports its application of the law of the case doctrine by
citing Timbol v. Philippine National Bank (Timbol).27 While Timbol presents a
situation similar to this case, I, however, believe that the doctrine was
misapplied. At the risk of repetition, it is my view that a court cannot take as
conclusive on the actual main case a mere incidental adjudication on a
provisional relief. As above-illustrated, the context, evidentiary parameters, and
issues involved are simply different between the two proceedings. Moreover,
from a practical standpoint, a party can shrewdly avert a full-blown trial on the
main case's merits by simply invoking the law of the case doctrine after the issue
on the propriety of an injunctive relief has been finally resolved on appeal. In this
regard, the parties would not be accorded the benefit of presenting their
complete evidence under the rigors of a civil trial, and courts would simply
shortcut the adjudication process on the basis of prima facie determinations.
Contrary to the ponencia 's assertion,28 the fact that no other proceedings were
conducted and no other evidence were presented after the Court reinstated
the WPMI does not render conclusive in the main case the
CA's primafacie factual findings in CA-G.R. SP No. 00214. I reiterate that the
context in which the CA made those factual findings differs from the context in
the main case. After the Court reinstated the WPMI, what was incumbent upon
the RTC was to receive evidence on the issue in the main case, instead of short
railing the proceedings by requiring the parties to submit their respective
memoranda anent its misplaced perception of mootness. To my mind, the RTC's
failure to follow the proper procedure (i.e., to proceed to trial) is not sufficient
reason to elevate the status of the CA's factual findings in CA-G.R. SP No. 00214
from prima facie to conclusive on the main. Instead, the proper recourse would
be to remand this case to the trial court for reception of evidence on the issue in
the main case. However, as will be explained below, NIASSI's admissions in this
case render the remand unnecessary, and thus, ultimately validates
the ponencia's reversal of the CA's ruling in CA-G.R. SP No. 04828-MIN.

In particular, although it appears that the RTC did not proceed to trial in the
main proceedings, records show that NIASSI admitted that there was already a
meeting of the minds between the parties when it signed the conforme of the
Notice of Award.29 By this admission therefore, this Court can already derive the
conclusion that the contract between the parties had already been perfected
on January 3, 2001. In fact, NIASSI also admitted that it was allowed to operate
the cargo-handling services at the port via the hold-over permits from August 1,
2001 until PP A took over the operations on December 10, 2004.30 However,
NIASSI regained control of the operations of the cargo-handling services after
the Court reinstated the WPMI.31 NIASSI did not dispute that it has been
conducting such operations since the reinstatement of the writ until the present.
Thus, these admissions - which therefore dispenses with the need for trial -
indubitably establish that the contract was not only perfected at the time of
NIASSI's conformity to the Notice of Award but also that the obligations therein
had been performed as soon as NIASSI took over the operations even without a
formal written contract.

The usual procedure under the PPA Rules32 is that the Philippine Ports Authority
will issue the Notice of Award to the winning bidder and, thereafter, the parties
will execute a cargo-handling contract to enable it to issue a Notice to
Commence cargo-handling operations. Without the Notice to Commence, the
winning bidder is prohibited from starting the cargo-handling operation.33 In the
present case, NIASSI conducted operations by virtue of the HOA and its
extensions prior to the execution of the written contract. Thus, the HOA and the
extensions took the place of the Notice to Commence while no written contract
has been executed. As the ponencia observed, NIASSI had control over the
operations of the cargo-handling services at the port for a total period of 12
years, 3 months, and 15 days, which is clearly way beyond the 10-year
period.34 Therefore, the cargo-handling contract between the parties has
already expired and now, ceases to have any force and effect. Accordingly,
the core issue in the main proceeding - whether PPA should be compelled
by mandamus to execute a contract - is already moot and academic on this
ground.
WHEREFORE, under these premises, I vote to GRANT the petition.
ESTELA M. PERLAS-BERNABE
Associate Justice
G.R. No. 163103 February 6, 2009

CHARLIE VIOS and SPS. ROGELIO and TERESITA ANTONIO, and as nominal party,
Hon. Emilio L. Leachon, Presiding Judge, RTC, Br. 224, Quezon City, Petitioners,
vs.
MANUEL PANTANGCO, JR. Respondent.
DECISION

We resolve the petition for review on certiorari1 of the Decision of October 10,
2003 of the Court of Appeals (CA)2 in Manuel Pantangco, Jr. v. Hon. Emilio L.
Leachon, Presiding Judge of Branch 224, RTC, Quezon City, Charlie Vios and Sps.
Rogelio and Teresita Antonio, docketed as CA-G.R. SP No. 47031, and the
Resolution dated April 2, 2004 that denied the motion for reconsideration of the
appealed Decision.
ANTECEDENTS
The Ejectment Case at the Metropolitan Trial Court

Respondent Manuel Pantangco, Jr. (Pantangco) filed with the Metropolitan Trial
Court (MTC), Branch 32, Quezon City a complaint for ejectment and damages
against petitioners Charlie Vios (petitioner Vios) and the Spouses Rogelio and
Teresita Antonio (Spouses Antonio) (collectively, the petitioners), docketed as
Civil Case No. 37-8529. Pantangco alleged in his complaint that: (1) he is a co-
owner – by purchase from the former owner – of a residential land located on
Sampaguita St., Barangay Pasong Tamo, Quezon City registered under TCT No.
76956; (2) prior to his purchase of the property, he inquired from the petitioners
whether they were interested in buying the property; when the petitioners
responded that they were not, he told them that he would give them one (1)
week from his purchase of the property to vacate the premises; he claimed that
the petitioners agreed; (3) after the consummation of the sale to him, the
petitioners refused to vacate notwithstanding the agreement; and (4) he filed
the complaint when no settlement was reached before the Pangkat
Tagapagkasundo.

The petitioners specifically denied in their Answer the material allegations of the
complaint and pleaded the special and affirmative defenses that: (1) the
disputed property belongs to the government since it forms part of unclassified
public forest; (2) the real previous owner of the property was Alfredo Aquino,
from whom they acquired their rights through a document entitled "Waiver"; (3)
Pantangco's title is fake as it originated from Original Certificate of Title No. 614
which was nullified in a decision in Civil Case No. 36752 rendered by Judge
Reynaldo V. Roura of the Regional Trial Court (RTC), Branch 83, Quezon City;
and (4) assuming Pantangco's title to be valid, the property it covers is different
from the premises they (the petitioners) occupy. They asked for the dismissal of
the complaint and the payment of damages by way of a counterclaim.

Petitioner Vios was represented at the MTC proceedings by his counsel of

record, Atty. Oscar D. Sollano (Atty. Sollano), while the petitioners Spouses
Antonio were represented by Atty. Manuel C. Genova (Atty. Genova).
After appropriate proceedings, the MTC rendered on July 12, 1996 a decision
(MTC decision) in Pantangco's favor, ordering the petitioners to: (1) immediately
vacate the premises; (2) remove all structures and shanties constructed thereon;
and (3) pay reasonable compensation for the use and occupancy of the
property from February 1, 1994, until they actually vacate the property. Notices
and copies of the MTC decision were transmitted on even date to the
petitioners through their counsels of record. Atty. Genova received a copy of the
decision on July 18, 1996, while Atty. Sollano received a copy on July 23, 1996.

On August 5, 1996, the Mauricio Law Office, through Atty. Melanio Mauricio, Jr.,
filed a Notice of Appearance with Urgent Motion stating that petitioner Vios
received an incomplete copy of the decision from his former counsel, Atty.
Sollano, and is, therefore, requesting the MTC to furnish petitioner Vios with a
complete copy of the MTC decision.

Pantangco, on the other hand, filed on August 12, 1996 a Motion for the
Issuance of a Writ of Execution, arguing that the decision is already final and
executory as no notice of appeal was filed within the reglementary period by
any of the petitioners. The MTC granted the motion on August 30, 1996 and the
corresponding writ was issued forthwith.

On September 9, 1996, petitioner Vios moved to quash the writ asserting that it
was null and void because the MTC decision had not become final and
executory as he had not been notified of the decision; Atty. Sollano, to whom a
copy of the MTC decision was sent, had allegedly withdrawn as his counsel
sometime in November 1995.1avvphi1.zw+

The Sheriff issued on September 11, 1996 a Notice to Vacate and Demolish the
Houses. Petitioner Vios thereupon moved to quash the writ of
execution/demolition which Pantangco opposed.

The MTC denied the motion to quash the writs of execution and demolition in its
Order dated September 23, 1996; the Sheriff thus implemented the writ of
execution by turning over possession of the disputed property to Pantangco.
The Certiorari Case at the RTC

On November 13, 1996, petitioner Vios filed with the RTC, Branch 224, Quezon
City a Petition for Certiorari and Mandamus with Prayer for a Writ of Preliminary
Mandatory Injunction, assailing both the MTC decision and the writ of execution.
Petitioner Vios assailed the MTC decision for being contrary to the evidence on
record; he attacked the propriety of the writ of execution, on the other hand, on
the ground that the MTC decision is not yet final because Atty. Sollano, to whom
a copy of the decision was sent, had previously withdrawn as petitioner Vios'
counsel. Pantangco initially filed a Motion to Dismiss the petition; via a
Manifestation, he asked that the motion to dismiss be treated as his Answer to
the petition.

On August 4, 1997, the RTC rendered a decision (RTC decision) in petitioner Vios'
favor. It annulled the MTC decision for being contrary to the evidence; it
annulled as well the related writ of execution on the reasoning that the decision
it was implementing was not yet final and executory. In
annulling the writ, the RTC said:
Since there was lack of notice to the petitioners (referring to the petitioners
here), the period for appeal has not expired and the decision has not become
final and executory which made the writ of execution subsequently issued as
null and void.3
The dispositive portion of the RTC decision reads:

Accordingly, therefore, the Court has to render judgment for the petitioners
[referring to petitioners Vios and the Spouses Antonio] as against the public and
private respondent [referring to private respondent Pantangco, Jr.] and hereby
sets aside the decision of the MTC, Branch 37, Quezon City dated July 12, 1996
and the writ of execution dated August 30, 1996.

The Court likewise orders that the petitioners be restored to their possession of
the subject premises and that all fixtures removed from the subject premises as a
result of dispossession be restored to petitioners.

The private respondent is hereby directed and ordered to exercise his options
under Article 448 of the New Civil Code, that is, either to appropriate the houses
of petitioners after payment of the proper indemnity or to require the petitioners
to pay the value of the land, except when the value of the land is greater than
the value of the building in which case to require each petitioners to pay rent
which should be P3,5000.00 per month for the use and occupancy of the land in
question effective on turn-over of the subject premises to petitioners.
IT IS SO ORDERED.

On August 18, 1997, petitioner Vios moved for the immediate execution of the
RTC decision. Pantangco, on the other hand, moved to reconsider the decision.
The RTC denied petitioner Vios' motion for execution in light of Pantangco’s
timely motion for reconsideration.

On December 2, 1997, the RTC denied Pantangco's motion for reconsideration.

Thus, petitioner Vios filed a Second Motion for Immediate Execution. This time,
the RTC granted the motion in its Order dated February 10, 1998. The writ was
not immediately implemented, leading to the issuance of an alias writ of
execution which the Sheriff this time implemented by turning possession of the
disputed property over to petitioner Vios.
At the Court of Appeals

On March 10, 1998, Pantangco filed with the CA a Petition for Declaration of
Nullity of the RTC Decision. He essentially asserted in his petition that the RTC
decision is void, given that the MTC decision cannot be assailed on certiorari;
the proper remedy is an ordinary appeal from the MTC decision. He further
argued that no remedy is available from the final and executory MTC
decision as the remedy of appeal was lost when the period to appeal expired
fifteen (15) days from receipt of petitioner's counsel of record of a copy of the
MTC decision; certiorari is not a substitute for the remedy of appeal already lost.
The RTC therefore, according to Pantangco, had no jurisdiction to hear and
decide the certiorari petition and the decision it rendered was null and void.
Pantangco additionally argued that the RTC exceeded its jurisdiction when it
applied Article 448 of the Civil Code without hearing the parties on the issue of
possession in good faith. He argued, too, that a petition for certiorari properly
covers only grave abuse of discretion amounting to lack or excess of jurisdiction,
nothing more and nothing less.

The CA rendered its assailed decision on October 10, 2003. The pertinent portion
of which reads:

Now to the issue of whether respondent Vios had been notified of the MTC
Decision, through his former counsel of record, Atty. Oscar D. Sollano. This Court
painstakingly examined the voluminous records of the case, particularly the MTC
Record, which, by mandate of this Court, was elevated for our consideration,
and found the same barren of any notice, filed by Atty. Oscar D. Sollano either
before or after the promulgation of the MTC Decision, signifying his withdrawal
as counsel for respondent Vios. Neither is there in the record any notice coming
from respondent Vios himself informing the court of the withdrawal of Atty.
Oscar D. Sollano as his counsel of record. Consequently, the MTC cannot be
faulted for furnishing a copy of its Decision to respondent Vios, through Atty.
Oscar D. Sollano.

Having been validly notified of the MTC Decision through his counsel of record,
respondent Vios had fifteen (15) days within which to appeal the aforesaid
Decision. More specifically, he had until 07 August 1997, reckoned from 23 June
1997 when Atty. Oscar D. Sollano received a copy of the MTC Decision in his
behalf, within which to interpose an appeal. Since the MTC Decision furnished to
him by Atty. Oscar D. Sollano was allegedly incomplete, private respondent
Charlie Vios filed an Urgent Motion to be furnished a complete copy of the
aforesaid Decision on 05 August 1997 [sic, should be 1996], through the Mauricio
Law Office that likewise entered its appearance his new counsel of record. The
Court, however, did not act on the motion. On the theory that its decision had
long become final and executory, it instead granted petitioner's Motion for
Execution and, forthwith, issued the writ of execution prayed for.1avvphi1

To our mind, the MTC had been rather precipitate in issuing the writ of execution
to enforce its Decision even before it could act on private respondent Charlie
Vios' motion to be furnished a copy of the Court's decision filed two (2) days
before it became final and executory. It is on this basis that we are unable to
accord the mantle of finality to the MTC Decision. To do so would deprive
respondent Vios' of his right to due process, particularly his right to be notified
fully of the MTC Decision against him and to elevate the same on appeal to a
higher court. Since, the MTC Decision has not attained finality, the writ of
execution issued pursuant thereto, is consequently, invalid and improper.
xxxx

In the instant case, it cannot be gainsaid that the RTC went beyond the ambit of
its jurisdiction when it nullified the MTC Decision in an original action for certiorari
and mandamus. While it was correct in its ruling that grave abuse of discretion
attended the issuance of the writ of execution, it went too far when it ruled on
the insufficiency of the evidence adduced by petitioner to establish his claim of
rightful possession over the subject property. Not only that. The RTC made a
determination as well on the rights of the parties to the improvements built on the
subject property under the pertinent provisions of the New Civil Code, which it is
not permitted to do in an original action for certiorari and mandamus. Not even
the assailed MTC Decision, which contains no disposition regarding the parties'
rights to the improvements but limited itself to a resolution of who between
petitioner and private respondents have a better right of possession over the
subject property, warrants such a determination. It follows, therefore, that the
RTC Decision, except in so far as it nullified the writ of execution issued by the
MTC in the ejectment proceedings, is itself null and void for lack of jurisdiction.

