HON. CLEDERA V. HON. SARMIENTO
), together with a notice
J. MAKASIAR | PETITION FOR CERTIORARI
WITH A WRIT OF P.I.
FACTS:
1. PRs were employees of the provincial
government of Camarines Sur and paid
under the plantilla of personnel of the
road and bridge fund budget
2. The provincial board of the province of
Camarines Sur passed Resolution No.
176, series of 1968, which approved the
road and bridge fund budget of the
province for the fiscal year 1968-1969
and abolished the positions of herein
private residents, who as a consequence
filed Civil Cases Nos. 6591 and 6763
before the respondent Judge sitting at
Naga City for prohibition and/or
mandamus with damages seeking their
reinstatement and payment of back
salaries as well as the restoration of their
respective positions previously occupied
by them in the plantilla of personnel of
the road and bridge fund budget.
3. The parties, upon agreement (after PRE-
trial), agreed that the civil cases be
decided jointly
4. The parties were given five (5) days from
July 14, 1969 or until July 19, 1969 to
submit their respective memoranda,
after which the two cases would be
deemed submitted for decision
5. 7/18/69: PRs filed a motion to reopen the
case and to allow them to present
additional evidence consisting of the
budget and plantilla of personnel of the
road and bridge fund for the fiscal year
PS FILED AN OPPOSITION
6. Hon. Sarmiento denied PRs motion MR
(which motion does not contain any
notice at all setting the time, date and
place of hearing)
7. PRs filed a request addressed to the
clerk of court to set for hearing on
November 24, 1969 their aforesaid
motion for reconsideration dated
November 3, 1969, expressly stating
that a copy of the same was delivered to
the Provincial Fiscal that same day,
November 20, 1969 Sarmiento
required Ps to submit their opposition
within five days after receiving a copy of
the MR
8. Sarmiento set aside his first order
reopened the case and allowed PRs to
submit addtl. evidence
9. TC: rendered a decision in favour of
respondents
10. Decision was received by the Provincial
Fiscal on May 12, 1970
11. On June 8, 1970, the herein petitioners,
through Assistant Provincial Fiscal
Enrique A. Amador, filed a 15 page
motion dated June 6, 1970 for
reconsideration of the aforesaid decision
(pp. 41-55, rec.
of hearing (p. 56, rec.) address to the
clerk of court
12. Both the aforesaid motion for
reconsideration and said notice of
hearing were personally delivered to and
received on the same day June 8, 1970
by the counsel of herein respondents
whose office is in Naga City itself
13. PRs filed a motion for execution; ground:
questioned decision had already become
final (no appeal was interposed 30 days
after May 12)
14. Herein petitioners filed their opposition
dated June 17, 1970 to the aforesaid
motion for execution on the ground that
they had complied with Sec. 2 of Rule 37
in connection with Secs. 4, 5, and 6 of
Rule 15 of the Revised Rules of Court;
and that their motion for reconsideration
is considered as a motion for new trial
15. Respondent judge however granted PRs
motion for execution (the requirements
of Secs. 4, 5, and 6 of Rule 15 of the
Rules of Court are mandatory in relation
to See. 2 of Rule 37 of the Revised Rules
of Court)
16. Ps the filed an urgent motion for
reconsideration denied
a. R.J. admitted that the counsel for
herein petitioners so informed
him on June 8, 1970 of the desire
of the respondents members of
the provincial board to be heard
by themselves on the motion for
reconsideration (p. 127, rec.), to
which he replied "By all means",
believing then "that the motion
was in order"
FIRST ISSUE: RE: RJs act of granting PRs
motion: Assistant Provincial Fiscal Amador, as
counsel for herein petitioners, is already
estopped from questioning its validity for non-
compliance with Sections 4, 5 and 6 of Rule 15,
by reason of his failure to submit his opposition
to the said motion for reconsideration, despite
the fact that he was granted by the respondent
Judge in an order dated November 26, 1969,
five (5) days from receipt there of within which
to submit his opposition. Such failure to contest
the aforesaid motion dated November 3, 1969
for the reconsideration of the order dated
September 10, 1969 denying the motion of
herein private respondents for the re-opening of
the two cases constitutes abandonment or
waiver of the right on the part of herein
petitioners to challenge the validity of the said
motion for reconsideration and the consequent
order dated December 4, 1969 granting the
same, and such want of notice cannot he raised
for the first time on appeal, nor certiorar
SECOND ISSUE: WHETHER THE ORDER OF
EXECUTION. DATED JULY 17, 1970, THE
ORDER DATED JULY 29, 1970 DENYING
HEREIN PETITIONERS' MOTION FOR
RECONSIDERATION OF THE SAID ORDER OF
EXECUTION AND THE WRIT OF EXECUTION
DATED JULY 22, 1970 WERE VALIDLY
ISSUED
1. Hon. Sarmiento correctly rejected the
contention of herein petitioner that the
said notice of hearing substantially
complies with the aforementioned
provisions of the Rules of Court, invoking
the cases of Bath, Fulton, Magno,
Almacen and Sebastian, supra. All these
five cases decided in 1965, 1967, 1969
and 1970 and after the effectivity on
January 1, 1964 of the Revised Rules of
Court, reiterated the rule that the
requirements of Sections 4, 5, and 6 of
Rule 15 in relation to Section 2 of Rule 37
of the Revised Rules of Court are
mandatory and non-compliance
therewith renders any motion as a
useless scrap of paper, which does not
merit the attention of the court
2. The written notice referred to evidently
is that prescribed for motions in general
by Rule 15, sections 4 and 5 (formerly
Rule 26), which provide that such notice
shall state the time and place of hearing
and shall be served upon all parties
concerned at least three days in
advance. And according to Section 6 of
the same rule no motion shall be acted
upon by the court without proof of such
notice. Indeed it has been held that in
such a case the motion is nothing but a
useless piece of paper (PNB vs. Donasco
L-18638, Feb. 28, 1963, citing Manakil
vs. Revilla, 42 Phil. 81; Roman Catholic
Bishop of Lipa vs. Municipality of Unisan,
44 Phil. 866; Director of Lands vs. Sanz,
45 Phil. 117). The reason is
obvious, unless the movant sets the
time and place of hearing the court
would have no way to determine
whether that party agrees to or objects
to the motion, and if he objects, to hear
him on his objection, since the Rules do
not fix any period within which he may
file his reply or opposition.
3. The notice required by Section 2 of Rule
37 in relation to Sections 4, 5, and 6 of
Rule 15 is mandatory, and the failure to
give the same is fatal.
4. Sections 4 and 5 of Rule 15 require that
the notice shall be directed to the parties
concerned and shall state the time and
place for the hearing of the motion,
which notice shall also be served to all
parties concerned at least three (3) days
before the hearing thereof, together with
a copy of the motion and other
supporting documents. Section 4 of Rule
15 does not state that such notice shall
be directed to the clerk of court, much
less to the judge himself. Neither does it
allow that the notice shall be served any
time before or on the day of the hearing,
for the rule requires that the adverse
parties should be served with such
notice at least three days before the
hearing, to give them an opportunity to
contest the motion and be heard
thereon. There is no ambiguity nor
vagueness in the rules. Failure to give at
least three days notice prior to the
hearing vitiates the notice.
5. IN THE CASE AT BAR: as pointed out by
the respondent Judge, the notice of
hearing was addressed to the clerk of
court, not to the adverse parties. It did
not set the time and place of hearing. On
the contrary, from its tenor it was to be
submitted for the immediate resolution
of the court, without giving the adverse
party at least three (3) days to oppose
the motion for reconsideration of the
decision.
6. Assistant Provincial Fiscal Amador had
still three (3) days within which to cure
the very defective notice of hearing from
June 8, 1970, when he filed his motion of
the reconsideration of the decision until
June 11, 1970, when the 30-day period
of appeal expired and the decision
became final. But he miserably
neglected to do so, in spite of the fact
that in the afternoon of June 8, 1970,
respondent Atty. Nicanor E. Orio, a
member of the provincial board and one
of the herein petitioners, asked him to
request the clerk of court to set the
motion for hearing because the
respondent members of the provincial
board desired to argue their motion for
reconsideration by themselves, about
which desire he himself informed the
respondent Judge that same afternoon of
June 27,1970 on his urgent motion dated
July 22, 1970 for the reconsideration of
the order of execution dated July 17,
1970 (Annex U, pp. 124-127, rec.),
Assistant Provincial Fiscal Amador
admitted his negligence in not
submitting an appropriate notice of
hearing regarding his motion for
reconsideration of the decision as
required by Sections 4, 5, and 6 of Rule
15 in relation to Section 2 of Rule 37 of
the Revised Rules of Court. When he
recalled at said hearing on July 27, 1970
that he informed the respondent Judge
about the desire of the provincial board
members to argue their motion for
reconsideration of the decisions,
respondent Judge replied that his answer
to the aforesaid information was "by all
means", believing then "that the motion
was in oreder" and that he had no inkling
that the motion was defective
7. EXCEPTIONS TO STRICT CONSTRUCTION
(not applicable to the instant case: the
deficiency of the notice of hearing in the
 Matusa case was cured when the clerk of
court set the motion for hearing and the
court took cognizance of the motion on
the date set for hearing thereof by the
clerk of court; it is patent in the Canonoy
case that the failure on the part of
counsel to set the date of hearing of his
motion was not due to neglect or
negligence on his part but because he
could not do so as he did not know the
date or the month when the next yearly
section of the court in Pagadlian would
take place as there was no showing that
at the time he filed his motion the court
had already fixed the date for the next
term.
8. WHY IS IT INAPPLICABLE: It is evident
therefore that the circumstances which
compelled the court to regard the notice
of hearing in the Matusa case; as having
been remedied or which justified the
failure inability of the counsel in the
Canonoy case to fix a date for the
hearing of his motion, dip not obtain in
the instant case. Here, the clerk of court
did not set the motion of herein
petitioners for reconsideration of the
decision for hearing on a definite date,
much less did the respondent Judge take
cognizance of the said motion for
reconsideration. And the respondent
Judge holds hearing every business day
throughout the year in Naga City, unlike
the Judge in the Canonoy case.