Finally, it must be stressed that only respondent Vios instituted the special civil
action assailing the MTC decision before the RTC. Private respondents Spouses
Gregorio [sic, should be Rogelio] and Teresita Antonio were never a party
thereto. Yet, in its Decision, the RTC found not only for respondent Vios, but as
well for Spouses Gregorio and Teresita Antonio. In fact, the RTC Decision, in its
entirety, considered respondents Spouses Antonio a party to the proceedings
before it, when actually they were not, to the manifest prejudice of petitioner, as
the Antonio's neither appealed the MTC Decision nor questioned the
corresponding writ of execution issued pursuant thereto.

The CA denied, via the Resolution also assailed in this petition, the motion for
reconsideration petitioner Vios subsequently filed.
THE PETITION
The petitioners’ lone cited error states:

The Honorable Court of Appeals committed an error in entertaining the petition

to declare the nullity of the decision of the RTC even if the available remedy was
an ordinary appeal and therefore the RTC decision which set aside the MTC
decision and restoring the petitioners to their possession of the subject premises
has attained the stage of finality.
This assigned error actually consists of two (2) component arguments, namely:

1. The petition for certiorari that petitioner Vios filed with the RTC was an original
action and the proper remedy to question the RTC’s decision is an ordinary
appeal to the CA; the CA thus erred in entertaining Pantangco's Petition for
Declaration of Nullity of the RTC Decision.

2. In this light, the petitioners additionally argued that the RTC decision which
was not appealed became final; and, right or wrong; the RTC’s ruling became
the law of the case that may no longer be disturbed.
THE COURT'S RULING
We find the petition partially meritorious.

What is the proper remedy from

the decision of the RTC in a
petition for certiorari?

A petition for certiorari – the remedy that petitioner Vios availed of to question
the MTC decision before the RTC – is an original action whose resulting decision
is a final order that completely disposes of the petition. The proper remedy from
the RTC decision on the petition for certiorari that petitioner Vios filed with that
court is an ordinary appeal to the CA under Section 2, Rule 41 of the Revised
Rules of Court. Particularly instructive on this point is our ruling in Magestrado v.
People of the Philippines,4 thus:

The procedural issue herein basically hinges on the proper remedy which
petitioner should have availed himself of before the Court of Appeals: an
ordinary appeal or a petition for certiorari. Petitioner claims that he correctly
questioned RTC-Branch 83's Order of dismissal of his Petition for Certiorari in Civil
Case No. Q-99-39358 through a Petition for Certiorari before the Court of
Appeals. Private respondent and public respondent People of the Philippines
insist that an ordinary appeal was the proper remedy.

We agree with respondents. We hold that the appellate court did not err in
dismissing petitioner's Petition for Certiorari, pursuant to Rule 41, Section 2 of the
Revised Rules of Court (and not under Rule 44, Section 10, invoked by the Court
of Appeals in its Resolution dated 5 March 2001).

The correct procedural recourse for petitioner was appeal, not only because
RTC-Branch 83 did not commit any grave abuse of discretion in dismissing
petitioner's Petition for Certiorari in Civil Case No. Q-99-39358 but also because
RTC-Branch 83's Order of dismissal was a final order from which petitioners
should have appealed in accordance with Section 2, Rule 41 of the Revised
Rules of Court.

An order or a judgment is deemed final when it finally disposes of a pending

action, so that nothing more can be done with it in the trial court. In other words,
the order or judgment ends the litigation in the lower court. Au contraire, an
interlocutory order does not dispose of the case completely, but leaves
something to be done as regards the merits of the latter. RTC-Branch 83's Order
dated 14 March 2001 dismissing petitioner's Petition for Certiorari in Civil Case
No. Q-99-39358 finally disposes of the said case and RTC-Branch 83 can do
nothing more with the case.

Under Rule 41 of the Rules of Court, an appeal may be taken from a judgment
or final order that completely disposes of the case, or of a particular matter
therein when declared by the Revised Rules of Court to be appealable. The
manner of appealing an RTC judgment or final order is also provided in Rule 41
as follows:
Section 2. Modes of appeal. —

(a) Ordinary appeal. — The appeal to the Court of Appeals in cases decided by
the Regional Trial Court in the exercise of its original jurisdiction shall be taken by
filing a notice of appeal with the court which rendered the judgment or final
order appealed from and serving a copy thereof upon the adverse party. No
record on appeal shall be required except in special proceedings and other
cases of multiple or separate appeals where the law or these Rules so require. In
such cases, the record on appeal shall be filed and served in like manner.

Certiorari generally lies only when there is no appeal nor any other plain, speedy
or adequate remedy available to petitioners. Here, appeal was available. It was
adequate to deal with any question whether of fact or of law, whether of error
of jurisdiction or grave abuse of discretion or error of judgment which the trial
court might have committed. But petitioners instead filed a special civil action
for certiorari.5

As in this cited case, Pantangco did not appeal. In lieu of an appeal,

Pantangco sought to review the RTC certiorari decision through a "Petition for
Declaration of Nullity of the RTC Decision" that is apparently based on Rule 47 of
the Rules of Court.

Rule 47 is a remedy based on external fraud and lack of jurisdiction.6 The intent
to use this Rule suggests itself, not only because of the title of the petition, but
because of its substance. Among other arguments, Pantangco claimed nullity
of the RTC decision for lack of jurisdiction; only interlocutory orders of the MTC
are subject to the RTC certiorari jurisdiction; final MTC orders must be
appealed.7 He likewise stressed that the RTC has no jurisdiction to reverse the
decision of the MTC using a Rule 65 petition for certiorari because the Rule
applies only to interlocutory orders rendered with grave abuse of discretion
amounting to lack of or excess of jurisdiction.8

Pantangco’s Rule 47 remedy is fatally defective because its use against an RTC
decision in a certiorari case is foreclosed by the availability of an appeal to the
CA. Section 1 of Rule 47 provides that it covers only annulment of judgments for
which the ordinary remedies of new trial, appeal, petition for relief or other
appropriate remedies are no longer available through no fault of the
petitioner.9 Ramirez-Jongco v. Veloso III10 instructively tells us:

The remedy of annulment of judgment can […] be resorted to only where

ordinary and other appropriate remedies, including appeal, are no longer
available through no fault of the petitioner. In the case at bar, the loss of the
remedies of appeal and certiorari is attributable to the petitioners. Despite the
manifestations of their intention to file an appeal, and subsequently a petition
for certiorari, and their request for an extension of the filing period, the
petitioners never availed of these remedies. Realizing the consequence of their
negligence, the petitioners filed a petition for annulment of judgment in a last
ditch effort to reverse the decision of the regional trial court. The rules do not
sanction petitioners’ procedural lapse.

Thus, the CA erred from the very beginning in ruling on Pantangco’s petition;
Pantangco opted for a mode of review other than the appeal that the Rules of
Court require.

In light of the erroneous remedy taken from

the RTC decision, is the RTC decision now
the controlling or final determination of the
dispute between the parties?
A. Law of the Case Doctrine versus Doctrine of Finality of Judgment

We start our consideration by re-stating the petitioners’ basic position: the RTC
decision has become final because of Pantangco’s clearly erroneous remedy;
this final decision is now the law of the case between the parties.

The law of the case doctrine applies in a situation where an appellate court has
made a ruling on a question on appeal and thereafter remands the case to the
lower court for further proceedings; the question settled by the appellate court
becomes the law of the case at the lower court and in any subsequent appeal.
It means that whatever is irrevocably established as the controlling legal rule or
decision between the same parties in the same case continues to be the law of
the case, whether correct on general principles or not, so long as the facts on
which the legal rule or decision was predicated continue to be the facts of the
case before the court.11

Based on this definition, the petitioners' heavy reliance on the law of the case
doctrine is clearly misplaced. No opinion has been made in a former appeal
that can be considered the controlling legal rule or decision between the same
parties thereafter. There is no remanded case to which a previous ruling on
appeal applies.

Rather than the law of the case doctrine, the petitioners may actually be
invoking the binding effect of what they view as a final RTC decision on the
theory that the RTC decision already determined the rights of the parties with
finality and binding effect. This is the doctrine of finality of judgment or
immutability of judgment, defined and explained as follows:

It is a hornbook rule that once a judgment has become final and executory, it
may no longer be modified in any respect, even if the modification is meant to
correct an erroneous conclusion of fact or law, and regardless of whether the
modification is attempted to be made by the court rendering it or by the
highest court of the land, as what remains to be done is the purely ministerial
enforcement or execution of the judgment.

The doctrine of finality of judgment is grounded on fundamental considerations

of public policy and sound practice that at the risk of occasional errors, the
judgment of adjudicating bodies must become final and executory on some
definite date fixed by law. […], the Supreme Court reiterated that the doctrine
of immutability of final judgment is adhered to by necessity notwithstanding
occasional errors that may result thereby, since litigations must somehow come
to an end for otherwise, it would "be even more intolerable than the wrong and
injustice it is designed to correct."12

If this indeed is the legal doctrine the petitioners refer to, the question that arises
is whether the RTC decision is a ruling to which the doctrine can apply. If it is a
judgment otherwise valid even if erroneous in content, then it is a judgment that
should thereafter be followed. On the other hand, it cannot be so cited if it is an
intrinsically void judgment.
B. The status of the RTC Decision.

We cannot recognize the RTC decision as a completely valid decision; it is partly

void for lack of jurisdiction. Specifically, the RTC has no jurisdiction to review,
reverse or modify, in any manner whatsoever, the MTC's decision on the merits
of the ejectment case via a petition for certiorari filed under Rule 65; if the
petitioners wanted a review of the MTC decision, they should have instead filed
an appeal.

Certiorari is a remedy designed for the correction of errors of jurisdiction, not

errors of judgment. When a court exercises its jurisdiction, an error committed
while so engaged does not deprive it of the jurisdiction being exercised when
the error was committed. Otherwise, every error committed by a court would
deprive it of its jurisdiction and every erroneous judgment would be a void
judgment. This cannot be allowed. The administration of justice would not
survive such a rule. Consequently, an error of judgment that the court may
commit in the exercise of its jurisdiction is not correctable through the original
civil action of certiorari. The supervisory jurisdiction of a court over the issuance
of a writ of certiorari cannot be exercised for the purpose of reviewing the
intrinsic correctness of a judgment of the lower court – viz., on the basis either of
the law or the facts of the case, or of the wisdom or legal soundness of the
decision. Even if the findings of the court are incorrect, as long as it has
jurisdiction over the case, such correction is normally beyond the province
of certiorari. Where the error is not one of jurisdiction, but of an error of law or
fact – a mistake of judgment – appeal is the proper remedy.13

In the present case, the RTC – apart from nullifying the writ of execution the MTC
issued – also reversed the MTC decision on the merits for being contrary to the
evidence; at the same time, the RTC applied and determined the rights of the
parties under Article 448 of the Civil Code – an issue that the MTC never tackled.

This is the kind of review that we have consistently held to be legally improper for
being outside the RTC’s certiorari jurisdiction to undertake. Thus, the RTC decision
is partly void insofar as it modified and reversed the MTC decision on the merits.
In this light, the RTC decision cannot be fully considered a final and controlling
ruling that must govern the parties. All RTC actions anchored on its decision on
the merits, particularly its determination of the rights of the parties under Article
448 of the Civil Code, are consequently void for want of legal basis. On the
other hand, the RTC dispositions on matters within its jurisdiction or competence
to decide are valid and binding. In this case, these are the dispositions related
to the finality of the MTC decision and the writ of execution it issued.

To recapitulate, we hold that the CA erred in taking cognizance and fully ruling
on Pantangco’s Petition for Declaration of Nullity of the RTC Decision despite
Pantangco’s wrong remedy; Pantangco should have appealed and the
availability of appeal foreclosed all other review remedies. To this extent, we
grant the petition. We cannot, however, rule – as the petitioners advocate –
that the CA’s error shall result in the full enforcement of the RTC decision since
this decision itself is partly void as above discussed.

WHEREFORE, premises considered, we PARTIALLY GRANT the petition and

declare the Court of Appeals in error in ruling on the merits of respondent
Pantangco’s Rule 47 petition. We DENY the petition insofar as it asks us to
recognize the decision of the Regional Trial Court dated August 4, 1997 as fully
valid and binding; the only valid aspects we can recognize are those relating to
the lack of finality of the decision of the Municipal Trial Court dated July 12, 1996
and the invalidity of the writ of execution that the Municipal Trial Court
subsequently issued. The parties are directed to act guided by this Decision.
SO ORDERED.

ARTURO D. BRION
Associate Justice
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 169214 June 19, 2013

SPOUSES MANUEL SY and VICTORIA SY, Petitioners,

vs.
GENALYN D. YOUNG, Respondent.
DECISION
BRION, J.:

We resolve the petition for review on certiorari1 filed by petitioner-spouses

Manuel Sy and Victoria Sy to challenge the March 30, 2005 Decision2 and the
August 8, 2005 Resolution3 of the Court of Appeals (CA) in CA-G.R. CV No.
74045.
The Factual Antecedents

The petition originated from a Complaint for Nullification of Second

Supplemental Extrajudicial Settlement, Mortgage, Foreclosure Sale and Tax
Declaration4 filed by respondent Genalyn D. Young with the Regional Trial Court
of San Pablo City, Branch 32 (RTC). The complaint was docketed as Civil Case
No. SP-5703.

Genalyn alleged that she is the legitimate daughter of spouses George Young
and Lilia Dy.5 When George died, he left an unregistered parcel of land
(property) covered by Tax Declaration No. 91-489296 in San Roque, San Pablo
City, Laguna. On September 3, 1993, Lilia executed a Second Supplemental to
the Deed of Extrajudicial Partition.7 The property was adjudicated solely in Lilia’s
favor in the partition. Lilia represented Genalyn, who was then a minor, in the
execution of the document.

Subsequently, Lilia obtained a loan from the spouses Sy with the property as
security.8 When Lilia defaulted on her loan, the property was foreclosed and sold
to the spouses Sy. Thereafter, the spouses Sy registered the certificate of
sale9 with the Office of the Register of Deeds and obtained a tax
declaration10 in their name.

In her complaint, Genalyn argued that the partition was unenforceable since
she was only a minor at the time of its execution. She also pointed out that the
partition was contrary to the Rules of Court because it was without the court’s
approval. She further asserted that the spouses Sy entered into the contract of
mortgage with the knowledge that Lilia was unauthorized to mortgage the
property.

On July 20, 2000, Genalyn filed with the RTC a Motion to Admit a Supplemental
Complaint with the attached Supplemental Complaint. In the supplemental
complaint, she invoked her right to exercise legal redemption as a co-owner of
the disputed property. However, the RTC denied the motion in its Order11 dated
December 28, 2000. Subsequently, she filed a petition for certiorari and
mandamus under Rule 65 of the Rules of Court docketed as CA-G.R. Sp. No.
65629 with the CA.

The CA denied the petition in its decision dated November 18, 2002. It held that
Genalyn’s cause of action in the supplemental complaint is entirely different
from her original complaint. Thereafter, she elevated the case with this Court in
a petition for certiorari under Rule 65 of the Rules of Court docketed as G.R. No.
157955.12

Trial in the RTC continued while CA-G.R. Sp. No. 65629 was pending in the CA.
Consequently, Genalyn moved to suspend the proceedings until the CA has
decided on the propriety of the admission of the supplemental complaint.
However, the RTC denied the motion.13 At the pre-trial conference, Genalyn
moved again for the suspension of the proceedings but to no avail. On a trial
dated August 29, 2001, Genalyn filed a Motion to Cancel Hearing on the ground
that she was indisposed. As a result, the RTC issued an Order dated August 30,
2001 which dismissed the complaint on the ground of non-suit. The RTC denied
Genalyn’s motion for reconsideration in an Order dated January 4, 2002. On
January 16, 2002, the RTC issued an Order correcting the January 4, 2002 Order
due to a typographical error.14

On January 31, 2002, Genalyn filed an appeal docketed as CA-G.R. SP No.

74045. In the appeal, she questioned the RTC Orders dated August 30, 2001,
January 4, 2002, and January 16, 2002. On May 28, 2002, Genalyn again filed
with the CA a petition for certiorari under Rule 65 of the Rules of Court to annul
the same RTC Orders that comprise the subject matter of the ordinary appeal.
However, the CA denied the said petition. Tirelessly, Genalyn filed a petition for
review under Rule 45 of the Rules of Court before this Court, docketed as G.R.
No. 157745 which was consolidated with G.R. No. 157955.15

With respect to CA-G.R. CV No. 74045, the CA reversed the RTC’s ruling and
remanded the case for further proceedings.16 The CA also denied17 the spouses
Sy’s motion for reconsideration, prompting them to file the present petition.

On September 26, 2006, this Court promulgated a decision on the consolidated

cases entitled "Young v. Spouses Sy." We granted the petition in G.R. No. 157955
but denied the petition in G.R. No. 157745 for lack of merit.18

In G.R. No. 157955, we ruled that Genalyn's right to redeem the property is
dependent on the nullification of the partition which is the subject of the original
complaint. We held that the right of legal redemption as a co-owner is
conferred by law and is merely a natural consequence of co-ownership. In
effect, Genalyn's cause of action for legal redemption in her supplemental
complaint stems directly from her rights as a co-owner of the property subject of
the complaint. We thus ordered the RTC to admit the supplemental complaint.19

In G.R. No. 157745, we held that Genalyn had engaged in forum shopping in
appealing the RTC Orders and in subsequently filing a petition for certiorari
under Rule 65 with the CA involving the same RTC Orders. We found that the
elements of litis pendentia are present in the two suits because they are
founded on exactly the same facts and refer to the same subject matter. We
thus pronounced that the dismissal of the petition for certiorari was proper.20
We entered the entry of judgment in Young on March 19, 2007.
The Issues

In the present case, the spouses Sy pray that the CA’s Decision dated March 30,
2005 and Resolution dated August 8, 2005 be reversed and that the RTC’s Orders
dated August 30, 2001, January 4, 2002 and January 16, 2002 be reinstated. The
spouses Sy raise the same issues which were already disposed by this Court in
Young, namely:

(1) whether or not the CA erred in setting aside the RTC Orders dated August 30,
2001, January 4, 2002 and January 16, 2002 which dismissed the case for non-
suit; and

(2) whether or not the CA erred in not holding Genalyn guilty of forum shopping
in the CA’s Decision dated March 30, 2005 and Resolution dated August 8, 2005.
The Court’s Ruling
We deny the petition.

The present action is barred by the

law of the case

In denying the petition, we necessarily must reiterate our ruling in Young which
constitutes as the controlling doctrine or the law of the case in the present case.

Law of the case has been defined as the opinion delivered on a former appeal.
It means that whatever is once irrevocably established the controlling legal rule
of decision between the same parties in the same case continues to be the law
of the case whether correct on general principles or not, so long as the facts on
which such decision was predicated continue to be the facts of the case
before the court.21

We point out in this respect that the law of the case does not have the finality of
res judicata.1âwphi1 Law of the case applies only to the same case, whereas
res judicata forecloses parties or privies in one case by what has been done in
another case. In law of the case, the rule made by an appellate court cannot
be departed from in subsequent proceedings in the same case. Furthermore,
law of the case relates entirely to questions of law while res judicata is
applicable to the conclusive determination of issues of fact. Although res
judicata may include questions of law, it is generally concerned with the effect
of adjudication in a wholly independent proceeding.22

The rationale behind this rule is to enable an appellate court to perform its duties
satisfactorily and efficiently, which would be impossible if a question, once
considered and decided by it, were to be litigated anew in the same case
upon any and every subsequent appeal. Without it, there would be endless
litigation. Litigants would be free to speculate on changes in the personnel of a
court, or on the chance of our rewriting propositions once gravely ruled on
solemn argument and handed down as the law of a given case.23

In Young, we directed the RTC to admit Genalyn’s supplemental complaint. In

so ruling, we also vacated the RTC Orders which dismissed Genalyn’s complaint
for failure to prosecute. Moreover, Genalyn’s move to suspend the proceedings
which led to the dismissal of her complaint stemmed essentially from the RTC's
erroneous refusal to admit the supplemental complaint. On the second issue,
we unequivocably also settled that Genalyn committed forum shopping when
she filed an appeal and a petition for certiorari successively. This ruling we
uphold as the ruling that should apply.

WHEREFORE, the petition for review on certiorari is DENIED for lack of merit. The
CA Decision dated March 30, 2005 and Resolution dated August 8, 2005 are
hereby AFFIRMED.
No costs.
SO ORDERED.

ARTURO D. BRION
Associate Justice
FIRST DIVISION
March 22, 2017
G.R. No. 214864

PHILIPPINE PORTS AUTHORITY (PPA), represented by Oscar M. Sevilla, General

Manager, Benjamin B. Cecilio, Assistant Manager for Operations, and Sisali B.
Arap, Port Manager, Petitioner
vs
NASIPIT INTEGRATED ARRASTRE AND STEVEDORING SERVICES, INC. (NIASSI),
represented by Ramon Calo, Respondent
DECISION
CAGUIOA, J.:

This is a Petition for Review on Certiorari1 (Petition) filed under Rule 45 of the Rules
of Court against the Amended Decision2 dated September 15, 2014 (Amended
Decision) in CA-G.R. SP No. 04828-MIN rendered by the Court of Appeals,
Cagayan de Oro City, Special Former Twenty-Second Division (CA). The
Amended Decision stems from an Amended Petition for Mandamus with Prayer
for the Writ of Preliminary Mandatory Injunction and/or Temporary Restraining
Order3 filed before the Regional Trial Court of Butuan City (RTC) by respondent
Nasipit Integrated Arrastre and Stevedoring Services, Inc. (NIASSI) against
petitioner Philippine Ports Authority (PP A),4 which sought to compel the latter to
formally execute the 10-year cargo-handling contract awarded in NIASSI's favor.
The Facts

PP A is a government agency created by virtue of Presidential Decree No. 505

(PD 505). Under PD 505, PPA is charged with the management and control of all
ports in the Philippines.5 On the other hand, NIASSI is a duly organized Philippine
corporation engaged in the business of cargo handling.6

Sometime in November 2000, PP A, through its Pre-qualification, Bids and Awards

Committee (PBAC) accepted bids for a 10-year contract to operate as the sole
cargo handler at the port of Nasipit, Agusan del Norte (Nasipit
Port).7 Subsequently, PBAC issued Resolution No. 005-20008 recommending that
the 10-year cargo-handling contract be awarded to NIASSI as the winning
bidder.9

On November 20, 2000, the second highest bidder, Concord Arrastre and
Stevedoring Corporation (CASCOR) filed a protest with PPA's General Manager,
Oscar M. Sevilla10 (Sevilla), alleging that two of NIASSI's stockholders on record
are legislators who are constitutionally prohibited from having any direct or
indirect financial interest in any contract with the government or any of its
agencies during the term of their office.11

Notwithstanding the protest, PPA issued a Notice of Award in favor of NIASSI on

December 21, 2000.12 The Notice of Award directed NIASSI to signify its
concurrence thereto by signing the conforme portion and returning the same to
PP A within 10 days from receipt.13 PP A received notice of NIASSI's conformity to
the Notice of Award on January 3, 2001.14
However, instead of formally executing a written contract, NIASSI requested PP
A to issue a Hold-Over Authority (HOA) in its favor, in view of CASCOR's pending
protest. PPA granted NIASSI's request and issued a HOA dated August 1, 2001,
effective until October 31, 2001, "or until [such time] a cargo[-]handling contract
shall have been awarded, whichever comes first."15

Meanwhile, the Office of the Government Corporate Counsel (OGCC) issued

Opinion No. 028, series of2002 on February 7, 2002 (OGCC Opinion) which
confirmed the authority of PP A to bid out the cargo-handling contract and
affirmed the validity of the award in NIASSI's favor.16 Despite this, the HOA was
subsequently extended several times upon NIASSI' s request. While the exact
number of extensions and their particulars cannot be ascertained from the
records, the last extension of the HOA appears to have been issued on October
13, 2004, for a term of six months.17

However, barely two months after the last extension of the HOA, PPA, through its
Assistant General Manager for Operations, Benjamin B. Cecilio (Cecilio), issued a
letter dated December 6, 2004 revoking the extension.18 In said letter, Cecilio
advised NIASSI that PPA received numerous complaints regarding the poor
quality of its services due to the use of inadequately maintained equipment.
Cecilio further relayed that PPA would take over the cargo-handling services at
the Nasipit Port beginning December 10, 2004.19
Proceedings before the RTC

On the scheduled date of the take-over, NIASSI filed with the RTC a Petition for
Injunction with Prayer for the Writ of Preliminary Injunction and/or Temporary
Restraining Order. The petition was later amended to a Petition for Mandamus
with Prayer for the Writ of Preliminary Mandatory Injunction and/or Temporary
Restraining Order on December 22, 2004. (Amended Petition).20
The Amended Petition prayed for the issuance of a writ of mandamus
directing PPA to formally execute a written contract, and a writ of preliminary
mandatory injunction directing PP A to turn over the management and
operations of Nasipit Port's cargo-handling services back to NIASSI.21

On March 18, 2005, the RTC issued a resolution granting NIASSI's prayer for a writ
of preliminary mandatory injunction, conditioned upon the posting of a
₱1,000,000.00 surety bond.22 The pertinent portion of the said resolution reads:

It is undeniable that petitioner spent a considerable capital outlay, in the form of

equipment, machineries and appliances in the establishment of its port
operation. Moreover, it has also supplied the necessary manpower to wheel its
operation.

When the PPA took an active part in the management, control and supervision
of the port operations, it practically utilized all the available resources supplied
by the petitioner.

What actually happened was that PP A made only adjustment/correction in the

port operation to improve the delivery of basic services. No additional capital
outlay was spent.
In summation, this Court recognizes and declares that petitioner's right to
continue the cargo handling operations should be protected. It cannot be
denied that the continued operation by respondents will probably work injustice
to the petitioner, causing irreparable damage to the latter. The better ends of
justice [will] be served if the state of affairs [will] be maintained prior to
respondent's actual takeover, until finally the main action is disposed.23

After NIASSI posted the required surety bond, the RTC issued the writ of
preliminary mandatory injunction on March 28, 2005.24 PP A filed a Motion for
Reconsideration on even date, followed by a Supplemental Motion on March
30, 2005. The Supplemental Motion alleged that the writ of preliminary
mandatory injunction should be quashed since its corresponding surety bond
designated NIASSI's President Ramon Calo as principal, instead ofNIASSI itself.25

Subsequently, PP A filed a Manifestation expressing its willingness to file a

counter-bond in the event that its Motion for Reconsideration is
granted.26 Thereafter, NIASSI filed an Opposition/Reply to PPA's Motion for
Reconsideration.27

On April 11, 2005, the RTC issued an order (April 2005 RTC Order) granting PPA's
Motion for Reconsideration. The April 2005 RTC Order immediately dissolved the
writ of preliminary mandatory injunction and directed NIASSI to surrender the
management and control of Nasipit Port's cargo-handling operations to PPA.28
Prompted by the April 2005 RTC Order, NIASSI filed a Petition for Certiorari before
the CA (CA petition), docketed as CA-G.R. SP No. 00214.29 The CA petition
assailed the immediately executory nature of the April 2005 RTC Order and
questioned the dissolution of the writ of preliminary injunction without prior
hearing. In addition, the CA petition alleged that the April 2005 RTC Order
reversed the RTC's previous order despite the absence of new matters or issues
raised.30 The CA petition thus prayed for the reversal of the April 2005 RTC Order,
and ultimately, the reinstatement of the writ of preliminary injunction.31

For its part, PPA argued, among others, that NIASSI was not entitled to the
issuance of the injunctive writ because it had no legal right to continue
providing cargo-handling services at Nasipit Port, considering that PP A has no
existing cargo-handling contract with NIASSI.32

In a Decision33 dated August 8, 2006, the CA granted the petition observing that
Presiding Judge Godofredo B. Abul, Jr. (Judge Abul) of the RTC committed
several procedural errors when he issued the April 2005 RTC Order. According to
the CA, Judge Abul did not conduct a hearing on PPA's Motion for
Reconsideration nor did he direct PP A to file a counter-bond before quashing
the writ of preliminary mandatory injunction, in violation of Section 6, Rule 58 of
the Rules of Court.34 The CA concluded that these lapses, taken together with
Judge Abul's sudden and inexplicable change of mind, gave rise to suspicions
that the issuance of the April 2005 RTC Order was tainted with irregularity and
grave abuse of discretion.35 Thus, the CA directed the reinstatement of the writ
of preliminary mandatory injunction.36 This decision was later affirmed by this
Court in the case of Philippine Ports Authority v. Nasipit Integrated Arrastre and
Stevedoring Services, Inc.37
Notably, in the process of resolving NIASSI's CA petition, it became necessary for
the CA to determine whether NIASSI had any legal right to continue its
operations at Nasipit Port. In this connection, the CA found that a perfected
contract between NIASSI and PP A in respect of the cargohandling operations
in fact existed, albeit unwritten.38 The CA held:

Under Article 1318 of the Civil Code, there can be no contract unless the
following requisites concur: (a) consent of the contracting parties; (b) object
certain which is the subject matter of the contract; and (c) cause of the
obligation which is established.