ORDERS AFFIRMED.
CRUZ V. CA
J. CARPIO | RULE 45 PETITION
FACTS:
1. The City Prosecutor of Manila charged
petitioner with the crime of Estafa thru
Falsification of Public Document before
the Manila Regional Trial Court
2. Petitioner executed before a Notary
Public in the City of Manila an Affidavit of
Self-Adjudication of a parcel of land
stating that she was the sole surviving
heir of the registered owner when in fact
she knew there were other surviving
heirs. Since the offended party did not
reserve the right to file a separate civil
action arising from the criminal offense,
the civil action was deemed instituted in
the criminal case
3. The trial court rendered its decision
dated January 17, 1994 acquitting
petitioner on the ground of reasonable
doubt. In the same decision, the trial
court rendered judgment on the civil
aspect of the case, ordering the return to
the surviving heirs of the parcel of land
located in Bulacan
4. On January 28, 1994, petitioner received
a copy of the decision.
5. On February 10, 1994, petitioner filed by
registered mail a motion for
reconsideration dated February 7, 1994,
assailing the trial courts ruling on the
civil aspect of the criminal case.
Petitioner furnished the City Prosecutor a
copy of the motion by registered mail
DENIED there is nothing to show that
the Office of the City Prosecutor was
actually furnished or served with a copy
of the said Motion for Reconsideration
within the reglementary period of fifteen
(15) days from receipt by the accused on
January 28, 1994 of a copy of the Courts
decision dated January 17, 1994, so that
the same is already final and executory,
6. Petitioner moved for a reconsideration of
the trial courts order of April 18, 1994.
The trial court denied the same in an
order dated May 6, 1994
7. CA: denied due course to the petition
and dismissed the case for being
insufficient in substance; citing Sec. 10,
Rule 13, the CA held that from the
language of the said section is that in
case service is made by registered mail,
proof of service shall be made by (a)
affidavit of the person mailing and (b)
the registry receipt issued by the mailing
office. Both must concur. In the case at
bench, there was no such affidavit or
registry receipt when the motion was
considered
8. Hence, this petition GRANTED
When the accused is acquitted on reasonable
doubt but is adjudged civilly liable, his motion
for reconsideration of the civil aspect must be
served not only on the prosecution, also on the
offended party if the latter is not represented by
a private counsel. Moreover, if the trial court
has jurisdiction over the subject matter and
over the accused, and the crime was committed
within its territorial jurisdiction, it necessarily
exercises jurisdiction over all matters that the
law requires the court to resolve. This includes
the power to order the restitution to the
offended party of real property located in
another province.
WHETHER PETITIONERS MOTION FOR
RECONSIDERATION DATED FEBRUARY 7,
1994 COMPLIED WITH THE MANDATORY
REQUIREMENTS OF SECTION 6, RULE 15
ON PROOF OF SERVICE?
1. NO.
2. he Court has stressed time and again
that non-compliance with Sections 4, 5
and 6 of Rule 15 is a fatal defect. The
well-settled rule is that a motion which
fails to comply with Sections 4, 5, and 6
of Rule 15 is a useless piece of paper. If
filed, such motion is not entitled to
judicial cognizance and does not stop
the running of the reglementary period
for filing the requisite pleading
 3. SEC. 6, RULE 15: From the language of
the rule, proof of service is mandatory.
Without such proof of service to the
adverse party, a motion is nothing but
an empty formality deserving no judicial
cognizance.
4. SEC. 13, RULE 13: If service is by
registered mail, proof of service consists
of the affidavit of the person
mailing and the registry receipt, both
of which must be appended to the
motion. Absent one or the other, or
worse both, there is no proof of service.
In the instant case, an examination of
the record shows that petitioner received
a copy of the trial courts decision of
January 17, 1994 on January 28, 1994.
Within the reglementary period to
appeal, petitioner filed on February 10,
1994, by registered mail, a motion for
reconsideration. However, petitioner
failed to attach both the affidavit and
the registry receipt to the motion for
reconsideration as required by the Rules.
The defect of the motion is apparent on
its face. Petitioners motion for
reconsideration was a mere scrap of
paper as it did not contain the required
proof of service.
WHETHER THE PUBLIC PROSECUTOR IS
THE ONLY PROPER PARTY TO BE SERVED
WITH PETITIONERS MOTION FOR
RECONSIDERATION?
1. YES.
2. The present Rules do not require the
accused to serve a copy of his motion for
reconsideration on the offended party
who may not be represented by a private
counsel. The Rules require service only
on the public prosecutor if the
offended party is not represented
by a private counsel.
3. A judgment of acquittal is immediately
final and executory and the prosecution
cannot appeal the acquittal because of
the constitutional prohibition against
double jeopardy. However, either the
offended party or the accused may
appeal the civil aspect of the judgment
despite the acquittal of the accused. The
public prosecutor has generally no
interest in appealing the civil aspect of a
decision acquitting the accused.The
acquittal ends the work of the public
prosecutor and the case is terminated as
far as he is concerned. The real parties in
interest in the civil aspect of a decision
are the offended party and the accused.
4. THUS WITH RE: TO THE CIVIL ASPECT OF
THE CASE: any appeal or motion for
reconsideration of the civil aspect of a
decision in a criminal case must be
served on the other real party in interest.
If the offended party appeals or moves
for reconsideration, the accused is
necessarily served a copy of the
pleading through his counsel.
5. If the accused appeals or moves for
reconsideration, a lacuna arises if the
offended party is not represented by a
private counsel. In such a situation,
under the present Rules only the public
prosecutor is served the notice of appeal
or a copy of the motion for
reconsideration. To fill in this lacuna in
the present Rules, we require that
henceforth if the accused appeals or
moves for reconsideration, he should
serve a copy of his pleading on the
offended party himself if the latter is not
represented by a private counsel. This is
in addition to service on the public
prosecutor who is the counsel of record
of the State.
6. In the instant case, the Court notes that
petitioner did not serve a copy of her
motion for reconsideration on the
offended party who was not represented
by a private counsel in the trial court. In
the interest of justice, and considering
that the present Rules are silent on the
matter, it is only fair to give petitioner a
period of five days from receipt of this
decision within which to serve a copy of
her motion for reconsideration on the
offended party.
OTHER ISSUE: JURISDICTION: In the
instant case, the trial court had jurisdiction over
the subject matter as the law has conferred on
the court the power to hear and decide cases
involving estafa through falsification of a public
document. The trial court also had jurisdiction
over the offense charged since the crime was
committed within its territorial jurisdiction. The
trial court also acquired jurisdiction over the
person of accused-petitioner because she
voluntarily submitted to the courts authority.
Where the court has jurisdiction over the
subject matter and over the person of the
accused, and the crime was committed within
its territorial jurisdiction, the court necessarily
exercises jurisdiction over all issues that the law
requires the court to resolve. One of the issues
in a criminal case is the civil liability of the
accused arising from the crime. Article 100 of
the Revised Penal Code provides that [E]very
person criminally liable for a felony is also civilly
liable. Article 104 of the same Code states that
civil liability x x x includes restitution.
The action for recovery of civil liability is
deemed instituted in the criminal action unless
reserved by the offended party. [19] In the instant
case, the offended party did not reserve the
civil action and the civil action was deemed
instituted in the criminal action. Although the
trial court acquitted petitioner of the crime
charged, the acquittal, grounded on reasonable
doubt, did not extinguish the civil liability.
[20]
Thus, the Manila trial court had jurisdiction to
decide the civil aspect of the instant case -
ordering restitution even if the parcel of land is
located in Bulacan.
G.R. No. 163785 December 27, 2007
KKK FOUNDATIONVS. HON. ADELINA
CALDERON-BARGAS
FACTS:
1. On March 1, 2002, petitioner, filed a
complaint for Annulment of Extra-judicial
Foreclosure of Real Estate Mortgage
and/or Nullification of Sheriffs Auction
Sale and Damages with Prayer for the
Issuance of TRO and/or Writ of
Preliminary Injunction.
2. Petitioner alleged that: (1) the auction
sale was made with fraud and/or bad
faith since there was no public bidding;
(2) the sheriff did not post the requisite
Notice of Sheriffs Sale; (3) the petition
for extrajudicial foreclosure was fatally
defective since it sought to foreclose
properties of two different entities; (4)
the foreclosed properties were awarded
and sold to Imelda A. Angeles for an
inadequate bid of only P4,181,450; and
(5) the auction sale involved eight
parcels of land covered by individual
titles but the same were sold en masse.
3. On March 7, 2002, Judge Calderon-
Bargas issued TRO preventing Angeles
from consolidating her ownership to the
foreclosed properties. On even date,
petitioner and Angeles executed a
Compromise Agreement wherein
petitioner agreed to pay Angeles the bid
price of the eight parcels of land within
20 days. The parties then filed a Motion
to Approve Compromise Agreement.
4. On April 1, 2002, petitioner filed an
Urgent Ex-Parte Motion to Recall
Compromise Agreement since the other
property owner and other trustees of
petitioner were not consulted prior to the
signing of the agreement. Angeles
opposed the motion.
5. Judge Calderon-Bargas issued an Order
stating that Record shows that the
Urgent Ex-Parte Motion to Recall
Compromise Agreement and Motion to
Approve Compromise Agreement both
failed to comply with Sec[s]. 4 and 5,
Rule 15 of the Civil Procedure. Both
proceedings have no specific date of
hearing. The reason why the Motion to
Approve Compromise Agreement up to
now has not yet been acted upon was
that it has no date of hearing.Thus, these
are considered mere scrap[s] of paper.
6. The TC approved the Compromise
Agreement. Angeles then moved for the
issuance of a writ of execution.
7. The TC required petitioner to comment
on the motion within ten (10) days.
8. TC directed the Clerk of Court to issue a
writ of execution. On the same date, the
trial court received petitioners Motion
for Extension of Time to File Comment
with Entry of Appearance which was
denied on October 10, 2002.
9. Petitioner then moved for
reconsideration of the October 3, 2002
Order.
10.Petitioner came to the Court of Appeals
via petition for certiorari.
11.The CA denied the petition and ruled
that petitioner was not deprived of due
process when the trial court issued the
October 3, 2002 and the October 10,
2002 Orders since it was given sufficient
time to file its comment. The appellate
court did not rule on the second and
third issues after noting that petitioners
motion for reconsideration of the
October 3, 2002 Order had not yet been
resolved by the trial court. It did not
resolve the issues even after the trial
court denied petitioners motion for
reconsideration on December 12,
2003,11 ratiocinating that the trial
courts denial of petitioners motion for
reconsideration did not operate to
reinstate the petition because at the
time it was filed, petitioner had no cause
of action.Hence , this petition.
ISSUES: WON the trial court seriously erred: (1)
in issuing the October 3, 2002 and the October
10, 2002 Orders without awaiting petitioners
comment; (2) in granting the Motion for
Issuance of Writ of Execution although it lacked
the requisite notice of hearing; and (3) in
issuing the writ of execution since it varied the
tenor of the decision dated June 28, 2002.
HELD:
On the first issue, we note that in its
September 9, 2002 Order, the trial court gave
petitioner ten (10) days to file its comment to
Angeless Motion for Issuance of Writ of
Execution. While petitioner claims that it
received the Order only on September 21, 2002,
Angeles counters that petitioner received it on
September 12, 2002. We are more inclined to
believe Angeless allegation since the trial court
itself declared in its Order dated October 10,
2002 that the Order dated September 9, 2002
was personally served upon petitioner on
September 12, 2002.13 Thus, petitioner had
until September 22, 2002 within which to file its
comment or to request for an extension of time.
Consequently, petitioners motion for extension
and comment were not seasonably filed and
such procedural lapse binds petitioner.
Anent the second issue, a motion which does
not meet the requirements of Sections 4 and 5
of Rule 1514 of the Rules of Court is considered
a worthless piece of paper, which the Clerk of
Court has no right to receive and the trial court
has no authority to act upon. Service of a copy
of a motion containing a notice of the time and
the place of hearing of that motion is a
mandatory requirement, and the failure of
movants to comply with these requirements
renders their motions fatally defective.
However, there are exceptions to the strict
application of this rule. These exceptions are:
(1) where a rigid application will result in a
manifest failure or miscarriage of justice
especially if a party successfully shows that the
alleged defect in the questioned final and
executory judgment is not apparent on its face
or from the recitals contained therein; (2) where
the interest of substantial justice will be served;
(3) where the resolution of the motion is
addressed solely to the sound and judicious
discretion of the court; and (4) where the
injustice to the adverse party is not
commensurate with the degree of his
thoughtlessness in not complying with the
procedure prescribed. A notice of hearing is an
integral component of procedural due process
to afford the adverse parties a chance to be
heard before a motion is resolved by the court.
Through such notice, the adverse party is given
time to study and answer the arguments in the
motion. Records show that while Angeless
Motion for Issuance of Writ of Execution
contained a notice of hearing, it did not
particularly state the date and time of the
hearing. However, the SC still find that
petitioner was not denied procedural due
process. Upon receiving the Motion for
Issuance of Writ of Execution, the trial court
issued an Order dated September 9, 2002
giving petitioner ten (10) days to file its
comment. The trial court ruled on the motion
only after the reglementary period to file
comment lapsed. Clearly, petitioner was given
time to study and comment on the motion for
which reason, the very purpose of a notice of
hearing had been achieved.Procedural due
process is not based solely on a mechanical and
literal application that renders any deviation
inexorably fatal. Instead, procedural rules are
liberally construed to promote their objective
and to assist in obtaining a just, speedy and
inexpensive determination of any action and
proceeding.
On the last issue, SC note that the Compromise
Agreement approved by the trial court in its
Decision dated June 28, 2002 merely provided
that petitioner would pay Angeles the bid price
of P5,500,000, for the eight parcels of land
subject of the auction sale, within twenty (20)
days. Upon payment, Angeles would execute a
Certificate of Deed of Redemption and a Deed
of Cancellation of Mortgage, and surrender to
petitioner the titles to the eight parcels of land.
Nevertheless, when the trial court issued the
writ of execution, the writ gave Sheriff Bisnar
the option "to allow the consolidation of the
subject real properties in favor of the defendant
Imelda Angeles."
Undoubtedly, the writ of execution imposed
upon petitioner an alternative obligation which
was not included or contemplated in the
Compromise Agreement. While the complaint
originally sought to restrain Angeles from
consolidating her ownership to the foreclosed
properties, that has been superseded by the
Compromise Agreement. Therefore, the writ of
execution which directed Sheriff Bisnar to
"cause the Register of Deeds of Morong, Rizal,
to allow the consolidation of the subject real
properties in favor of the defendant Imelda
Angeles" is clearly erroneous because the
judgment under execution failed to provide for
consolidation. Because the writ of execution
varied the terms of the judgment and exceeded
them, it had no validity. The writ of execution
must conform to the judgment which is to be
executed, as it may not vary the terms of the
judgment it seeks to enforce. Neither may it go
beyond the terms of the judgment sought to be
executed. Where the execution is not in
harmony with the judgment which gives it life
and exceeds it, it has pro tanto no validity.20
WHEREFORE, the instant petition is PARTIALLY
GRANTED. The Decision dated November 28,
2003 and the Resolution dated May 26, 2004 of
the Court of Appeals in CA-G.R. SP No. 73965
are MODIFIED such that the writ of execution
issued on October 11, 2002 by Judge Adelina
Calderon-Bargas is declared NULL and VOID.
SC ordered that the case be REMANDED to the
Regional Trial Court of Morong, Rizal, Branch 78,
which is hereby ORDERED to issue another writ
of execution against petitioner KKK Foundation,
Inc., in conformity with the Decision dated June
28, 2002 of the trial court. This is without
prejudice to filing a new motion for
consolidation by respondent Angeles.
ANECO REALTY DEVELOPMENT V. LANDEX
J. REYES, R.T. | RULE 45 PETITION
THIS is a simple case of a neighbor seeking to
restrain the landowner from fencing his own
property. The right to fence flows from the right
of ownership. Absent a clear legal and
enforceable right, We will not unduly restrain
the landowner from exercising an inherent
proprietary right.
FACTS:
1. Fernandez Hermanos Development, Inc.
(FHDI) is the original owner of a tract of
land in San Francisco Del
Monte, Quezon City. FHDI subdivided the
land into thirty-nine (39) lots
2. It later sold twenty-two (22) lots to
petitioner Aneco and the remaining
 seventeen (17) lots to
respondent Landex
3. The dispute arose when Landex started
the construction of a concrete wall on
one of its lots. To restrain construction of
the wall, Aneco filed a complaint for
injunction with
the RTC in Quezon City. Aneco later filed
two (2) supplemental complaints seeking
to demolish the newly-built wall and to
hold Landex liable for two million pesos
in damages
4. Landex filed its Answer alleging, among
others, that Aneco was not deprived
access to its lots due to the construction
of the concrete wall. Landex claimed
that Aneco has its own entrance to its
property along Miller
Street, Resthaven Street, and San
Francisco del Monte
Street. The Resthavenaccess, however,
was rendered inaccessible
when Aneco constructed a building on
said street.Landex also claimed that
FHDI sold ordinary lots, not subdivision
lots, to Aneco based on the express
stipulation in the deed of sale that FHDI
was not interested in pursuing its own
subdivision project.
5. RTC: GRANTED the complaint for
injunction MR Records reveal
that Landex failed to include a notice of
hearing in its motion for reconsideration
as required under Section 5, Rule 15 of
the 1997 Rules of Civil
Procedure. Realizing the
defect, Landex later filed a
motion setting a hearing for its motion
for reconsideration. Aneco countered
with a motion for execution claiming that
the RTC decision is already final and
executory.
6. Acting on the motion of Landex,
the RTC set a hearing on the motion for
reconsideration on August 28,
1996. Aneco failed to attend the slated
hearing. The RTC gave Aneco additional
time to file a comment on the motion for
reconsideration
7. RTC denied ANECOs motion for
execution
8. On March 31, 1997, the RTC issued an
order granting the motion for
reconsideration of Landex and
dismissing the complaint of Aneco
affirmed by CA
WHETHER OR NOT THE RTC AND THE CA
ERRED IN LIBERALLY APPLYING THE RULE
ON NOTICE OF HEARING UNDER SECTION
5, RULE 15 OF THE 1997 RULES OF CIVIL
PROCEDURE?
1. NO
2. Here, We find that the RTC and the CA
soundly exercised their discretion in
opting for a liberal rather than a strict
application of the rules on notice of
hearing. It must be stressed that there
are no vested right to technicalities. It is
within the courts sound discretion to
relax procedural rules in order to fully
adjudicate the merits of a case. This
Court will not interfere with the exercise
of that discretion absent grave abuse or
palpable error. Section 6, Rule 1 of the
1997 Rules of Civil Procedure even
mandates a liberal construction of the
rules to promote their objectives of
securing a just, speedy, and inexpensive
disposition of every action and
proceeding.
3. To be sure, the requirement of a notice of
hearing in every contested motion is part
of due process of law. The notice alerts
the opposing party of a pending motion
in court and gives him an opportunity to
oppose it. What the rule forbids is not
the mere absence of a notice of hearing
in a contested motion but the unfair
surprise caused by the lack of notice. It
is the dire consequences which flow from
the procedural error which is
proscribed. If the opposing party is given
a sufficient opportunity to oppose a
defective motion, the procedural lapse is
deemed cured and the intent of the rule
is substantially complied.
4. We also find that the procedural lapse
committed by Landex was
sufficiently cured when it filed another
motion setting a hearing for its defective
motion for reconsideration. Records
reveal that the RTC set a hearing for the
motion for reconsideration
but Anecos counsel failed to
appear. The RTC then
gave Aneco additional time to file
comment on the motion for
reconsideration.