Under Article 1315 of the same Code, contracts are perfected by mere consent,
upon the acceptance by the offeree of the offer made by the offeror. From
that moment, the parties are bound not only to the fulfillment of what has been
expressly stipulated but also to all the consequences which, according to their
nature, may be in keeping with good faith, usage and law.

In the case at bar, there is no dispute as to the subject matter of the contract
and the cause of the obligation. The controversy lies in the consent - whether
the Notice of Award constitutes as a counter-offer and, as a consequence, did
not give rise to a perfected contract.

A perusal of the records shows that PPA conducted a public bidding for a ten-
year contract to operate as sole cargo handler at Nasipit Port, and among the
bidders, only two (2) pre-qualified, one of which is the petitioner. In its Resolution
No. 005-2000, the Pre-qualification, Bids and Awards Committee (PBAC)
declared the petitioner as the winning bidder, and, consequently, a Notice of
Award was given to the latter. x x x
xxxx
Since respondent PP A started the process of entering into the contract by
conducting a bidding, Article 1326 of the Civil Code shall apply, to wit:

Advertisements to bidders are simply invitations to make proposals, and the

advertiser is not bound to accept the highest or lowest bidder, unless the
contrary appears.

Accordingly, the rules and regulations issued by the PPA for the public bidding
constituted the advertisement to bid on the contract, while the bid proposals
submitted by the bidders constituted the offer. The reply of respondent PPA
shows its acceptance or rejection of the respective offers.

x x x PPA categorically awarded the contract to the petitioner in accordance

with the terms and conditions of the latter's bid proposal. This is the acceptance
of petitioner's offer as contemplated by the law. A thorough reading of the
required documents clearly shows that they had no material or significant
bearing to the perfection of the contract. These were mere formal requirements
that will not affect the award of the contract to the petitioner. If at all, the need
to submit the documents in question pertains to the issuance of the written
evidence of the contract.
xxxx
Verily, the Holdover Authority (HOA) granted by the private respondent and the
series of extensions allowing the petitioner to operate provisionally the arrastre
service confirm the perfection of their contract despite the delay in its
consummation due to acts attributable to the private respondents. But it cannot
be gainsaid that the series of extensions constitute partial fulfillment and
execution of the contract of cargo handling services.
xxxx

It is therefore Our submission that a perfected contract of cargo handling

services existed when the petitioner won the bidding, given the Notice of Award
and conformed (sic) to the conditions set forth in the Notice of Award because
the requirements prescribed in the Notice of Award have no bearing on the
perfection of the contract. On the contrary, it amounted to a qualified
acceptance of petitioner's offer, a clear legal right to continue its operations in
the port. Since the respondent is bound by the contract, the act of taking over
the cargo handling service from the petitioner is violative of its right.39 (Emphasis
supplied)

In view of the foregoing CA decision, and this Court's decision in G.R. No. 174136
affirming the same, the RTC directed the parties to submit their simultaneous
memoranda on the issue of whether the Amended Petition had been rendered
moot and academic.40 On the basis of such memoranda, Judge Abul issued a
Resolution41 dated June 1, 2011 (June 2011 RTC Resolution) dismissing the
Amended Petition for being moot and academic. The June 2011 RTC Resolution
observed that since the CA had already made a definitive ruling that a
contract had been perfected between the parties, the RTC had "nothing left to
do" in respect of the Amended Petition.42
However, on NIASSI's Motion for Reconsideration, the RTC issued a
Resolution43 dated September 20, 2011 (September 2011 RTC Resolution)
reversing the June 2011 RTC Resolution. The dispositive portion of the September
2011 RTC Resolution reads:
WHEREFORE, premises considered, the Motion for Reconsideration is granted.

The defendant is hereby ordered to execute a formal ten (10) years contract in
favor of the plaintiff, upon the finality of this order. The writ of preliminary
injunction issued by the Court dated August 8, 2006, will be considered dissolved
upon perfection of the formal arrastre service contract.
SO ORDERED.44

PPA moved for the reconsideration of the September 2011 RTC Resolution.
However, the RTC denied PPA's motion in an Order dated December 20,
2011(December2011 RTC Order).45
Proceedings before the CA

Aggrieved, PP A filed an appeal before the CA, docketed as CA-G.R. SP No.

04828. In said appeal, PPA faulted the RTC for reversing the June 2011 RTC
Order, insisting that the Amended Petition had already become moot and
academic. The PP A also alleged that the CA erred in directing it to execute a
written 10-year contract with NIASSI reckoned from the finality of the September
2011 RTC Resolution, as this was tantamount to extending the original term of the
contract between the parties that was perfected on January 3, 2001, the date
when PPA received notice of NIASSI's conformity to the Notice of Award.46

PPA thus prayed that the September 2011 RTC Resolution and December 2011 R
TC Order be set aside, and a new order be issued dismissing the Amended
Petition for being moot and academic.47

On December 11, 2013, the CA rendered a Decision48 granting PPA's appeal in

part (CA Decision) by annulling the September 2011 RTC Resolution and
December 2011 RTC Order in so far as they failed to consider that the 10-year
cargo-handling contract had been partially fulfilled. The CA ruled:

There is already a perfected contract of ten years, albeit it is not written. In fact,
NIASSI is already exercising the subject matter of that unwritten contract. To
compel PP A to execute a new written ten-year contract without deducting the
periods mentioned above is to create another contract for the parties and to
unjustly enrich NIASSI. Consequently, the written contract should only cover the
remaining period of the original ten-year contract. In the event that the total
period is already more than ten (10) years, then the petition should be dismissed
for being moot and academic.

WHEREFORE, the instant appeal is partly GRANTED. The case is remanded to the
Regional Trial Court to determine the total period of time during which NIASSI
was in operation of the cargo handling services of Nasipit port, which period
covers the following:

(1) The several hold-over permits granted to NIASSI since 2001, the year the
contract was perfected;
(2) The operation of NIASSI as a consequence of Our decision in 2006; and

(3) The operation of NIASSI as a consequence of the granting of its motion for
reconsideration in 2011 until the finality of this case.

The total period shall then be deducted, as partial fulfillment, to the ten-year
contract in favor of NIASSI. The written contract should only cover the balance
of the ten-year period awarded to NIASSI in the Notice of Award. Otherwise, the
petition should be dismissed for being moot and academic.
SO ORDERED.49 (Emphasis and underscoring supplied)

On NIASSI's Motion for Reconsideration, however, the CA issued its Amended

Decision dated September 15, 2014.50 As stated earlier, the Amended Decision
affirmed the September 2011 R TC Resolution and December 2011 RTC Order
directing PPA to execute the cargo-handling contract in favor of NIASSI for a full
10-year term from the finality of the September 2011 RTC Resolution,51 on the
ground that NIASSI's operations for the period covered by the HOA and its
extensions should not be deducted therefrom:

Having a Notice of Award in its favor and having complied with the
requirements, NIASSI has established that it has a right for (sic) the ten-year
cargohandling contract; yet no written contract embodying the terms of the
agreement was signed between the parties. "A contract is perfected by mere
consent and from that moment the parties are bound not only to the fulfillment
of what has been expressly stipulated but also to all the consequences which,
according to their nature, may be in keeping with good faith, usage and
law." What remains then is just the execution of the written contract embodying
the terms of the agreement so that both parties can comply. And "there is no
unjust enrichment where the one receiving the benefit has a legal right or
entitlement thereto." Thus, pursuant to the Notice of Award, the PPA is now
directed to execute the 10-year written contract in favor of NIASSI. Based on the
language of the last hold-over authority, the PPA does not consider the hold-
over permits as partial fulfillment of the unwritten cargo handling contract. The
HOA is a separate agreement between the parties pending the issuance of the
cargo-handling services contract.52 (Italics in the original; emphasis supplied)
PP A received a copy of the Amended Decision on October 20, 2014.53

On November 4, 2014, PPA filed a motion with the Court asking for an additional
period of 30 days within which to file a Petition for Review on Certiorari.54 PPA's
motion was granted by the Court in its Resolution dated November 17, 2014.55
Finally, on December 3, 2014, PPA filed the instant Petition.
Issue

The sole issue for resolution of this Court is whether the CA erred when it issued
the Amended Decision affirming the September 2011 RTC Resolution and
December 2011 RTC Order, and directing PPA to execute a cargo-handling
contract in favor of NIASSI for a full 10-year term without deducting the period
covered by the HOA.
The Court's Ruling

In the instant Petition, PPA contends that the Amended Petition before the RTC
had been rendered moot and academic by virtue of the CA's decision in CA-
G.R. SP No. 00214.56 On this basis, PPA concludes that it can no longer be
compelled to formally execute a contract with NIASSI upon finality of the
Amended Decision, since the term of the perfected contract already expired
on January 3, 2011, 10 years after PPA received notice of NIASSI's conformity to
the Notice of Award.57
The Petition is impressed with merit.

The CA 's findings in CA-G.R. SP No.

00214 constitute the law of the case
between the parties, and are thus
binding herein.

In its decision in CA-G.R. SP No. 00214, the CA held that (i) the 10- year cargo-
handling contract had already been perfected, and (ii) the HOA and its
subsequent extensions constituted partial fulfillment thereof. For emphasis, the
relevant portions are reproduced:

Verily, the Holdover Authority (HOA) granted by the private respondent and the
series of extensions allowing the petitioner to operate provisionally the arrastre
service confirm the perfection of their contract despite the delay in its
consummation due to acts attributable to the private respondents. But it cannot
be gainsaid that the series of extensions constitute partial fulfillment and
execution of the contract of cargo handling services.
xxxx

It is therefore Our submission that a perfected contract of cargo handling

services existed when the petitioner won the bidding, given the Notice of Award
and conformed to the conditions set forth in the Notice of Award because the
requirements prescribed in the Notice of Award have no bearing on the
perfection of the contract. On the contrary, it amounted to a qualified
acceptance of petitioner's offer, a clear legal right to continue its operations in
the port. Since the respondent is bound by the contract, the act of taking over
the cargo handling service from the petitioner is violative of its right.58
This decision was affirmed by the Court in toto in G.R. No. 174136, thus:

WHEREFORE, the petition is DENIED and the appealed Decision of the Court of
Appeals isAFFIRMED.59

In tum, the Court's decision became final and executory after the lapse of 15
days from notice thereof to the parties. From such time, the Court's decision
became immutable and unalterable.60

The Court notes that CA-G.R. SP No. 00214 and the instant Petition both stem
from the Amended Petition, and seek the same relief - the execution of a written
contract in accordance with the Notice of Award. Moreover, both cases
involve the same facts, parties and arguments. For these reasons, the Court
believes that the doctrine of the law of the case is applicable.

The doctrine of the law of the case precludes departure from a rule previously
made by an appellate court in a subsequent proceeding essentially involving
the same case.61 Pursuant to this doctrine, the Court, in De La Salle University v.
De La Salle University Employees Association (DLSUEANAFTEU), 62 (DLSU) denied
therein petitioner's prayer for review, since the petition involved a single issue
which had been resolved with finality by the CA in a previous case involving the
same facts, arguments and relief.

We note that both G.R. No. 168477 and this petition are offshoots of petitioner's
purported temporary measures to preserve its neutrality with regard to the
perceived void in the union leadership. While these two cases arose out of
different notices to strike filed on April 3, 2003 and August 27, 2003, it is
undeniable that the facts cited and the arguments raised by petitioner are
almost identical. Inevitably, G.R. No. 168477 and this petition seek only one relief,
that is, to absolve petitioner from respondent's charge of committing an unfair
labor practice, or specifically, a violation of Article 248(g) in relation to Article
252 of the Labor Code.

For this reason, we are constrained to apply the law of the case doctrine in light
of the finality of our July 20, 2005 and September 21, 2005 resolutions in G.R. No.
168477. In other words, our previous affirmance of the Court of Appeals' finding -
that petitioner erred in suspending collective bargaining negotiations with the
union and in placing the union funds in escrow considering that the intra-union
dispute between the Aliazas and Bafiez factions was not a justification therefor -
is binding herein. Moreover, we note that entry of judgment in G.R. No. 168477
was made on November 3, 2005, and that put to an end to the litigation of said
issues once and for all.

The law of the case has been defined as the opinion delivered on a former
appeal. It means that whatever is once irrevocably established as the
controlling legal rule or decision between the same parties in the same case
continues to be the law of the case, whether correct on general principles or
not, so long as the facts on which such decision was predicated continue to be
the facts of the case before the court.63 (Italics in the original; emphasis
supplied; citations omitted)

In Heirs of Felino M Timbol, Jr. v. Philippine National Bank64 (Heirs of Timbol), the
Court was confronted with procedural antecedents similar to those attendant in
this case. Therein, the Court affirmed the CA's decision declaring as valid the
extrajudicial foreclosure assailed by petitioners on the basis of factual findings
which were affirmed by the Court in a previous decision that dealt with the
dissolution of a writ of preliminary injunction issued in the same case. Thus,
in Heirs of Timbol, the Court ruled that the CA correctly applied the doctrine of
the law of the case.
The Court of Appeals correctly applied the law of the case doctrine.