5. Aneco was afforded procedural due
process when it was given an
opportunity to oppose the motion for
reconsideration. It cannot argue unfair
surprise because it was afforded ample
time to file a comment, as it did
comment, on the motion for
reconsideration. There being no
substantial injury or unfair prejudice,
the RTC and the CA correctly ignored the
procedural defect.
WHETHER OR NOT ANECO MAY
ENJOIN LANDEX FROM CONSTRUCTING A
CONCRETE WALL ON ITS OWN PROPERTY?
1. NO.
2. What is involved here is an undue
interference on the property rights of a
landowner to build a concrete wall on his
own property. It is a simple case of a
neighbor, petitioner Aneco, seeking to
restrain a landowner,
 respondent Landex, from fencing his own
land.
3. Article 430 of the Civil Code gives every
owner the right to enclose or fence his
land or tenement by means of walls,
ditches, hedges or any other means. The
right to fence flows from the right of
ownership. As owner of the
land, Landex may fence his property
subject only to the limitations and
restrictions provided by law. Absent a
clear legal and enforceable right, as
here, Wewill not interfere with the
exercise of an essential attribute of
ownership.
4. Well-settled is the rule that factual
findings and conclusions of law of the
trial court when affirmed by the CA are
accorded great weight and
respect. Here, We find no cogent reason
to deviate from the factual findings and
conclusion of law of the trial court and
the appellate court. We have
meticulously reviewed the records and
agree that Aneco failed to prove any
clear legal right to prevent, much less
restrain, Landex from fencing its own
property.
5. Aneco cannot rely on the road lot under
the old subdivision project of FHDI
because it knew at the time of the sale
that it was buying ordinary lots, not
subdivision lots, from FHDI. This is clear
from the deed of sale between FHDI
and Aneco where FHDI manifested that it
was no longer interested in pursuing its
own subdivision project. If Aneco wants
to transform its own lots into a
subdivision project, it must make its own
provision for road lots. It certainly cannot
piggy back on the road lot of the defunct
subdivision project of FHDI to the
detriment of the new
owner Landex. The RTC and the CA
correctly dismissed the complaint for
injunction of Aneco for lack of merit.
OTHER NOTES: Section 5, Rule 15 of
the 1997 Rules of Civil Procedure requires a
notice of hearing for a contested motion filed in
court. Records disclose that the motion for
reconsideration filed by Landex of
the RTC decision did not contain a notice of
hearing. There is no dispute that the motion for
reconsideration is defective. The RTC and the
CA ignored the procedural defect and ruled on
the substantive issues raised by Landex in its
motion for reconsideration. The issue
before Us is whether or not the RTC and the CA
correctly exercised its discretion in ignoring the
procedural defect.Simply put, the issue is
whether or not the requirement of notice of
hearing should be strictly or liberally applied
under the circumstances.
Aneco bats for strict construction. It cites
a litany of cases which held that notice of
hearing is mandatory. A motion without the
required notice of hearing is a mere scrap of
paper. It does not toll the running of the period
to file an appeal or a motion for
reconsideration. It is argued that the
original RTC decision is already final and
executory because of the defective motion.
Landex counters for liberal
construction. It similarly cites a catena of cases
which held that procedural rules may be relaxed
in the interest of substantial
justice. Landex asserts that the procedural
defect was cured when it filed a motion setting
a hearing for its motion for reconsideration. It is
claimed that Aneco was properly informed of
the pending motion for reconsideration and it
was not deprived of an opportunity to be heard.
It is true that appeals are mere statutory
privileges which should be exercised only in the
manner required by law. Procedural rules serve
a vital function in our judicial system. They
promote the orderly resolution of cases. Without
procedure, there will be chaos. It thus behooves
upon a litigant to follow basic procedural
rules. Dire consequences may flow from
procedural lapses.
Nonetheless, it is also true that
procedural rules are mere tools designed to
facilitate the attainment of justice. Their strict
and rigid application should be relaxed when
they hinder rather than promote substantial
justice. Public policy dictates that court cases
should, as much as possible, be resolved on the
merits not on mere technicalities. Substantive
justice trumps procedural rules.
OBJECTION TO PLEADINGS
A. MOTION TO DISMISS
GENERALLY
BORJE V. CFI OF MISAMIS
J. GUERRERO
SUMMARY: Petitioner sued private defendants
for damages for disconnecting his water
service, with prayer for preliminary mandatory
injunction. Upon order of the trial court the
water service was reconnected immediately.
Private respondents moved to dismiss alleging:
(1) lack of jurisdiction and (2) pendency of
another action between the same parties for the
same cause.
The trial court dismissed the complaint not on
the grounds alleged in the motion to dismiss but
on the grounds that there was no malice or bad
faith in the severance of the water connection
of petitioner and that private respondents had
already reconnected the same.
Petitioner, on petition for certiorari, alleged that
the trial court acted with grave abuse of
discretion amounting to lack of jurisdiction for
dismissing the complaint without conducting
any hearing despite the existence of
controverted facts that need to be proved.
The Supreme Court held that dismissal of
actions on grounds not alleged in the motion to
dismiss is improper; that the trial court, motu
proprio, cannot dismiss an action except where
plaintiff fails to appear at the trial or fails to
prosecute the case; that dismissal of an action
without affording the parties an opportunity to
be heard and present evidence in support of
their case is violative of due process.
Petition granted and the questioned orders set
aside.
FACTS:
1) Petitioner alleged that he is the counsel of
the water consuming public of Ozamiz City
who were indignant against the increase of
water rates imposed by respondent Misamis
Occidental Water District and who thereby
resorted to court action for redress and/or
remedy.
2) After acceptance of the retainer as counsel
plus the consequent representation of the
consumers also in debates and discussions
in the air, he allegedly received water bills
from the Water District without indication of
the meter readings, the number of cubic
meters consumed and the amounts to be
paid. So he refused to pay the "blank bills."
For such failure, petitioners water service
was cut on February 6, 1978.
3) By reason of these acts of "harassment" of
private respondents resulting in his
"humiliation" as well as unlawful deprivation
of a lifes necessity, petitioner brought
Special Civil Case No. OZ 686, an action for
damages with preliminary mandatory
injunction, before respondent
Court.chanrobles virtual lawlibrary
4) Acting on the prayer incorporated therein for
preliminary mandatory injunction,
respondent Court issued an order dated
February 8, 1978 enjoining respondents
from disconnecting the water service of
petitioner. Upon learning that the same was
already cut, the Court issued another order
reconnect it immediately.
5) PR filed a motion to dismiss the complaint
on two grounds, namely: a lack of
jurisdiction of respondent Court allegedly
because the "main thrust the subject and
nature of the action or suit appearing in the
complaint is clearly within the field of
special civil action or suit action or special
proceeding" 1 and (b) there is another
action pending between the same parties for
the same cause, referring to Special Civil
Case No. 0390.
6) Surprisingly though, respondent Court,
through Hon. Melecio A. Genato, a
temporary judge assigned thereat, issued an
order dated March 9, 1978 dismissing the
case not on the basis of the grounds alleged
by private respondents in their motion to
dismiss but on the grounds that there was
no malice or bad faith in the severance of
the water connection of petitioner and that
private respondent had already reconnected
the same MR DENIED
7) An opposition thereto was filed by private
respondents disputing only the claim of
petitioner that the order dated March 9,
1978 was a midnight order. Petitioner filed a
"rejoinder" reiterating that the order of
dismissal is a midnight order
8) By reason of the number of arguments on
the issue of whether the order dated March
9, 1978 is a midnight order or not, the
respondent Court, through Hon. Bienvenido
A. Ebarle, considered the motion for
reconsideration as mainly anchored on the
lack of authority of Judge Genato.
WON RESPONDENT COURT ACTED IN GAD
IN DISMISSING THE CASE? YES.
1) Firstly, the said order of dismissal dated
March 9, 1978 is not premises on lack of
jurisdiction or on the pendency of another
case between the same parties for the same
cause - the grounds alleged by private
respondents in their motion to dismiss.
a) On this score, it has been held in the
case of Malig, Et. Al. v. Bush, that
dismissal of actions on grounds not
alleged in the motion to dismiss is
improper for in so doing, a court in effect
dismisses an action motu proprio without
giving the plaintiffs a chance to argue
the point and without receiving any
arguments or evidence on the question.
2) In a rather summary fashion, respondent
Court made a finding on the basis merely of
the pleadings filed and without conducting
any hearing, that there is no malice or bad
faith on the part of private respondents in
their act of severing petitioners water
supply.
3) Section 1 of Rule 8 (now Section 1 of Rule
16) enumerates the grounds upon which an
action may be dismissed, and it specifically
ordains that a motion to this end be filed. In
the light of this express requirement we do
not believe that the court had power to
dismiss the case without the requisite
motion duly presented. . . . The only
instance in which. according to said Rules,
the court may dismiss upon the courts own
motion on action is, when the "plaintiff fails
to appear at the time of the trial or to the
prosecute his action for an unreasonable
length of time or to comply with the Rules or
any order of the court.
4) The real cause for concern, though, is
not so much the dismissal of the case
for lack of presentation of the requisite
motion but rather the dismissal thereof
 without affording petitioner an
opportunity to be heard despite the
presence of factual issues that needed
to be proved.
a) In the case at bar, respondents premised
their right to cut off the water service
connection on the violation of
petitioners water service contract which
is the contract signed by petitioner with
the National Waterworks and Sewerage
Authority on September 16, 1958 to
which private respondent Misamis
Occidental Water District claims it has
been subrogated
b) In the case at bar, respondents premised
their right to cut off the water service
connection on the violation of
petitioners water service contract 7
which is the contract signed by
petitioner with the National Waterworks
and Sewerage Authority on September
16, 1958 to which private respondent
Misamis Occidental Water District claims
it has been subrogated
c) Thirdly, they annexed to their comment
on this petition a facsimile copy of the
monthly bill 9 furnished each water
consumer wherein it is stated that
"service may be disconnected
immediately if payment of the bill is not
made to the field collector after due
date."cralaw
d) But the question posed by
petitioner is whether or not there is
really failure to pay on his part. It is
his contention that there is no
failure as he was sent water bills
that did not indicate the meter
readings, the number of cubic
meters consumed and the amount
to be paid.
5) IN THE CASE AT BAR, THERE LIES A need
of presentation of proof for the respective
allegations of the parties. For the
respondent Court to make a summary
finding of lack of malice or bad faith on the
part of private respondents from those
controverted facts and then decree the
dismissal of the case is, therefore, violative
of due process. In view of the doubtful
question of facts presented herein,
respondent court, in the exercise of sound
discretion, should have refused to consider
and decide in a summary manner and
should have allowed the parties to present
proof in support of their respective stand.
This is because the right to a hearing, which
is the right of the parties interested or
affected to present their respective cases
and submit evidence in support thereof, is
one of the primary cardinal rights of
litigants.
6) THE DISMISSAL OF AN ACTION UPON A
MOTION TO DISMISS CONSTITUTES A DENIAL
OF DUE PROCESS, IF, FROM A
CONSIDERATION OF THE PLEADINGS, IT
APPEARS THAT THERE ARE ISSUES OF FACT
WHICH CANNOT BE DECIDED WITHOUT A
TRIAL OF THE CASE ON THE MERITS.
WANT OF JURISDICTION
ANDAYA V. ABADIA
J. BELOSILLO
FACTS:
1) Maintaining that the Regional Trial Court
(RTC) and not the securities and Exchange
Commission (SEC) has jurisdiction over his
complaint, petitioner argues that the court a
quo should not have dismissed Civil Case
No. Q-91-10470 filed by him against herein
respondents
2) COMPLAINT: NOE S. ANDAYA, as plaintiff,
sued respondents LISANDRO C. ABADIA,
RENE R. CRUZ, VICTOR M. PUNZALAN,
LYSIAS C. CABUSAO, JOSE O. BARNUEVO,
JOSE M. FORONDA, LAMBERTO TORRES,
EDGAR C. GALVANTE, EMERSON, C. TANGAN,
PRIMITIVO A. SOMERA AND BENJAMIN N.
SANTOS, SR., as defendants, alleging . . .
that said respondents, as directors of the
Armed Forces and Police Savings and Loan
Association, Inc., (AFPSLAI) . . . acting in
concerts and pursuant to an illegal and
nefarious scheme to oust petitioner from his
then positions as President and General
Manager of the AFPSLAI, with grave abuse of
authority and in gross and deliberate
violation of the norms of human relations
and of petitioner's right to due process,
illegally, maliciously and with evident bad
faith, convened a meeting of the AFPSLAI
Board of Directors and illegally reorganized
the management of AFPSLAI by ousting and
removing, without just and lawful cause,
petitioner from his positions therein, causing
petitioner moral and exemplary damages,
and praying . . . for the issuance of a
temporary restraining order . . . and . . . a
writ of preliminary injunction, restraining
respondents from implementing the result of
the irregularity convened and illegally
conducted reorganization of the
management of AFPSLAI, as well as
respondents Punzalan and Tangan from
assuming and taking over from petitioner
the offices of President and General
Manager of said AFPSLAI and from
performing and exercising the functions and
powers thereof pending final determination
of the case
3) On 30 October 1991, the trial court granted
the prayer of petition for temporary
restraining order and set the hearing on the
injunctive relief
4) On 4 November 1991, respondents filed an
Urgent Motion to Dismiss on the ground that
the complaint raised intra-corporate
controversies over which the Securities and
Exchange Commission, and not the court a
quo, has exclusive original jurisdiction
FOLLOWED BY AN Urgent Motion to Lift
 Restraining Order and Opposition to
Preliminary Injunction
5) Petitioner filed a Consolidated Opposition to
Urgent Motion to Dismiss and Motion to Lift
Restraining Order with Reply to Opposition
to Preliminary Injunction and Reiteration of
Motions for Contempt (for violation of the
Temporary Restraining Order), arguing that
"the case is mainly based not on petitioner's
attempted removal per se but rather on the
manner of his removal and the effect
thereof, which was done anti-socially,
oppressively, in gross violation of the norms
of human relations and without giving
petitioner his due . . ." FOLLOWED BY AN
AMENDED COMPLAINT impleading as
additional defendants then Central bank
Governor Jose L. Cuisia, Jr., Central Bank
SRDC Managing Director Ricardo P. Lirio and
Central Bank SES Acting Director Candon B.
Guerrero
6) On 13 November 1991, respondents filed an
Omnibus Motion contending, inter alia, that
the filing of an amended complaint seeking
to confer jurisdiction on the court was
improper and should not be allowed.
7) On 14 November 1991, Judge Pedro T.
Santiago of the court a quo issued an order
dismissing the case for lack of jurisdiction
insofar as herein respondents were
concerned and denied petitioner's motions
to declare respondents in contempt of court.
While the order mentioned the amended
complaint, it made no express disposition
thereon (the prayers for damages and
injunction are predicated on corporate)
MR DENIED
WON THE COURT ERRED IN DISMISSING
THE COMPLAINT?
NO.
1) The allegations against herein respondents
in the amended complaint unquestionably
reveal intra-corporate controversies cleverly
concealed, although unsuccessfully, by use
of civil law terms and phrases. The amended
complaint impleads herein respondents who,
in their capacity as directors of AFPSLAI,
allegedly convened an illegal meeting and
voted for the reorganization of management
resulting in petitioner's ouster as corporate
officer. While it may be said that the same
corporate acts also give rise to civil liability
for damages, it does not follow that the case
is necessarily taken out of the jurisdiction of
the SEC as it may award damages which can
be considered consequential in the exercise
of its adjudicative powers. Besides,
incidental issues that properly fall within the
authority of a tribunal may also be
considered by it to avoid multiplicity of
actions. Consequently, in intra-corporate
matters such as those affecting the
corporation, its directors, trustees, officers,
shareholders, the issue of consequential
damages may just as well be resolved and
adjudicated by the SEC.
2) Moreover, mere allegations of violation of
the provisions of the Civil Code on human
relations do not necessarily call for the
application of the provisions of the Civil
Code in place of AFPSLAI By-Laws
3) The determination of the rights of petitioner
arising from the alleged illegal convening of
the meeting of AFPSLAI Board of Directors
and his subsequent ouster from corporate
offices as a result of the voting for the
reorganization of management are obviously
intra-corporate controversies subject to the
jurisdiction of SEC as provided in P.D. No.
902-A
4) The same may also be said of petitioner's
prayer for damages, considering that his
right thereto either depends on, or is
inextricably linked with, the resolution of the
corporate controversies. For instance, the
prayer for moral damages is grounded on
"defendants' gross and evident bad faith,
insidious machinations and conspirational
acts, false and derogatory
misinterpretations and imputations against
plaintiff and other malevolent and illegal
acts calculated to realize and accomplish
the threatened illegal removal of plaintiff
from his positions aforesaid . . . .;" while the
prayer for exemplary damages is dependent
on alleged respondents' "concerted illegal
effort to maliciously set him up for, and
fraudulently consummate, his illegal ouster
from his positions in the AFPSLAI . . . ."
RE: the alleged procedural infirmity that
"despite the filing of an Amended Complaint
before a responsive pleading has been filed,
which superseded the original complaint and
rendered respondents' Motion to Dismiss the
original complaint functus oficio, the Court a
quo without first admitting the Amended
Complaint and merely upon respondents'
Omnibus Motion . . . dismissed the case as
against respondents."
1) First of all, under Sec. 2, Rule 10, Rules of
Court, the filing of an amended complaint
before answer is an undisputed right of
plaintiff, hence, there is no need for the
court to allow its admission
2) It appears however that the Omnibus Motion
(seeking dismissal of the Amended
Complaint) was already filed when the court
a quo rendered the order of 14 November
1991 resolving, not the Omnibus Motion, but
the Urgent Motion to Dismiss (seeking
dismissal of the original Complaint).
Ordinarily, the filing of the Omnibus Motion
should render the Urgent Motion to Dismiss
superseded
3) The foregoing notwithstanding, remedial
rights and privileges under the Rules of
Court are utterly useless in a forum that has
no jurisdiction over the case. It should be
noted that the court a quo dismissed the
case against respondents on the ground that
 it has no jurisdiction over the subject matter
thereof which mainly involves intra-
corporate controversies.
4) Sec. 2, Rule 9 uses the word "shall," leaving
the court no choice under the given
situation but to dismiss the case. The same
Rule also uses the phrase "whenever it
appears," which means at anytime after the
complaint or amended complaint is filed,
because the lack of jurisdiction may be
apparent from the allegations therein.
Hence, from the foregoing, even if no
answer or motion to dismiss is filed the
court may dismiss the case for want of
jurisdiction. In this sense, dismissal for lack
jurisdiction may be ordered by the court
motu propio. Applying this notion to the
case at bar, with the dismissal of the case
against respondents for lack of jurisdiction,
it then becomes inconsequential whether
the court acted on the Urgent Motion to
Dismiss or on the Omnibus Motion without
the requisite notice as provided in Secs. 4
and 6 of Rule 15 of the Rules of Court. The
determination of lack of jurisdiction over
respondents being apparent from the face of
the amended complaint, the defect of want
of prior notice and hearing of the Omnibus
Motion could not by itself confer jurisdiction
upon the court a quo.
DAR V. ABDULWAHID
J. PUNO
The Department of Agrarian Reform
Adjudication Board (DARAB) is vested with
primary and exclusive jurisdiction to determine
and adjudicate agrarian reform matters,
including all matters involving the
implementation of the agrarian reform program.
Thus, when a case is merely an incident
involving the implementation of the
Comprehensive Agrarian Reform Program
(CARP), then jurisdiction remains with the
DARAB, and not with the regular courts.
FACTS:
1) Yupangco Cotton Mills, Inc. (Yupangco) filed
a complaint for Recovery of Ownership
and Possession, Violations of R.A. Nos.
6657 and 3844[,] as amended,
Cancellation of Title, Reconveyance and
[D]amages with Prayer for the Issuance
of Preliminary Mandatory Injunction
and/or Temporary Restraining Order
against Buenavista Yupangco Agrarian
Reform Beneficiaries Association, Inc.