In PNB v. Timbol, PNB brought a petition for certiorari to set aside the order of
Judge Zeus L. Abrogar that issued a writ of preliminary injunction in Civil Case
No. 00-946. The Court struck down this order, holding that the order "was
attended with grave abuse of discretion."

The Court found that the Spouses Timbol "never denied that they defaulted in
the payment of the obligation." In fact, they even acknowledged that they had
an outstanding obligation with PNB, and simply requested for more time to pay.
The Court also held that the extrajudicial foreclosure of the mortgage was
proper, since it was done in accordance with the terms of the Real Estate
Mortgage, which was also the Court's basis in finding that Supreme Court
Administrative Order No. 3 does not apply in that case.

The Court also found that the Spouses Timbol's claim that PNB bloated the
amount of their obligation was "grossly misleading and a gross misinterpretation"
by the Spouses Timbol. The Court noted the Spouses Timbol's letter to PNB that
acknowledged they had an outstanding obligation to PNB, as well as affirmed
that they received the demand letter directing them to pay, contrary to their
claim. Thus, the Court in PNB v. Timbol concluded that the R TC committed
grave abuse of discretion when it issued a writ of preliminary injunction.
No doubt, this Court is bound by its earlier pronouncements in PNB v. Timbol.

The term law of the case has been held to mean that "whatever is once
irrevocably established as the controlling legal rule or decision between the
same parties in the same case continues to be the law of the case, whether
correct on general principles or not, so long as the facts on which such decision
was predicated continue to be the facts of the case before the court. As a
general rule, a decision on a prior appeal of the same case is held to be the law
of the case whether that question is right or wrong, the remedy of the party
deeming himself aggrieved being to seek a rehearing."
xxxx

The Court is bound by its earlier ruling in PNB v. Timbol finding the extrajudicial
foreclosure to be proper. The Court therein thoroughly and thoughtfully
examined the validity of the extrajudicial foreclosure in order to determine
whether the writ of preliminary injunction was proper. To allow a reexamination
of this conclusion will disturb what has already been settled and only create
confusion if the Court now makes a contrary finding.

Thus, "[q]uestions necessarily involved in the decision on a former appeal will be

regarded as the law of the case on a subsequent appeal, although the
questions are not expressly treated in the opinion of the court, as the
presumption is that all the facts in the case bearing on the point decided have
received due consideration whether all or none of them are mentioned in the
opinion."65 (Italics in the original; emphasis supplied; citations omitted)

The Court's discussions in DLSU and Heirs of Timbol are in point here where the
allegations and reliefs prayed for in NIASSI' s Amended Petition show that their
disposition required the RTC to resolve a single issue - whether PP A is bound to
formally execute the 10-year cargo-handling contract pursuant to the Notice of
Award. The relevant portions of the Amended Petition state:

14. Petitioner won the bidding to operate cargo-handling services in the port of
Nasipit, Agusan del Norte, for ten (10) years. Notwithstanding due compliance
by petitioner of (sic) all the requirements as indicated in the Notice of Award x x
x petitioner was surprised to receive a communication from respondent CECILIO
for public respondent to takeover instead the management and operations of
cargo-handling services in the port of Nasipit, Agusan del Norte.
xxxx
19. The act of public respondent in taking-over the management and
operations of cargo-handling services of petitioner utilizing the existing facilities
and manpower constitutes not only a blatant disregard to the existing permit to
operate, it likewise demonstrates a notorious abuse of power reminiscent of the
dark days of martial rule. The same act is oppressive, capricious, whimsical,
arbitrary and despotic as it denied petitioner of (sic) its right to be heard and
dispute the malicious allegations against it. Essentially, the act is a calculated
move to snatch away the award of the ten-year contract of petitioner to
operate the Cargo Handling Services. x x x

24. WHEREFORE, FOR ALL THE FOREGOING, it is most respectfully prayed of (sic)
this Honorable Court that upon filing of this Petition, a Temporary Restraining
Order (TRO) and/or the Writ of Preliminary Mandatory Injunction be issued
commanding or enjoining the respondents and all persons acting in their behalf
or direction, to refrain, cease and desist from further implementing the take-over
of the management and operations of the cargo-handling services in Nasipit
Port, Agusan del Norte, as contained in the letter dated 6 December 2004 x x x,
and to refrain from issuing similar orders pending resolution of the instant case
and to restore to the herein petitioner the management and operation of the
cargo handling services at the Port of Nasipit and until after the Honorable Court
shall have heard and resolved the application for the issuance of the Writ of
Preliminary Mandatory Injunction.
25. Petitioner further prays that after due notice and hearing, the Writ of
Mandamus be issued commanding the respondents to execute or cause the
final execution of a Cargo-Handling contract between petitioner and the
Philippine Ports Authority as represented by herein respondents.66 (Underscoring
omitted; emphasis supplied)

In CA-G.R. SP No. 00214, the CA determined the existence of a perfected

contract between PP A and NIASSI in order to ascertain whether the issuance of
a writ of preliminary injunction in favor of NIASSI was proper. Thus, the sole issue
for the RTC's determination had been resolved in CAG. R. SP No. 00214, when
the CA made the following findings:

1. The 10-year cargo-handling contract had been perfected on January 3, 2001,

the date when PP A received notice of NIASSI's conformity to the Notice of
Award;

2. The parties are bound to formally execute the perfected cargo-handling

contract in accordance with the Notice of Award; and

3. NIASSI's operations during the period covered by the HOA constitute partial
fulfillment of the perfected cargo-handling contract.

A preliminary injunction is in the nature of an ancillary remedy to preserve

the status quo during the pendency of the main case. As a necessary
consequence, matters resolved in injunction proceedings do not, as a general
rule, conclusively determine the merits of the main case or decide controverted
facts therein.67 Generally, findings made in injunction proceedings are subject to
the outcome of the main case which is usually tried subsequent to the injunction
proceedings.

In this case, however, no further proceedings were conducted after the

Decision of the Supreme Court relative to the injunction proceedings had
become final. To be sure, the RTC directed the parties to submit their respective
memoranda on the issue of whether or not the main case had become moot
and academic because of the finality of said Decision and, on the basis of the
memoranda, the R TC resolved to dismiss the Amended Petition, as it had
nothing left to determine.68 As such, no evidence to controvert the findings of
the CA in CA-G.R. SP No. 00214 were presented in the main case. This being the
case, the factual findings of the CA in respect of the perfected cargo-handling
contract in the injunction proceedings became conclusive upon finality of this
Court's decision affirming the same. These circumstances thus render the
application of the law of the case doctrine proper.

In any case, it is worth noting that NIASSI recognized the perfection of the
cargo-handling contract in its Comment to the instant Petition, thus:

x x x When NIASSI received and signed the "conforme" portion [of the Notice of
Award], there [was] already [a] meeting of minds between the parties as to the
object and cause of the cargo handling contract, including the terms and
duration thereof.69

To NIASSI, the cargo-handling contract was a valid and binding agreement,

and it was thus bound by the concomitant rights and obligations arising
therefrom.
The term of the perfected contract has already expired.

PP A avers that its 10-year cargo-handling contract with NIASSI already expired
on January 3, 2011, after the lapse of 10 years from the date when said contract
was perfected.70 In turn, PP A concludes that it can no longer be directed to
formally execute another contract with NIASSI, since such a directive would
unduly lengthen the term of the cargo-handling contract contrary to the
intention of the parties.71

While the Court agrees with PPA's submission that the perfected contract has
already expired, the Court clarifies that such expiration is not because of the
mere lapse of 10 years reckoned from the date when the same was perfected.
To hold as such would be to feign ignorance of the events that transpired
thereafter, which led to the institution of this very Petition.

It bears emphasizing that PPA assumed the management and operations of the
cargo-handling services at Nasipit Port on two separate instances- first, by virtue
of its letter dated December 6, 2004 revoking the last extension of the HOA, and
second, by virtue of the April 2005 RTC Order lifting the preliminary mandatory
injunction granted in NIASSI's favor. The IO-year term of the perfected contract
must be deemed interrupted during the periods when PPA assumed
management and control over NIASSI's cargo-handling operations.
The relevant periods are summarized, thus:

Period Duration Operator Basis

January 3, 2001 3 years, 11 NIASSI Notice of Award

to months and 6
December 9, days
2004

December 10, 3 months and 17 PPA Letter dated

2004 days December 6,
to March 27, 2004
2005

March 28, 2005 14 days NIASSI Issuance of

to Preliminary
April 11, 2005 Mandatory
Injunction

April 12, 2005 to 1 year, 3 months PPA Dissolution of

August 7, 2006 and 26 days Preliminary
Injunction

August 8, 2006 to 8 years, 3 months NIASSI Reinstatement of

December 3, and 26 days Preliminary
2014 Injunction
 December 3, - NIASSI Institution of the
2014 Petition

Based on the table above, NIASSI conducted the cargo-handling operations at

Nasipit Port for a total period of 3 years, 11 months and 20 days. Notably, NIASSI
does not dispute that it has been conducting such operations since the
reinstatement of the preliminary mandatory injunction.

Thus, even if the Court assumes a conservative stance for purposes of illustration
and sets the cut-off date for NIASSI's current operations on the date when this
Petition was filed, NIASSI's total period of operation would be pegged at 12
years, 3 months and 15 days, computed as follows:

Period Duration Basis

January 3, 2001 to 3 years, 11 months and 6 Notice of Award

December 9, 2004 days

March 28, 2005 to April 14 days Issuance of Preliminary

11, 2005 Mandatory Injunction

August 8, 2006 to 8 years, 3 months and 26 Reinstatement of

December 3, 2014 days Preliminary Injunction

Total 12 years, 3 months and 15 days

Clearly, the 10-year term of the perfected contract had already expired,
leaving the R TC with nothing to enforce.72

Finally, it bears stressing that PPA issued the Notice of Award on December 21,
2000. To compel PPA to formally execute a 10-year cargo-handling contract at
this time on the basis of conditions prevailing nearly two decades ago would
certainly be unreasonable and iniquitous.
For the foregoing reasons, the Court resolves to grant the instant Petition.

WHEREFORE, premises considered, the Petition for Review on Certiorari is

GRANTED. The Amended Decision dated September 15, 2014 of the Court of
Appeals in CA-G.R. SP No. 04828-MIN is SET ASIDE. Consequently, SP. Civil Case
No. 1242 pending before the Regional Trial Court of Butuan City, Branch 4, is
hereby DISMISSED.
SO ORDERED.

ALFREDO BENJAMIN S. CAGUIOA

Associate Justice
SECOND DIVISION
G.R. No. 148106 July 17, 2006

EURO-MED LABORATORIES, PHIL., INC., represented by LEONARDO H.

TORIBIO, petitioner,
vs.
THE PROVINCE OF BATANGAS, represented by its Governor, HON. HERMILANDO I.
MANDANAS, respondent.
DECISION
CORONA, J.:

Before the Court is a petition for review on certiorari1 assailing, on pure questions
of law, the March 7 and May 16, 2001 orders of the Regional Trial Court (RTC) of
Batangas City2 in Civil Case No. 5300.

Civil Case No. 5300 was a complaint for sum of money3 filed by petitioner Euro-
Med Laboratories, Phil., Inc. against respondent Province of Batangas. The
pertinent portions of the complaint read:

3. On several occasions, particularly from the period of 19 August 1992 to 11

August 1998, defendant [respondent here], thru its various authorized
representatives of the government hospitals identified and listed below,
purchased various Intravenous Fluids (IVF) products from the plaintiff [petitioner
here], with an unpaid balance of Four Hundred Eighty Seven Thousand Six
Hundred Sixty-Two Pesos and Eighty Centavos (P487,662.80), as of 28 February
1998, broken down as follows: x x x x which purchases were evidenced by
invoices duly received and signed by defendant’s authorized representatives,
upon delivery of the merchandise listed in said invoices.

4. Under the terms and conditions of the aforesaid invoices, defendant agreed
and covenanted to pay plaintiff, without need of demand, its obligations in the
above-enumerated invoices on various terms indicated therein.

5. Plaintiff made several demands for defendant to pay its accountabilities,

including setting up several dialogues with plaintiff’s representatives, but these
proved fruitless.

6. Despite repeated demands by plaintiff for defendant to pay and settle its
unpaid and outstanding accounts under the aforementioned invoices, said
defendant has failed and still fails to comply therewith.4

In its answer,5 respondent admitted most of the allegations in the complaint,

denying only those relating to the unpaid balance supposedly still due
petitioner. Respondent alleged that some payments it had already made were
not reflected in the computation set forth in the complaint and that it was
continuously exerting genuine and earnest efforts "to find out the true and
actual amount owed."6 Pre-trial and trial followed.

At the conclusion of petitioner’s presentation of evidence, respondent filed a

motion to dismiss7 the complaint on the ground that the primary jurisdiction over
petitioner’s money claim was lodged with the Commission on Audit (COA).
Respondent pointed out that petitioner’s claim, arising as it did from a series of
procurement transactions with the province, was governed by the Local
Government Code provisions and COA rules and regulations on supply and
property management in local governments. Respondent argued that the case
called for a determination of whether these provisions and rules were complied
with, and that was within the exclusive domain of COA to make.

Finding the motion to be well-taken, the RTC issued on March 7, 2001 an

order8 dismissing petitioner’s complaint without prejudice to the filing of the
proper money claim with the COA. In a subsequent order dated May 16,
2001,9 the RTC denied petitioner’s motion for reconsideration. Hence, this
petition.

The resolution of this case turns on whether it is the COA or the RTC which has
primary jurisdiction to pass upon petitioner’s money claim against the Province
of Batangas. We rule that it is the COA which does. Therefore, we deny the
petition.

The doctrine of primary jurisdiction holds that if a case is such that its
determination requires the expertise, specialized training and knowledge of an
administrative body, relief must first be obtained in an administrative proceeding
before resort to the courts is had even if the matter may well be within their
proper jurisdiction.10 It applies where a claim is originally cognizable in the courts
and comes into play whenever enforcement of the claim requires the resolution
of issues which, under a regulatory scheme, have been placed within the
special competence of an administrative agency. In such a case, the court in
which the claim is sought to be enforced may suspend the judicial process
pending referral of such issues to the administrative body for its view 11 or, if the
parties would not be unfairly disadvantaged, dismiss the case without
prejudice.12

This case is one over which the doctrine of primary jurisdiction clearly held sway
for although petitioner’s collection suit for P487,662.80 was within the jurisdiction
of the RTC,13 the circumstances surrounding petitioner’s claim brought it clearly
within the ambit of the COA’s jurisdiction.