(BYARBAI), the DAR and the Land Bank of
the Philippines. The case was docketed as
Civil Case No. 5113 and raffled to the
Regional Trial Court (RTC), Branch 12 of
Zamboanga City
2) DAR filed a Motion to Dismiss on the
following grounds: (a) Yupangcos causes of
action were not within the jurisdiction of the
RTC, (b) forum shopping, and (c) litis
pendentia
3) RTC denied the Motion to Dismiss, ruling
that Yupangcos action was within the
jurisdiction of the RTC pursuant to Section
19, Chapter II of Batas Pambansa Blg.
129 MR denied
4) DAR filed a special civil action for certiorari
under Rule 65 of the 1997 Rules of Court
with the CA, alleging that the trial court
acted with grave abuse of discretion
amounting to lack of jurisdiction when DARs
motion to dismiss was denied
5) The appellate court sustained the RTC,
finding that the action falls within the
jurisdiction of the regular courts and not the
DARAB because Yupangco primarily sought
the recovery and possession of the subject
parcel of land.
6) Hence, this petition
PETITION GRANTED.
1) It is the rule that the jurisdiction of a
tribunal, including a quasi-judicial office or
government agency, over the nature and
subject matter of a petition or complaint is
determined by the material allegations
therein and the character of the relief
prayed for, irrespective of whether the
petitioner or complainant is entitled to any
or all of such reliefs
2) It is also settled that jurisdiction should be
determined by considering not only the
status or relationship of the parties but also
the nature of the issues or questions that is
the subject of the controversy
3) Thus, if the issues between the parties are
intertwined with the resolution of an issue
within the exclusive jurisdiction of the
DARAB, such dispute must be addressed and
resolved by the DARAB
4) In the case at bar, the complaint filed by
Yupangco seems at first blush to be within
the jurisdiction of the RTC, as it has been
denominated as Recovery of Ownership
and Possession, Violations of R.A. Nos.
6657 and 3844[,] as amended,
Cancellation of Title, Reconveyance and
[D]amages with Prayer for the Issuance
of Preliminary Mandatory Injunction
and/or Temporary Restraining Order.
5) But as correctly pointed out by the DAR, the
allegations of the complaint actually impugn
the CARP coverage of the landholding
involved and its redistribution to farmer
beneficiaries, and seek to effect a reversion
thereof to the original owner, Yupangco.
6) Yupangco also alleged in its complaint that
other acts were committed with the
purpose of land speculation, for
business or industrial purpose, for
immediate sale thereof for business
profits and not for planting, care and
tending of the coconut plantation,
which would defeat the purposes and
policies of the Agrarian Reform Laws
and [breached] the conditions of the
questioned award of the land,
 rendering the acquisition by or
distribution to [BYARBAI] as the tenant-
tillers of the land null and void, and
thus reverting back the ownership and
possession thereof to [Yupangco]
7) These allegations clearly show that
Yupangco sought the recovery of the subject
property by disputing its inclusion in the
CARP, and imputing errors in the
enforcement of the law pertaining to the
agrarian reform. The primal issues raised in
the complaint, viz.: protest against the CARP
coverage, alleged breach of conditions of
the DAR award under the CARP by the
farmer beneficiaries resulting to forfeiture of
their right as such; nonpayment of rentals
by the farmers to the petitioner under R.A.
No. 3844 (Agricultural Land Reform Code),
gravitate on the alleged manner the
implementation of the CARP under R.A. No.
6657 was carried out.
8) Under Section 50 of R.A. No. 6657, all
matters involving the implementation
of agrarian reform are within the DARs
primary, exclusive and original jurisdiction,
and at the first instance, only the DARABas
the DARs quasi-judicial body, can determine
and adjudicate all agrarian disputes, cases,
controversies, and matters or incidents
involving the implementation of the
Comprehensive Agrarian Reform Program
under R.A. No. 6657, E.O. Nos. 229, 228 and
129-A, R.A. No. 3844 as amended by R.A.
6389, P.D. No. 27 and other agrarian laws
and their implementing rules and
regulations.
9) Ultimately, the complaint in the petition at
bar seeks for the RTC to cancel Certificates
of Land Ownership Awards (CLOAs) issued to
the beneficiaries and the Transfer
Certificates of Title (TCTs) issued pursuant
thereto. These are reliefs which the RTC
cannot grant, since the complaint essentially
prays for the annulment of the coverage of
the disputed property within the CARP,
which is but an incident involving the
implementation of the CARP. T
REPUBLIC V. GLASGLOW CREDIT
J. CORONA
FACTS:
1) The Republic filed a complaint in the RTC
Manila for civil forfeiture of assets (with
urgent plea for issuance of temporary
restraining order [TRO] and/or writ of
preliminary injunction) against the bank
deposits in account number CA-005-10-
000121-5 maintained by Glasgow in CSBI.
The case, filed pursuant to RA 9160 (the
Anti-Money Laundering Act of 2001), as
amended
2) Acting on the Republics urgent plea for the
issuance of a TRO, the executive judge of
RTC Manila issued a 72-hour TRO dated July
21, 2003. The case was thereafter raffled to
Branch 47 and the hearing on the
application for issuance of a writ of
preliminary injunction was set on August 4,
2003
3) After hearing, the trial court (through then
Presiding Judge Marivic T. Balisi-Umali)
issued an order granting the issuance of a
writ of preliminary injunction. The injunctive
writ was issued on August 8, 2003.
4) Meanwhile, summons to Glasgow was
returned "unserved" as it could no longer be
found at its last known address
5) The Republic filed a verified omnibus motion
for (a) issuance of alias summons and (b)
leave of court to serve summons by
publication. In an order dated October 15,
2003, the trial court directed the issuance of
alias summons. However, no mention was
made of the motion for leave of court to
serve summons by publication
6) The trial court archived the case allegedly
for failure of the Republic to serve the alias
summons.
7) The Republic filed an ex parte omnibus
motion to (a) reinstate the case and (b)
resolve its pending motion for leave of court
to serve summons by publication
8) The trial court ordered the reinstatement of
the case and directed the Republic to serve
the alias summons on Glasgow and CSBI
within 15 days. However, it did not resolve
the Republics motion for leave of court to
serve summons by publication
9) The Republic (through the Office of the
Solicitor General [OSG]) received a copy of
the sheriffs return dated June 30, 2004
stating that the alias summons was returned
"unserved" as Glasgow was no longer
holding office at the given address since July
2002 and left no forwarding address
10) Meanwhile, the Republics motion for
leave of court to serve summons by
publication remained unresolved. Thus, on
August 11, 2005, the Republic filed a
manifestation and ex parte motion to
resolve its motion for leave of court to serve
summons by publication.
11) The OSG received a copy of Glasgows
"Motion to Dismiss (By Way of Special
Appearance)" dated August 11, 2005. It
alleged that (1) the court had no jurisdiction
over its person as summons had not yet
been served on it; (2) the complaint was
premature and stated no cause of action as
there was still no conviction for estafa or
other criminal violations implicating Glasgow
and (3) there was failure to prosecute on the
part of the Republic.
12) The Republic opposed Glasgows motion
to dismiss. It contended that its suit was an
action quasi in rem where jurisdiction over
the person of the defendant was not a
prerequisite to confer jurisdiction on the
court. It asserted that prior conviction for
unlawful activity was not a precondition to
the filing of a civil forfeiture case and that its
 complaint alleged ultimate facts sufficient to
establish a cause of action. It denied that it
failed to prosecute the case.
13) the trial court issued the assailed order.
It dismissed the case on the following
grounds: (1) improper venue as it should
have been filed in the RTC of Pasig where
CSBI, the depository bank of the account
sought to be forfeited, was located; (2)
insufficiency of the complaint in form and
substance and (3) failure to prosecute.
THE COURT AGREES WITH THE REPUBLIC
(DUH)
1) THE COMPLAINT WAS FILED IN THE
PROPER VENUE
a) On November 15, 2005, this Court issued
A.M. No. 05-11-04-SC, the Rule of
Procedure in Cases of Civil Forfeiture,
Asset Preservation, and Freezing of
Monetary Instrument, Property, or
Proceeds Representing, Involving, or
Relating to an Unlawful Activity or Money
Laundering Offense under RA 9160, as
amended (Rule of Procedure in Cases of
Civil Forfeiture). The order dismissing the
Republics complaint for civil forfeiture of
Glasgows account in CSBI has not yet
attained finality on account of the
pendency of this appeal. Thus, the Rule
of Procedure in Cases of Civil Forfeiture
applies to the Republics complaint
b) Moreover, Glasgow itself judicially
admitted that the Rule of Procedure in
Cases of Civil Forfeiture is "applicable to
the instant case
c) Under Section 3, Title II of the Rule of
Procedure in Cases of Civil Forfeiture,
therefore, the venue of civil forfeiture
cases is any RTC of the judicial region
where the monetary instrument,
property or proceeds representing,
involving, or relating to an unlawful
activity or to a money laundering offense
are located. Pasig City, where the
account sought to be forfeited in this
case is situated, is within the National
Capital Judicial Region (NCJR). Clearly,
the complaint for civil forfeiture of the
account may be filed in any RTC of the
NCJR.
2) THE COMPLAINT WAS SUFFICIENT IN
FORM AND SUBSTANCE
a) In a motion to dismiss for failure to state
a cause of action, the focus is on the
sufficiency, not the veracity, of the
material allegations
b) The determination is confined to the four
corners of the complaint and nowhere
else
c) In a motion to dismiss a complaint based
on lack of cause of action, the question
submitted to the court for determination
is the sufficiency of the allegations made
in the complaint to constitute a cause of
action and not whether those allegations
of fact are true, for said motion must
hypothetically admit the truth of the
facts alleged in the complaint.The test
of the sufficiency of the facts
alleged in the complaint is whether
or not, admitting the facts alleged,
the court could render a valid
judgment upon the same in
accordance with the prayer of the
complaint.
d) The form and substance of the
Republics complaint substantially
conformed with Section 4, Title II of the
Rule of Procedure in Cases of Civil
Forfeiture.
e) It is the preliminary seizure of the
property in question which brings it
within the reach of the judicial process. It
is actually within the courts possession
when it is submitted to the process of
the court. The injunctive writ issued on
August 8, 2003 removed account no. CA-
005-10-000121-5 from the effective
control of either Glasgow or CSBI or their
representatives or agents and subjected
it to the process of the court.
f) Since account no. CA-005-10-000121-5
of Glasgow in CSBI was (1) covered by
several suspicious transaction reports
and (2) placed under the control of the
trial court upon the issuance of the writ
of preliminary injunction, the conditions
provided in Section 12(a) of RA 9160, as
amended, were satisfied. Hence, the
Republic, represented by the AMLC,
properly instituted the complaint for civil
forfeiture.
g) Whether or not there is truth in the
allegation that account no. CA-005-10-
000121-5 contains the proceeds of
unlawful activities is an evidentiary
matter that may be proven during trial.
The complaint, however, did not even
have to show or allege that Glasgow had
been implicated in a conviction for, or
the commission of, the unlawful
activities of estafa and violation of the
Securities Regulation Code.
h) A criminal conviction for an unlawful
activity is not a prerequisite for the
institution of a civil forfeiture proceeding.
Stated otherwise, a finding of guilt for an
unlawful activity is not an essential
element of civil forfeiture.
3) THERE WAS NO FAILURE TO PROSECUTE
a) Given the circumstances, how could the
Republic be faulted for failure to
prosecute the complaint for civil
forfeiture? While there was admittedly a
delay in the proceeding, it could not be
entirely or primarily ascribed to the
Republic. That Glasgows whereabouts
could not be ascertained was not only
beyond the Republics control, it was
also attributable to Glasgow which left its
principal office address without
 informing the Securities and Exchange
Commission or any official regulatory
body (like the Bureau of Internal
Revenue or the Department of Trade and
Industry) of its new address. Moreover,
as early as October 8, 2003, the Republic
was already seeking leave of court to
serve summons by publication.
b) While a court can dismiss a case on the
ground of non prosequitur, the real test
for the exercise of such power is
whether, under the circumstances,
plaintiff is chargeable with want of due
diligence in failing to proceed with
reasonable promptitude. In the
absence of a pattern or scheme to
delay the disposition of the case or
a wanton failure to observe the
mandatory requirement of the rules
on the part of the plaintiff, as in the
case at bar, courts should decide to
dispense with rather than wield
their authority to dismiss.
4) SERVICE OF SUMMONS MAY BE MADE
BY PUBLICATION
a) As an action in rem, it is a proceeding
against the thing itself instead of against
the person. In actions in rem or quasi in
rem, jurisdiction over the person of the
defendant is not a prerequisite to
conferring jurisdiction on the court,
provided that the court acquires
jurisdiction over the res. Nonetheless,
summons must be served upon the
defendant in order to satisfy the
requirements of due process. For this
purpose, service may be made by
publication as such mode of service is
allowed in actions in rem and quasi in
rem
IMPROPER VENUE
WANT OF LEGAL CAPACITY TO SUE
EVANGELISTA ET AL. V. SANTIAGO
J. CHICO NAZARIO | RULE 45
FACTS:
1) In their Complaint, petitioners alleged that
they occupied and possessed parcels of
land, located in Sitio Panayawan, Barangay
San Rafael, Montalban (now Rodriquez),
Province of Rizal (Subject Property), by
virtue of several Deeds of Assignment,
dated 15 April 1994 and 02 June 1994,
executed by a certain Ismael Favila y
Rodriguez
2) Ismael Favila claimed to be one of the heirs
and successors-in-interest of Don
Hermogenes Rodriguez. Acting as Attorney-
in-Fact pursuant to a Special Power of
Attorney executed by his mga kapatid on 25
February 1965, Ismael Favila signed the
aforementioned Deeds of Assignment,
assigning portions of the Subject Property to
the petitioners, each portion measuring
around 500 to 1,000 square meters, in
exchange for the labor and work done on
the Subject Property by the petitioners and
their predecessors
3) Petitioners came by information that
respondent (OCT WAS ISSUED IN HIS
MAMAS NAME AND THREE OTHERS
[UNNAMED]) was planning to evict them
from the Subject Property. Two of the
petitioners had actually received notices to
vacate
4) Petitioners filed with the trial court, on 29
April 1996, an action for declaration of
nullity of respondents certificates of title on
the basis that OCT No. 670 was fake and
spurious not signed by a duly authorized
officer; Material data therein were merely
handwritten and in different penmanships;
OCT No. 670 was not printed on the Official
Form used in 1913, the year it was issued;
failed to indicate the Survey Plan which was
the basis of the Technical Description of the
property covered by the title; ETC
5) Respondent filed his Answer with Prayer for
Preliminary Hearing on the Affirmative
Defenses on 03 July 1996. According to
respondent, [t]he allegations in the
Complaint would readily and patently show
that the same are flimsy, fabricated,
malicious, without basis in law and in fact
RAISED AFFIRMATIVE DEFENSES: petitioners
had no legal capacity to file the Complaint,
and thus, the Complaint stated no cause of
action. Since OCT No. 670 was genuine and
authentic on its face; PRESCRIPTION, ETC.
6) After the preliminary hearing, the trial court
issued the questioned Order, dated 05
February 1999, dismissing petitioners
Complaint MR DENIED CA AFFIRMED
TC MR DENIED
NOTES:
1) Lack of legal capacity to sue means that the
plaintiff is not in the exercise of his civil
rights, or does not have the necessary
qualification to appear in the case, or does
not have the character or representation he
claims. On the other hand, a case is
dismissible for lack of personality to sue
upon proof that the plaintiff is not the real
party-in-interest, hence grounded on failure
to state a cause of action. The term "lack of
capacity to sue" should not be confused
with the term "lack of personality to sue."
While the former refers to a plaintiffs
general disability to sue, such as on account
of minority, insanity, incompetence, lack of
juridical personality or any other
general disqualifications of a party, the
latter refers to the fact that the
plaintiff is not the real party- in-
interest. Correspondingly, the first can
be a ground for a motion to dismiss
based on the ground of lack of legal
capacity to sue; whereas the second
can be used as a ground for a motion to
 dismiss based on the fact that the
complaint, on the face thereof,
evidently states no cause of action.
2) In an action for reversion, the pertinent
allegations in the complaint would admit
State ownership of the disputed land
3) A cause of action for declaration of nullity of
free patent and certificate of title would
require allegations of the plaintiffs
ownership of the contested lot prior to the
issuance of such free patent and certificate
of title as well as the defendants fraud or
mistake, as the case may be, in successfully
obtaining these documents of title over the
parcel of land claimed by plaintiff. In such a
case, the nullity arises strictly not from the
fraud or deceit but from the fact that the
land is beyond the jurisdiction of the Bureau
of Lands to bestow and whatever patent or
certificate of title obtained therefore is
consequently void ab initio. The real party-
in-interest is not the State but the plaintiff
who alleges a pre-existing right of ownership
over the parcel of land in question even
before the grant of title to the defendant
SUPREME COURT:
1) In the present case, this Court may assume
that the respondent is raising the affirmative
defense that the Complaint filed by the
petitioners before the trial court stated no
cause of action because the petitioners
lacked the personality to sue, not being the
real party-in-interest. It is the respondents
contention that only the State can file an
action for annulment of his certificates of
title, since such an action will result in the
reversion of the ownership of the Subject
Property to the State.
2) The affirmative defense that the Complaint
stated no cause of action, similar to a
motion to dismiss based on the same
ground, requires a hypothetical
admission of the facts alleged in the
Complaint.
3) In resolving whether or not the Complaint in
the present case stated a cause of action,
the trial court should have limited itself to
examining the sufficiency of the allegations
in the Complaint. It was proscribed from
inquiring into the truth of the allegations in
the Complaint or the authenticity of any of
the documents referred or attached to the
Complaint, since these are deemed
hypothetically admitted by the respondent.
The trial court evidently erred in making
findings as to the authenticity of the Deeds
of Assignment executed by Ismael Favila in
favor of petitioners on 15 April 1994 and 02
June 1994; and questioning the existence
and execution of the Special Power of
Attorney in favor of said Ismael Favila by his
siblings on 25 February 1965. These matters
may only be resolved after a proper trial on
the merits.
4) Indeed, petitioners Complaint filed before
the trial court was captioned as an action for
declaration of nullity of respondents
certificates of title. However, the caption of
the pleading should not be the governing
factor, but rather the allegations therein
should determine the nature of the action,
because even without the prayer for a
specific remedy, the courts may
nevertheless grant the proper relief as may
be warranted by the facts alleged in the
Complaint and the evidence introduced.
5) Even as this Court agrees with the
petitioners that their action was one for
removal of a cloud on or quieting of title, it
does arrive at the same conclusion as the
trial court and the Court of Appeals that
petitioners had no personality to file the said
action, not being the parties-in-interest, and
their Complaint should be dismissed for not
stating a cause of action.
6) According to Article 477 of the Civil Code,
the plaintiff, in an action to remove a cloud
on or to quiet title, must have legal or
equitable title to, or interest in, the real
property which is the subject matter of the
action. Petitioners failed to establish in their
Complaint that they had any legal or
equitable title to, or legitimate interest in,
the Subject Property so as to justify their
right to file an action to remove a cloud on
or to quiet title.
7) Title to real property refers to that upon
which ownership is based. It is the evidence
of the right of the owner or the extent of his
interest, by which means he can maintain
control and, as a rule, assert right to
exclusive possession and enjoyment of the
property.
8) In their Complaint, petitioners claimed title
to the Subject Property by virtue of their
actual and continuous possession of the
same since time immemorial, by themselves
and through their predecessors-in-interest.
Yet, the Deeds of Assignment executed by
Ismael Favila in their favor, attached to and
an integral part of their Complaint, revealed
that petitioners predecessors-in-interest
based their right to the Subject Property on
the Spanish title awarded to Don
Hermogenes Rodriguez.