First, petitioner was seeking the enforcement of a claim for a certain amount of
money against a local government unit. This brought the case within the COA’s
domain to pass upon money claims against the government or any subdivision
thereof under Section 26 of the Government Auditing Code of the Philippines:14

The authority and powers of the Commission [on Audit] shall extend to and
comprehend all matters relating to x x x x the examination, audit, and
settlement of all debts and claims of any sort due from or owing to the
Government or any of its subdivisions, agencies, and instrumentalities. x x x x.

The scope of the COA’s authority to take cognizance of claims is circumscribed,

however, by an unbroken line of cases holding statutes of similar import to mean
only liquidated claims, or those determined or readily determinable from
vouchers, invoices, and such other papers within reach of accounting
officers.15 Petitioner’s claim was for a fixed amount and although respondent
took issue with the accuracy of petitioner’s summation of its accountabilities, the
amount thereof was readily determinable from the receipts, invoices and other
documents. Thus, the claim was well within the COA’s jurisdiction under the
Government Auditing Code of the Philippines.

Second, petitioner’s money claim was founded on a series of purchases for the
medical supplies of respondent’s public hospitals. Both parties agreed that these
transactions were governed by the Local Government Code provisions on
supply and property management16 and their implementing rules and
regulations promulgated by the COA17 pursuant to Section 383 of said
Code.18 Petitioner’s claim therefore involved compliance with applicable
auditing laws and rules on procurement. Such matters are not within the usual
area of knowledge, experience and expertise of most judges but within the
special competence of COA auditors and accountants. Thus, it was but proper,
out of fidelity to the doctrine of primary jurisdiction, for the RTC to dismiss
petitioner’s complaint.

Petitioner argues, however, that respondent could no longer question the RTC’s
jurisdiction over the matter after it had filed its answer and participated in the
subsequent proceedings. To this, we need only state that the court may raise
the issue of primary jurisdiction sua sponte and its invocation cannot be waived
by the failure of the parties to argue it as the doctrine exists for the proper
distribution of power between judicial and administrative bodies and not for the
convenience of the parties.19

WHEREFORE, the petition is hereby DENIED. The March 7, and May 16, 2001 orders
of the Regional Trial Court of Batangas City are hereby AFFIRMED.
Costs against petitioner.
SO ORDERED.
Puno, Chairperson, Sandoval-Gutierrez, Azcuna, Garcia, J.J., concur.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-22465 February 28, 1967

PEOPLE OF THE PHILIPPINES, ET AL., plaintiffs-appellants,

vs.
ASCENSION P. OLARTE, defendant-appellee.

Saturnino D. Bautista for plaintiff-appellant Meris.

Office of the Solicitor General Arturo A. Alafriz and Solicitor Ceferino S. Gaddi for
plaintiff-appellant People of the Philippines.
Chuidian Law Offices, P. V. Sison, D. Acuna, J. Asuncion, E. G. Bruno and Silverio
B. de Leon for defendant-appellee.
REYES, J.B.L., J.:

This is the second time the present case is brought on appeal to this Supreme
Court on the identical issue of prescription.

The antecedents of this case are briefly stated in the decision of the previous
appeal (L-13027):

Defendant 'Ascension P. Olarte is charged with libel. It is alleged in the

information that on or about the 24th day of February, 1954 and subsequently
thereafter said defendant had willfully, unlawfully and feloniously written certain
letters which were libelous, contemptuous and derogatory to Miss Visitacion M.
Meris, 'with evident and malicious purpose of insulting, dishonoring, humiliating
and bringing into contempt the good name and reputation' of said
complainant.

It appears that on January 7, 1956, Miss Meris lodged the corresponding charge
of libel with the provincial fiscal of Pangasinan, who assigned it to an assistant
provincial fiscal; that upon the latter's advice, on February 22, 1956, she filed
with the Justice of the Peace Court of Pozorrubio, Pangasinan, a complaint for
libel against Ascencion P. Olarte that the defendant waived her right to a
preliminary investigation, whereupon the justice of the peace court forwarded
the case to the Court of First Instance of Pangasinan, in which the
corresponding information was filed on July 3, 1956; that the defendant
seasonably moved to quash the information upon the ground of prescription of
the offense; and that, after due hearing, the court of first instance granted said
motion and dismissed the case, with costs de oficio. Hence, this appeal by
complainant Miss Meris with the conformity of the special counsel of the office
of the provincial fiscal of Pangasinan, who represented the prosecution in said
court.
This Court, likewise, stated in said previous appeal:

It is conceded that, as provided in Article 90 of the Revised Penal Code, 'the

crime of libel ... shall prescribe in two (2) years, which, pursuant to Article 91 of
the same Code, 'shall commence to run from the day on which the crime is
discovered by the offended party, the authorities or their agents, and shall be
interrupted by the filing of the complaint or information ....' In an affidavit,
attached to the complaint filed with the justice of the peace court, Miss Meris
stated that one defamatory letter was received by her on February 27, 1954 and
that there were other libelous letters, seemingly written after the first. According
to another affidavit, likewise, attached to said complaint, the subsequent letters
were received on or about March 1 and 13, April 26 and May 9, 1954. The issue
in the lower court, as well as in this appeal, is whether the statute of limitations
was suspended by the filing of the complaint with the justice of the peace court
on February 22, 1956, as claimed by appellant, or continued to run until July 3,
1956, when the information was filed with the court of first instance, as
contended by the defendant. His Honor, the trial Judge adopted the latter
alternative, and, accordingly, held that the prescriptive period had expired
before the filing of said information. (Emphasis supplied)

Resolving the issue thus posed on the basis of the abovequoted facts, this Court,
speaking through the then Associate Justice (now Chief Justice) Roberto
Concepcion, and after an extensive and exhaustive dissertation on the
applicable laws and pertinent decisions on the subject, rendered a decision,
promulgated on June 30, 1960, the dispositive portion of which reads:

IN VIEW OF THE FOREGOING, it is our considered opinion that the filing of the
complainant with the justice of the peace court of Pozorrubio, Pangasinan,
interrupted the running of the statute of limitations, as regards the crime of libel
with which defendant herein is charged, and that said crime has not been
extinguished, therefore, by prescription, for which reason the order appealed
from is reversed, and the records of this case are hereby remanded to the lower
court for further proceedings, conformably with law.
IT IS SO ORDERED.

The above ruling became final and executory, and, pursuant thereto, the lower
court set the case for hearing on the merits and the prosecution started
presenting its evidence. However, on August 26, 1963, the defense presented
anew a motion to quash the information, supplemented by another motion of
September 5, 1963, on the ground of prescription of the offense charged in the
information. In said motions, the defense invoked the subsequent ruling of
this Court in the case of People vs. Coquia, G.R. No. L-15456, promulgated on
June 29, 1963. On November 4, 1963, the prosecution opposed said motions. The
defense submitted its reply on November 13, 1963.

After due hearing on this incident, the lower court issued the appealed order,
dated January 16, 1964, sustaining the defense's new motion to quash upon the
ground of prescription. In this order, the lower court, after comparing and
finding that the set of facts obtaining in the case at bar is practically identical
with those of the Coquia case, opined that inasmuch as the latter is inconsistent
with or contradicts the previous decision
(L-13027) in the case at bar, promulgated on June 30, 1960, the 1963 ruling in
the Coquia case indicates that this Supreme Court intended to abandon the
one made in 1960 in the first appeal of this same case (L-13027).
Not satisfied, the prosecution (special counsel of the Office of the Provincial
Fiscal of Pangasinan and the private prosecutor jointly) interposed the present
appeal to this Court on a pure question of law.

The complainant Miss Meris through her private prosecutor, filed her brief.
Subsequently, the Solicitor General, in representation of plaintiff-appellant
People of the Philippines, instead of filing a brief, filed, on August 18, 1964, a
manifestation, stating to the effect that they are submitting the case without
any brief, said complainant having filed a brief in her behalf; and that they are
of the opinion that the order of the lower court dismissing the case was well
taken. In view of this manifestation, defendant-appellee presented, on
September 7, 1964, a motion to dismiss the appeal.

This Court, by resolution dated October 2, 1964, denied said motion for the
present.

Defendant-appellee moved to reconsider said denial but this Court, in its

resolution of October 21, 1964, overruled the defendant's motion.1äwphï1.ñët

Thereafter, said defendant-appellee filed her brief and the case was submitted
for decision.

The only issue presented for determination in this appeal is the effect of this
Court's ruling on the first appeal to this very same case (L-13027) and whether
the decision in the later case of People vs. Coquia, G.R. No. L-15456, June 29,
1963, warrants the dismissal of the information in the case at bar on the ground
of prescription.

Suffice it to say that our ruling in Case L-13027, rendered on the first appeal,
constitutes the law of the case, and, even if erroneous, it may no longer be
disturbed or modified since it has become final long ago. A subsequent
reinterpretation of the law may be applied to new cases but certainly not to an
old one finally and conclusively determined (People vs. Pinuila, G.R. No. L-11374,
May 30, 1958; 55 O.G. 4228).

'Law of the case' has been defined as the opinion delivered on a former
appeal. More specifically, it means that whatever is once irrevocably
established as the controling legal rule of decision between the same parties in
the same case continues to be the law of the case, whether correct on general
principles or not, so long as the facts on which such decision was predicated
continue to be the facts of the case before the court. (21 C.J.S. 330). (cited in
Pinuila case, supra)

As a general rule a decision on a prior appeal of the same case is held to be the
law of the case whether that decision is right or wrong, the remedy of the party
being to seek a rehearing (5 C.J.S. 1277). (also cited in Pinuila case)
It is also aptly held in another case that:

It need not be stated that the Supreme Court, being the court of last resort, is
the final arbiter of all legal question properly brought before it and that its
decision in any given case constitutes the law of that particular case. Once its
judgment becomes final it is binding on all inferior courts, and hence beyond
their power and authority to alter or modify. (Kabigting vs. Acting Director of
Prisons, G.R. No. L-15548, October 30, 1962).

More categorical still is the pronouncement of this Court in Pomeroy vs. Director
of Prisons, 1,14284-85, February 24, 1960:

It will be seen that the prisoner's stand assumes that doctrines and rulings of the
Supreme Court operate retrospectively, and that they can claim the benefit of
decisions in People vs. Hernandez; People vs. Geronimo, and People vs.
Dugonon (L-6025-26, July 18, 1956; L-8936, Oct. 31, 1956; and L-8926, June 29,
1957, respectively), promulgated four or more years after the prisoner applicants
had been convicted by final judgment and started serving sentence. However,
the rule adopted by this Court (and by the Federal Supreme Court) is that
judicial doctrines have only prospective operation and do not apply to cases
previously decided (People vs. Pinuila, L-11374, promulgated May 30, 1958.)

In the foregoing decision, furthermore, this Court quoted and reiterated the rule
in the following excerpts from People vs. Pinuila, G.R. No. L-11374, jam cit.:

'The decision of this Court on that appeal by the government from the order of
dismissal, holding that said appeal did not place the appellants, including
Absalon Bignay, in double jeopardy, signed and concurred in by six justices as
against three dissenters headed by the Chief Justice, promulgated way back in
the year 1952, has long become the law of the case. It may be erroneous,
judged by the law on double jeopardy as recently interpreted by this same
Tribunal. Even so, it may not be disturbed and modified. Our recent
interpretation of the law may be applied to new cases, but certainly not to an
old one finally and conclusively determined. As already stated, the majority
opinion in that appeal is now the law of the case.'

The same principle, the immutability of the law of the case notwithstanding
subsequent changes of judicial opinion, has been followed in civil cases:

Fernando vs. Crisostomo, 90 Phil. 585;

Padilla vs. Paterno, 93 Phil. 884;
Samahang Magsasaka, Inc. vs. Chua Guan, L-7252, February, 1955.

It is thus clear that posterior changes in the doctrine of this Court can not
retroactively be applied to nullify a prior final ruling in the same proceeding
where the prior adjudication was had, whether the case should be civil or
criminal in nature.
Analysis of the precedents on the issue of prescription discloses that there are
two lines of decisions following differing criteria in determining whether
prescription of crimes has been interrupted. One line of precedents holds that
the filing of the complaint with the justice of the peace (or municipal judge)
does interrupt the course of the prescriptive term: People vs. Olarte L-13027,
June 30, 1960 and cases cited therein; People vs. Uba, L-13106, October 16,
1959; People vs. Aquino, 68 Phil. 588, 590. Another series of decisions declares
that to produce interruption the complaint or information must have been filed
in the proper court that has jurisdiction to try the case on its merits: People vs.
Del Rosario, L-15140, December 29, 1960; People vs. Coquia, L-15456, June 29,
1963.
In view of this diversity of precedents, and in order to provide guidance for
Bench and Bar, this Court has reexamined the question and, after mature
consideration, has arrived at the conclusion that the true doctrine is, and should
be, the one established by the decisions holding that the filing of the complaint
in the Municipal Court, even if it be merely for purposes of preliminary
examination or investigation, should, and does, interrupt the period of
prescription of the criminal responsibility, even if the court where the complaint
or information is filed can not try the case on its merits. Several reasons buttress
this conclusion: first, the text of Article 91 of the Revised Penal Code, in declaring
that the period of prescription "shall be interrupted by the filing of the complaint
or information" without distinguishing whether the complaint is filed in the court
for preliminary examination or investigation merely, or for action on the merits.
Second, even if the court where the complaint or information is filed may only
proceed to investigate the case, its actuations already represent the initial step
of the proceedings against the offender. Third, it is unjust to deprive the injured
party of the right to obtain vindication on account of delays that are not under
his control. All that the victim of the offense may do on his part to initiate the
prosecution is to file the requisite complaint.

And it is no argument that Article 91 also expresses that the interrupted

prescription " shall commence to run again when such proceedings terminate
without the accused being convicted or acquitted", thereby indicating that the
court in which the complaint or information is filed must have power to acquit or
convict the accused. Precisely, the trial on the merits usually terminates in
conviction or acquittal, not otherwise. But it is in the court conducting a
preliminary investigation where the proceedings may terminate without
conviction or acquittal, if the court should discharge the accused because
no prima facie case has been shown.
Considering the foregoing reasons, the Court hereby overrules the doctrine of
the cases of People vs. Del Rosario L-15140, December 29, 1960; and People vs.
Coquia, L-15456, promulgated June 29, 1963.

And it having been finally decided in the previous appeal that the criminal
action here was not barred, the issue of prescription is utterly foreclosed, and all
that remains is to try and decide the case on the merits. It is expected that it will
be done with the utmost dispatch, this case having been already pending for
many years.

Wherefore, the appealed order of dismissal is hereby set aside and reversed,
and the records of this case ordered remanded to the lower court for further
proceedings conformably with this decision. With costs against defendant-
appellee.

Concepcion, C.J., Dizon, Regala, Makalintal, Bengzon, J.P., Zaldivar, Sanchez

and Castro, JJ., concur.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-10297 March 11, 1916
m

AGAPITO BONZON, plaintiff-appellee,

vs.
THE STANDARD OIL COMPANY OF NEW YORK, ET AL., defendants.
THE STANDARD OIL COMPANY OF NEW YORK, appellant.

Lawrence, Ross and Block for appellant.

Perfecto J. Salas Rodriguez for appellee.
CARSON, J.:

All the real questions raised by this appeal were decided in our opinion and
judgment entered in this case when it was here before upon a ruling sustaining a
demurrer to the complaint.

The doctrine therein announced must be held to be the law of this case and
under that doctrine the judgment entered in the court below should be affirmed
with the costs of this instance against the appellant. So ordered.
Arellano, C. J., Torres and Araullo, JJ., concur.

Separate Opinions
JOHNSON, J., dissenting:

This action was commenced in the Court of First Instance of the Province of
Cavite, on the 19th day of November, 1912. Its purpose was to recover of the
defendants the sum of P2,160, with legal interest from the month of December,
1909, and costs.

The defendant, the Standard Oil Company, presented a demurrer to the

complaint, which was later overruled. Whereupon the said defendant, the
Standard Oil Company, presented its answer.
After hearing the evidence adduced during the trial of the cause, the lower
court reached the conclusion that the defendant, the Standard Oil Company,
was liable to the plaintiff in the sum of P2,160 and rendered a judgment in favor
of the plaintiff and against the said defendant for said sum, with interest from
the 31st of December, 1909, with costs. From that judgment the Standard Oil
Company appealed to this court.

From an examination of the record, the following facts appear to be

established, beyond question:
First. That in the month of November, 1909, the Standard Oil Company of New
York obtained a judgment against one Alipio Locso.
Second. That in the month of November, 1909, an execution was issued upon
said judgment, in favor of the Standard Oil Company against the said Alipio
Locso.

Third. That said writ of execution was placed in the ands of the defendant,
Leonardo Osorio, as sheriff of the Province of Cavite, for the execution of said
judgment.

Fourth. That on the 3d and 9th days of November, 1909, by virtue of said
execution, the defendant, Leonardo Osorio, attached seven parcels of land
particularly described in the second paragraph of the complaint in the present
action. The said property was attached as the property of Alipio Locso.

Fifth. That on the 23d of December, 1909, the said property was sold at public
auction, to the plaintiff, Agapito Bonzon, for P2,160.

Sixth. That after the said attachment was issued and before the sale of the
property in question at public auction, Felix Cuenca, Pablo Cuenca, and others,
served written notice upon the defendant, Leonardo Osorio, as sheriff, that the
property which he had attached as the property of Alipio Locso, was not the
property of the said Locso, but belonged to them.

Seventh. That, notwithstanding the notice of the said Felix Cuenca and others,
relating to the ownership of the land in question, the defendant, Leonardo
Osorio, continued the attachment and on the 23d of December, 1909, sold said
property to the plaintiff herein.

Eigth. That later, and after said sale, the plaintiff herein took possession of the
parcels of land in question, which he had purchased at public sale, as above
described.
Ninth. That on the 31st of December, 1909, the said Leonardo Osorio, as sheriff,
delivered the said P2,160, the sum received in the sale of the said land, to
Kincaid and Hurd, as attorneys of the Standard Oil Company of New York.

Tenth. That in the month of March, 1910, the said Felix Cuenca, Pablo Cuenca,
and others, commenced an action in the Court of First Instance of the Province
of Cavite, for the recovery of the possession of the land in question, from the
plaintiff herein; that on the 29th of March, 1912, the judge of the Court of First
Instance of the Province of Cavite, rendered a judgment in favor of the said
Felix Cuenca et al., and against the said Agapito Bonzon, ordering the latter to
deliver to the former the possession of the land in question.

Eleventh. That on the 19th of March, 1912, the present action was commenced
by the plaintiff against the defendants for the purpose of recovering the sum of
P2,160, at the conclusion of which the judgment above mentioned was
rendered and the defendant appealed to this court.

No claim was made either in the lower court or here that the defendant, in any
way, participated in the alleged illegal sale of the property sold under said
execution. There is no claim made by any of the parties that the purchaser was
evicted from the property sold, in consequence of any irregularity in the
proceedings concerning the sale of the same. (Sec. 470, Act No. 190). There is
no claim that there was any irregularity in the proceedings, for which the
defendant was, in any way, responsible. In fact, no charge of any irregularity is
made, except the fact that the sheriff sold the property of one man for the
purpose of paying the debt of another.

The question presented to this court by the appellant is one of law only. When
the right, title, and interest, of a judgment debtor to the possession of property
sold by the sheriff are brought into question and it later develops that the
judgment debtor had no right, title or interest in the property sold, and there are
no irregularities in the proceedings concerning the sale, can the purchaser,
upon being evicted, recover the purchase price from the judgment creditor? In
case there are no irregularities, is the judgment creditor responsible for any
illegal act on the part of the sheriff? Is not the sheriff responsible, together with
his bondsmen, for any illegal act which he commits?

Section 470 of Act No. 190 was taken almost verbatim from section 708 of the
California Code of Civil Procedure. Said section 470 gives the purchaser of real
property at a judicial sale an action against the judgment creditor for the
purchase price, when he has been evicted —

(a) In consequence of irregularities in the proceedings concerning the sale; or

(b) of the reversal or discharge of the judgment.

The same article allows a revival of the judgment in the name of the purchaser,
if the purchaser has failed to recover possession in consequence of irregularities
in the proceedings concerning the sale, or because the property sold was not
subject to execution and sale. The only irregularity complained of in the present
case is that "the property sold was not subject to execution and sale." That fact
is apparently not denied.

The lower court held that a lack of right, title or interest on the part of the
judgment debtor in the property sold was an irregularity in the proceedings
concerning the sale and that the purchaser might pursue his remedy under
section 470 of Act No. 190.

This court, in a former decision upon the demurrer, practically decided that a
sale of the right, title, and interest of the judgment debtor in property wherein he
had no right, title, or interest, gives rise to an action such as the present, and
held that such a sale was an irregularity. (No. 8851, Bonzon vs. Standard Oil Co.
and Osorio, 27 Phil. Rep., 141.)
I cannot give my consent to that doctrine.
The former decision of this court referred to above is based largely upon a
consideration of a similar provision found in the Code of Civil Procedure of
California. The supreme court of the State of California itself has interpreted said
section 708. It has held said section to be remedial and that it should be liberally
construed. (Cross vs. Zane, 47 Cal., 602; Hitchcock vs. Caruthers, 100 Cal., 100;
Merguire vs. O'Donnell, 139 Cal., 6.)

In none of these cases, however, has the supreme court of California gone so
far as to hold that the purchaser at a sheriff's sale may recover from the
judgment creditor, in case the title fails, unless there has been some irregularity
in the proceedings concerning the sale.
In numerous cases the supreme court of California has held, under section 708,
that the purchaser might have the judgment revived in his favor because "the
property was not subject to execution and sale." (Hitchcock vs. Caruthers, 100
Cal., 100.) This court, however, in its former decision repudiated the reasoning
given by the supreme court of California in said decision. The former decision of
the court was based largely upon the decision in the case of Merguire vs.
O'Donnell (139 Cal., 6). In that case, however, the "irregularity in the proceedings
concerning the sale" was the fact that the execution itself was void, and it, in no
way, involved the question of the quantity of the right, title, or interest which the
judgment debtor possessed in the land sold. The court said, at page 8:

We think a sale made by a sheriff on an order of the court and a void execution
by 'irregular,' in the extreme degree, and that a sale had on a void execution is
void for the reason of `irregularity in the proceedings concerning the sale.'

It must be noted that in the above case the action was for a revival of the
judgment and was not an action against the judgment creditor.

We have been unable to find a single case in the State of California interpreting
said section or any case of general authority, which gives the purchaser at an
execution sale a right of action against the judgment creditor, solely on the
ground that the judgment debtor had no right, title or interest in the property
sold, except perhaps in a case where the judgment creditor was himself the
purchaser of the property at said execution sale.
In the case of Boggs vs. Fowler (16 Cal., 559; 76 Am. Dec., 561), the court said:

The doctrine of caveat emptor applies only to sales made upon valid
judgments, and is usually invoked with reference to sales upon execution issued
against the general property of the judgment debtor. (Smith vs. Painter, 5 Serg.
and R., 225; 9 Am. Dec., 344.) In these latter cases, a defect of title is no ground
for interference with the sale, or a refusal to pay the price bid. The purchaser
takes upon himself all the risks as to the title, and bids with full knowledge that in
any event he only acquires such interest as the debtor possessed at the date of
the levy or the lien of the judgment; and that he may, possibly, acquired
nothing.
In the case of Braham vs. Mayor (24 Cal., 585), the court said:

Against the plaintiffs' claim to be reimbursed the amount paid at the sheriff's
sale, by reason of the failure of the title which they purchased, and their right to
maintain this, an independent action therefor, the case of Boggs vs. Fowler (16
Cal., 559, 562) seems to be conclusive.

In the case of Meherin vs. Saunders (131 Cal., 681), the court said, "for the rule
of caveat emptor applies to execution sales." This doctrine, however, is not
universal as will be seen by an examination of the decisions of the various states.

In the case of Goodbar, White & Co. vs. Daniel (88 Ala., 583), the purchaser at a
sheriff's sale was seeking relief because of a failure of title in the judgment
debtor. The court discussed at some length the doctrine of caveat emptor on
execution sales, and concludes:
The officer sells, and the purchaser buys (not the thing itself, but) the real or
supposed right which the defendant in execution has to it; and the purchaser
operates precisely the same as if he had bargained for and obtained a
quitclaim. . . . The basis of the whole doctrine is the rule of caveat emptor, which
is the established and well understood rule of sheriff's sales. This rule puts every
holder upon inquiry as to the defendant's title. It proclaims to the purchaser that
there is no warranty of title, and if he buys, he must do so at his own risk. It warns
him to go and inquire before purchasing; so that, if he makes a poor bargain, by
parting with his money without getting anything in return for it, he must enter no
complaint — no more than if he had bargained for and obtained a mere
quitclaim deed. In the language of Chief Justice Gibson in Freeman vs.
Caldwell (10 Watts [Pa.], 9): `The plaintiff's case may be a hard one, but it is not
more so than would be the case of a stranger; and to say that every sheriff's
vendee, who is deprived of the property by title paramount, shall have his
money again, would destroy all confidence in the stability of judicial sales.' . . . 'If
this was not the law, an execution, which is the end of the law, would only be
the commencement of a new controversy.'
In the case of Smith vs. Painter (5 Serg. & R., 223; 9 Am. Dec., 344), the court said:

The sale by sheriff excludes all warranty. The purchaser takes all risk. He buys on
his own knowledge and judgment. Caveat emptor applies in all its force to him.
If this were not the law, an execution, which is the end of the law, would only be
the commencement of a new controversy; the creditor kept at bay during a
series of suits, before he could reap the fruits of his judgment and execution.

In the case of McGhee vs. Ellis (4 Litt. [Ky.], 244; 14 Am. Dec., 124) the action was
by the purchaser against the judgment creditor, because there was no title in
the judgment debtor. The court said:

Where a sheriff, on execution, sells the property of a stranger without the

creditor's authority or knowledge, and the true owner afterwards recovers the
property, the creditor is not liable at law or in equity to refund the purchaser his
money; but the sheriff, himself, is liable; and the judgment-debtor, though not
liable at law, unless he was accessory to the taking of the property, is liable in
equity, because the purchaser has discharged so much of his debt.
In the case of Dunn vs. Frazier (8 Blackford's Rep., 432), the court said:

If land be sold on execution and the creditor receive the purchase-money, the
purchaser cannot, either at law or in equity, recover back the money from the
creditor, merely because the debtor had no title to the land.

But the debtor is in such case liable to the purchaser, in equity, for the purchase-
money. (Freeman on Void Judicial Sales, 168.)

In view of the foregoing practically universal doctrine established by the courts,

and in view of the provisions of section 470 of Act No. 190, the purchaser of land
sold under an execution, has a remedy only against the judgment creditor when
there has been some irregularity in the proceedings concerning the sale. Said
section does not apply to a case where the only irregularity is that the sheriff has
levied upon the property of one person to pay the debt of another. In the
present case the judgment was regular. The writ of execution was valid. The
judgment creditor was in no way responsible for the manner in which the sheriff
attempted to satisfy the judgment through the writ of execution. This court has
held, in numerous cases, that the sheriff, when he levies upon and sells the
property of one person to pay the debt of another, is himself liable, together
with his bondsmen. In the present case the judgment creditor has committed no
wrong. If any wrong was committed, it was committed by the officers of the law.
The law makes them liable. His right should not be defeated by the malfeasance
of others, especially until it is proven and the fact established, beyond
peradventure, that there existed some irregularities, with which the judgment
creditor could be charged.

It seems clear to me that the judgment of the lower court should be reversed
and it should be so ordered.
THIRD DIVISION
July 17, 2017
G.R. No. 207684

PHILTRANCO SERVICE ENTERPRISES, INC., AND/OR JOSE PEPITO ALVAREZ ARSENIO

YAP AND CENTURION SOLANO, Petitioners
vs.
FRANKLIN CUAL, NOEL PORMENTO, RAMIL TIMOG, WILFREDO PALADO, ROBERTO
VILLARAZA, JOSE NERIO ARTISTA, CESAR SANCHEZ, RENERIO MATOCINOS,
VALENTINO SISCAR, LARRY ACASIO, GERARDO NONATO, JOSE SAFRED, JUAN
LUNA, GREGORIO MEDINA, NESTOR ZAG ADA, FRANCISCO MIRANDA, LEON
MANUEL VILLAFLOR, RODOLFO NOLASCO, REYNALDO PORTES, GERARDO
CALINYAO, LUTARDO DAYOLA, VICENTE BALDOS, ROGELIO MEJARES, RENIE SILOS
AND SERV ANDO PETATE, Respondents
DECISION
TIJAM, J.:

This is a Petition for Review on Certiorari under Rule 45 assailing the

Decision1 dated November 9, 2012 of the Court of Appeals (CA) in CAG. R. SP
No. 123587, as well as its June 11, 2013 Resolution2 denying reconsideration
thereof. The CA reinstated the Labor Arbiter's finding that petitioner Philtranco
Service Enterprises, Inc. (Philtranco) illegally dismissed the respondents, who
were drivers, conductors, and maintenance personnel of Philtranco.

At the outset, the present petition stemmed from a refiled case before the labor
arbiter. The respondents in the present case failed to sign the verification page
of the earlier filed position paper and their names were not mentioned in the
board resolution authorizing the filing of the complaint, which caused their
exclusion from the case.
The Antecedents

Respondents were all members of Philtranco Workers Union - Association of

Genuine Labor Organization (PWU-AGLO). They were all included in a
retrenchment program embarked on by Philtranco in the years 2006 to 2007, on
the ground that Philtranco was suffering business losses. Consequently, PWU-
AGLO filed a Notice of Strike with the Department of Labor and Employment
(DOLE), claiming that Philtranco engaged in unfair labor practices. The case
was docketed as NCMB-NCR Case No. NS-02- 028-07.

The parties were unable to settle their differences, thus the case was eventually
referred to the Office of the Secretary of the DOLE and docketed as Case No.
OS-VA-2007-008.

On June 13, 2007, Acting DOLE Secretary Danilo P. Cruz issued a Decision
ordering Philtranco to:

1. REINSTATE to their former positions, without loss of seniority rights, the ILLEGALLY
TERMINATED 17 "union officers", xxx, and PAY them BACKW AGES from the time
of termination until their actual or payroll reinstatement, provided in the
computation of backwages [those] among the seventeen (17) who had
received their separation pay (sic) should deduct the payments made to them
from the backwages due them.

2. MAINTAIN the status quo and continue in full force and effect the terms and
conditions of the existing CBA - specifically, Article VI on Salaries and Wages
(commissions) and Article XI, on Medical and Hospitalization - until a new
agreement is reached by the parties; and
3. REMIT the withheld union dues to PWU-AGLO without unnecessary delay.

The PARTIES are enjoined to strictly and fully comply with the provisions of the
existing CBA and the other dispositions of this Decision.
SO ORDERED.3

The respondents alleged that they were not absorbed by Philtranco despite the
fact that the company was hiring new employees; thus, the respondents,
together with other Philtranco employees, filed a labor complaint for illegal
dismissal on October 16, 2007, and prayed for reinstatement, backwages and
wage differentials. Docketed as NLRC NCR Case No. 00-10-11607-07 (first NLRC
case), the complaint essentially assailed the employees' inclusion in the
retrenchment program of Philtranco.4

In March 25, 2008 Decision, Labor Arbiter (LA) Antonio Macam found union
president Jose Jessie Olivar (Olivar) to have been illegally dismissed and was
entitled to reinstatement, backwages and attorney's fees. The present
respondents' claims, however, were dismissed for their failure to sign the
verification and certification of non-forum shopping of the complaint and
position paper; the latter was signed only by Olivar without specific authority
from the board.5
Respondents' appeal to the National Labor Relations Commission (NLRC), on the
matter of their exclusion, was unsuccessful. So was their subsequent petition
before the CA in CA-G.R. SP No. 1104106 , which attained finality on May 14,
2010. Thus, they remained excluded from the award.

Significantly, the LA, as affirmed by the NLRC and the CA in CAG. R. SP No.
110410, found the retrenchment program undertaken by Philtranco in the years
2006 to 2007 as invalid for failure to sufficiently prove its necessity, considering
that the audited financial statements for those years were not presented. On this
basis, Olivar was declared to have been illegally dismissed.

On the belief that the dismissal of their claims due to a technicality was without
prejudice to their refiling of the same complaint, the respondents filed NLRC-
NCR Case No. 06-08130-10 (second NLRC case).7 This time, Philtranco submitted
its audited financial statements for the years 2006 and 2007.

On April 15, 2011, Labor Arbiter Quintin Cueto III (LA Cueto) rendered a decision
finding respondents to have been illegally dismissed. In so deciding, LA Cueto
applied the law of the case principle, stating that the first NLRC case is binding
upon Philtranco. The dispositive portion of LA Cueto's April 15, 2011 decision
reads:
WHEREFORE, premises considered, respondents are hereby declared guilty of
illegal dismissal and ordered to reinstate complainants immediately to their
former positions and to pay them, jointly and severally, full backwages from
date of dismissal until actual reinstatement plus their 13t1i month pay and
attorney's [fees] equivalent to 10% of all the monetary award computed as
follows:
xxx

COMPLAINANTS, who had received their separation pay should be deducted

(sic) from the amount of backwages due them.
SO ORDERED.8

When Philtranco appealed LA Cueto's decision to the NLRC, the commission

reversed and set aside LA Cueto's decision on September 15, 2011. Unlike LA
Cueto, the commission gave weight to the audited financial statements for the
years 2006 and 2007 submitted by Philtranco in the refiled case, but which was
not presented in the prior case. The NLRC also disagreed with LA Cueto's
application of the law of the case in the refiled complaint, stating that the
principle applies only to Olivar.9

Respondents' motion for reconsideration before the NLRC was denied on

December 13, 2011. Hence, they assailed the reversal via a petition
for certiorari before the CA, which thereafter reinstated LA Cueto's
decision.10 The CA reasoned that the supervening event is inapplicable in the
present case and agreed with LA Cueto that it is inappropriate to consider the
belatedly filed audited financial statements for the years 2006 and 2007.

Aggrieved by the denial of its motion for reconsideration, Philtranco timely filed
the present Petition for Review on Certiorari under Rule 45 raising the following
issues:
I. The Court of Appeals committed reversible error when it ruled that the
retrenchment was invalid and the respondents were illegally dismissed[;]
II. The Court of Appeals committed reversible error when it ruled that the "law of
the case" applied to respondents' "refiled" labor claim in 2010[; and]

III. The Court of Appeals committed reversible error when it ruled that individual
petitioners Jose Pepito Alvarez, Arsenio Yap and Centurion Solano were jointly
and severally liable for payment of backwages and other awards.11

The threshold issue for resolution is whether or not the CA correctly applied the
principle of the law of the case in the second NLRC complaint.

We find the law of the case doctrine not applicable in the cases under
consideration.

The doctrine has been defined as "that principle under which determinations of
questions of law will generally be held to govern a case throughout all its
subsequent stages where such determination has already been made on a prior
appeal to a court of last resort. It is merely a rule of procedure and does not go
to the power of the court, and will not be adhered to where its application will
result in an unjust decision. It relates entirely to questions of law, and is confined
in its operation to subsequent proceedings in the same case." (emphasis ours )12
The second NLRC case is certainly not a continuation of the first NLRC case from
which respondents were excluded. It is a separate case instituted anew by
respondents because the prior case was only given due course with respect to
the parties who signed the complaint and position paper.

Furthermore, the matter of whether or not Philtranco sufficiently proved its

alleged business losses when it embarked on its retrenchment program is a
question of fact and not a question of law. The appellate court's finding then in
CA-G.R. SP No. 110410, that the retrenchment undertaken by Philtranco in 2006-
2007 was invalid, may not be invoked as the law of the case.

With respect to the DOLE Secretary's decision finding the retrenchment invalid in
the NCMB case, the issue that reached the CA via CA-G.R. SP No. 100324 and
this Court in G.R. No. 180962 was confined only to the correct remedy against
the DOLE Secretary's decision, i.e., whether it should be Rule 43 or Rule 65. This
Court remanded the case to the CA on February 26, 2014, where it is still
pending decision.

While the second NLRC case is separate from the first NLRC case and the NCMB
case, it is not altogether accurate to say that the determinations made in these
previously decided cases has no bearing on the second NLRC case.

We hold that the LA's decision in the first NLRC case, finding Philtranco's
retrenchment program to be illegal, constitutes res judicata in the concept of
collateral estoppel or issue preclusion. As amply discussed in Degayo v.
Magbanua-Dinglasan, et al.:13

Res judicata literally means "a matter adjudged; a thing judicially acted upon or
decided; a thing or matter settled by judgment." It also refers to the "rule that a
final judgment or decree on the merits by a court of competent jurisdiction is
conclusive of the rights of the parties or their privies in all later suits on points and
matters determined in the former suit. It rests on the principle that parties should
not to be permitted to litigate the same issue more than once; that, when a
right or fact has been judicially tried and determined by a court of competent
jurisdiction, or an opportunity for such trial has been given, the judgment of the
court, so long as it remains unreversed, should be conclusive upon the parties
and those in privity with them in law or estate.
xxxx

The doctrine of res judicata is set forth in Section 4 7 of Rule 39 of the Rules of
Court, which in its relevant part reads:

Sec. 47. Effect of judgments or final orders. - The effect of a judgment or final
order rendered by a court of the Philippines, having jurisdiction to pronounce
the judgment or final order, may be as follows:
xxxx

(b) In other cases, the judgment or final order is, with respect to the matter
directly adjudged or as to any other matter that 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 proceeding,
litigating for the same thing and under the same title and in the same capacity;
and

(c) In any other litigation between the same parties or their successors in interest,
that only is deemed to have been adjudged in a former judgment or final order
which appears upon its face to have been so adjudged, or which was actually
and necessarily included therein or necessary thereto.
This provision comprehends two distinct concepts of res judicata:
(1) bar by former judgment and (2) conclusiveness of judgment.

The first aspect is the effect of a judgment as a bar to the prosecution of a

second action upon the same claim, demand or cause of action. In traditional
terminology, this aspect is known as merger or bar; in modem terminology, it is
called claim preclusion.

The second aspect precludes the relitigation of a particular fact of issue in

another action between the same parties on a different claim or cause of
action.1âwphi1 This is traditionally known as collateral estoppel; in modern
terminology, it is called issue preclusion.

Conclusiveness of judgment finds application when a fact or question has been

squarely put in issue, judicially passed upon, and adjudged in a former suit by a
court of competent jurisdiction. The fact or question settled by final judgment or
order binds the parties to that action (and persons in privity with them or their
successors-ininterest), and continues to bind them while the judgment or order
remains standing and unreversed by proper authority on a timely motion or
petition; the conclusively settled fact or question furthermore cannot again be
litigated in any future or other action between the same parties or their privies
and successors-in-interest, in the same or in any other court of concurrent
jurisdiction, either for the same or for a different cause of action. Thus, only the
identities of parties and issues are required for the operation of the principle of
conclusiveness of judgment.

While conclusiveness of judgment does not have the same barring effect as that
of a bar by former judgment that proscribes subsequent actions, the former
nonetheless estops the parties from raising in a later case the issues or points that
were raised and controverted, and were determinative of the ruling in the
earlier case. In other words, the dictum laid down in the earlier final judgment or
order becomes conclusive and continues to be binding between the same
parties, their privies and successors-in-interest, as long as the facts on which that
judgment was predicated continue to be the facts of the case or incident
before the court in a later case; the binding effect and enforceability of that
earlier dictum can no longer be re-litigated in a later case since the issue has
already been resolved and finally laid to rest in the earlier case.14

It is beyond dispute that the determination on the invalidity of the retrenchment

in the first NLRC case has attained finality. Moreover, records show that the
decision was adjudicated on the merits.

We likewise find that there is a community of interest among the complainants in

the prior labor case and in the present. Pertinently:
There is identity of parties where the parties in both actions are the same, or
there is privity between them, or they are successors-in-interest by title
subsequent to the commencement of the action, litigating for the same thing
and under the same title and in the same capacity. Absolute identity of parties
is not required, shared identity of interest is sufficient to invoke the coverage of
this principle. Thus, it is enough that there is a community of interest between a
party in the first case and a party in the second case even if the latter was not
impleaded in the first case.

xxx One test to determine substantial identity of interest would be to see

whether the success or failure of one party materially affects the other.15

In both the first and second NLRC cases, the issue of whether or not
complainants were illegally dismissed is hinged on the validity of Philtranco's
retrenchment program in 2006 and 2007. Without a doubt, the interests of all the
complainants are inextricably intertwined on that factual question.

The only difference between the first NLRC case and the second NLRC case is
Philtranco's submission of its audited financial statements for the years 2006 and
2007 in the second NLRC case. The NLRC treated such belated submission as a
"supervening event". We, however, agree with the CA that the supervening
event principle does not apply in this case. It correctly ratiocinated:

xxx Supervening events refer to facts which transpire after judgment has
become final and executory or to new circumstances which developed after
the judgment has acquired finality, including matters which the parties were not
aware of prior to or during the trial as they were not yet in existence at that time.
In this case, the Audited Financial Statements could not be considered as a
supervening event because the existence thereof should have been established
as early as February 2007, the time when the retrenchment of petitioners was
effected. Unfortunately, respondents failed to present the same.16

Contrary to Philtranco's stance that there was no belated filing of the audited
financial statements since this is a newer and different case, the factual milieu
prevailing at the time the retrenchment was effected is still the same one under
consideration. The CA cannot, thus, be faulted for concluding that at the time
the retrenchment program was effected in February 2007, Philtranco had no
basis and was in fact unaware of the true state of its finances. This, coupled with
the records annexed to the case showing that Philtranco hired new employees
for the years 2006 to 2010, were taken to belie Philtranco's claim that it exercised
the retrenchment of respondents in good faith.17

Finally, on the issue of whether or not the individual petitioners, Jose Pepito
Alvarez, Arsenio Yap and Centurion Solano, who are officers of Philtranco,
should be jointly and severally held liable with petitioner corporation, this Court
finds merit in petitioners' arguments. As pronounced in Lambert Pawnbrokers
and Jewelry Corporation v. Binamira18 the lack of authorized or just cause to
terminate one's employment and the failure to observe due process do not ipso
facto mean that the corporate officer acted with malice or bad faith. There
must be independent proof of malice or bad faith which is lacking in the present
case.
WHEREFORE, in view of the foregoing, the instant petition is DENIED and the
assailed decision and resolution, respectively, dated November 9, 2012 and
June 11, 2013, rendered by the Court of Appeals in CA-G.R. SP No. 123587
are AFFIRMED with the modification that petitioner Philtranco is held solely liable
for the illegal dismissal of the respondents.
Costs against the petitioner Philtranco.
SO ORDERED.

NOEL GIMENEZ TIJAM

Associate Justice