9) There existed a contradiction when
petitioners based their claim of title to the
Subject Property on their possession thereof
since time immemorial, and at the same
time, on the Spanish title granted to Don
Hermogenes Rodriguez. Possession since
time immemorial carried the presumption
that the land had never been part of the
public domain or that it had been
private property even before the
Spanish conquest. If the Subject Property
was already private property before the
Spanish conquest, then it would have been
beyond the power of the Queen of Spain to
award or grant to anyone.
10) The title to and possession of the Subject
Property by petitioners predecessors-in-
interest could be traced only as far back as
the Spanish title of Don Hermogenes
Rodriguez. Petitioners, having acquired
portions of the Subject Property by
assignment, could acquire no better title to
the said portions than their predecessors-in-
interest, and hence, their title can only be
based on the same Spanish title.
11) P.D. No. 892 became effective on 16
February 1976. The successors of Don
Hermogenes Rodriguez had only until 14
August 1976 to apply for a Torrens title in
their name covering the Subject Property. In
the absence of an allegation in petitioners
Complaint that petitioners predecessors-in-
interest complied with P.D. No. 892, then it
could be assumed that they failed to do so.
Since they failed to comply with P.D. No.
892, then the successors of Don
Hermogenes Rodriguez were already
enjoined from presenting the Spanish title as
proof of their ownership of the Subject
Property in registration proceedings.
12) Registration proceedings under the Torrens
system do not create or vest title, but only
confirm and record title already created and
vested
13) August 1976), after which, the Spanish titles
may no longer be presented to prove
ownership.
14) All holders of Spanish titles should have filed
applications for registration of their title on
or before 14 August 1976. In a land
registration proceeding, the applicant should
present to the court his Spanish title plus
proof of actual possession of the real
property. However, if such land registration
proceeding was filed and initiated after 14
August 1976, the applicant could no longer
present his Spanish title to the court to
evidence his ownership of the real property,
regardless of whether the real property was
in his actual possession.
15) Therefore, the fact that petitioners were in
actual possession of the Subject Property
when they filed the Complaint with the trial
court on 29 April 1996 does not exclude
them from the application of P.D. No. 892,
and their Spanish title remain inadmissible
as evidence of their ownership of the
Subject Property, whether in a land
registration proceeding or in an action to
remove a cloud on or to quiet title.
16) Therefore, without legal or equitable title
to the Subject Property, the petitioners
lacked the personality to file an action for
removal of a cloud on, or quieting of, title
and their Complaint was properly dismissed
for failing to state a cause of action. In view
of the dismissal of the case on this ground, it
is already unnecessary for this Court to
address the issue of prescription of the
action.
LITIS PENDENTIA
ARCEO V. OLIVEROS
J. CUEVAS
FACTS:
1) Plaintiff-appellant Pablo Arceo filed a
complaint with the defunct Court of First
Instance of Quezon, against defendants-
appellees, spouses Jose Oliveros and Rufina
Cabangon.
2) In his complaint, Pablo alleged that Sixta
Arceo, his sister and co-heir, sold to
defendants-appellees on July 10, 1958 at
Alabat, Quezon, her undivided interest in the
parcel of land they have inherited from their
deceased father, Roberto Arceo, for
P2,500.00 without his (Pablo's) consent. He
further claimed that from the time of the
sale up to the present, defendants-appellees
have not made any improvement on the
land although in peaceful and complete
enjoyment of the property. Finally, Pablo
averred that being a co-owner and co-heir of
said Sixta Arceo, he should be allowed to
redeem and repurchase the property subject
of the sale in accordance with Section 119 of
the Public Land Act, the land being covered
by a free patent title
3) Respondents moved to dismiss the
complaint on the ff grounds: Plaintiff has no
legal capacity to sue; There is another
action pending between the same parties for
the same cause; Plaintiff's cause of action is
barred by the statute of limitations; The
complaint states no cause of action; and The
instant action is prosecuted not in the name
of the real party in interest DENIED
COURT ORDERED THEM TO FILE AN ANSWER
4) ANSWER: defendants alleged that Sixta
Arceo sold her definite share of one and one-
half (1 ) hectares of the land subject of the
litigation in favor of the defendants for the
sum of P2,500.00; that there was already a
definite partition of said realty between
plaintiff Pablo and his sister Sixta long
before the sale; that the conveyance was
made only after Pablo manifested his
unwillingness and inability to buy the parcel
in question, which was first offered to him;
and that defendants have introduced
numerous improvements on the land in
dispute. By way of affirmative defenses,
defendants reiterated the grounds set forth
and relied upon by them in their motion to
dismiss earlier filed.
5) Court of First Instance of Quezon dismissed
plaintiff's complaint MR DENIED
6) Hence, this petition
7) PS CONTENTION: While it may be true that
the aforesaid previous Civil Case NO. 435-G,
and the instant case involve almost the
same parties, nevertheless, the rights
asserted and the reliefs sought respectively
therein are entirely or essentially dissimilar.
In consequence thereof, this later case
should not have been dismissed, on the
 ground of the pendency of the stated prior
suit. The anterior action is to enforce the
alleged sale, while the posterior action is to
redeem legally the controverted property. If
the first litigation does not prosper and the
disputed sale is voided, then this same case
will become useless and moot, but in the
contrary result, whereby the same sale is
upheld, then the legal redemption sought in
this subsequent case may lie.
8) RS POSITION: in the civil case still pending
before the CFI of Quezon, Gumaca Branch,
the question of compulsory redemption
under Section 119 of the Public Land Act
was invoked by Pablo Arceo as defendant
therein by way of compulsory counterclaim
in his answer whereas the very same issue
was asserted in the instant appealed case
by way of cause of action by plaintiff-
appellant. There was, therefore, merely a
change of the position of the parties from
plaintiff to defendant and vice-versa in said
two civil cases although the existence of the
same principal issue remains unaltered.
WON LISTIS PENDENS IS IN ORDER?
YES.
1) Pendency of another suit between the same
parties to be a ground for dismissal requires:
1) Identity of parties or at least such as
representing the same interest in both
actions; 2) Identity of rights asserted and
prayed for, the relief being founded on the
same facts; and 3) the Identity in both cases
is such that the judgment which may be
rendered in the pending case, regardless of
which party is successful, would amount to
res judicata in the other case.
2) It is not disputed that there is another case,
Civil Case No. 435-G, pending between
plaintiff-appellant Pablo Arceo and
defendants-appellees Jose Oliveros and
Rufina Cabangon. That case involves the
same parcel of land and similar issues as
those in Civil Case No. C-105. In the said
case, the Oliveros spouses as plaintiffs,
impugn the extrajudicial settlement
between Sixta and Pablo wherein the former
renounced her right over the disputed lot in
favor of the latter and seek to annul the
transfer certificate of title issued to Pablo
Arceo over the said lot. Said spouses based
their action upon a claim of ownership over
the land pursuant to a Deed of Absolute Sale
19
whereby Sixta Arceo sold to them her
definite or specific share in the homestead
she and her brother inherited from their
father. In his Answer in the said case (Case
No. 435-G) Pablo Arceo, as defendant, sets
up by way of counterclaim his right of
compulsory redemption over the same lot
pursuant to Sec. 119 of the Public Land Act,
claiming further that the property has never
been partitioned between him and her sister
Sixta.
3) This is exactly what plaintiff-appellant Pablo
Arceo seeks to accomplish in Civil Case No.
C-105-to exercise his right of compulsory
redemption. In short, in both Civil Case No.
435-G and Civil Case No. C105, the parties
herein are litigating over the same subject
matter (the lot inherited by the Arceos from
their father) and on the same issues
validity of the sale made by Sixta Arceo to
the Oliveros spouses; and Pablo Arceo's right
of compulsory redemption under Section
119 of the Public Land Act as a co-heir of his
sister Sixta. The only difference being, that
in Civil Case No. C-105, Pablo Arceo asserts
this right of compulsory redemption as a
cause of action in his complaint; whereas, in
Case No. 435-G he asserts said claim by way
of counterclaim, which makes no difference
anyway
4) For while lis pendens is normally
interposed as a defense when another
case is pending upon the same cause of
action between the same parties in two
complaints, it may also be interposed
even if said claim is set forth by way of
a counterclaim since the latter
partakes the nature of a complaint by
the defendant against the plaintiff
5) For even on the assumption that the sale by
Sixta in favor of the Oliveros spouses is
upheld still the second case, Civil Case No.
C-105, will be useless because plaintiff-
appellant is not deprived of litigating against
the Oliveros on the issue of his claimed
compulsory counterclaim in Civil Case No.
435-G by reason of having set it up in his
counterclaim in the said case.
6) The principle upon which a "plea of another
action pending" is sustained is that the
latter action is deemed unnecessary and
vexatious
BUAN V LOPEZ
145 SCRA 34
NARVASA; October 13, 1986
NATURE
Special civil action for prohibition that
Gemiliano C. Lopez, Jr., acting as Mayor of the
City of Manila, be "perpetually prohibited from
arbitrarily, whimsically and capriciously
revoking or cancelling . . . their licenses or
permits (as hawkers or street vendors) and
threatening the physical demolition of their
respective business stalls in the places specified
in such licenses or permits. They also sought a
temporary restraining order in view of Mayor
Lopez' actual threats of physical demolition of
their respective small business establishment at
12:00 noon today." This the Court granted on
the same day.
FACTS
1) July 7, 1986 > RTC Manila, a special civil
action of "prohibition with preliminary
injunction" against Acting Manila City Mayor
Lopez was filed by Samahang Kapatiran Sa
Hanapbuhay Ng Bagong Lipunan, Inc
composed, according to the petition, of
"some 300 individual owners and operators
of separate business stalls . . . mostly at the
periphery immediately beyond the fence of
the Quiapo Church." The petition is
grounded on the facts that the members of
the Samahan had been legitimately
engaged "in their respective business of
selling sundry merchandise, more
particularly religious articles, flowers and
ornamental plants, and medicinal herbs;"
they had been religiously paying "the
corresponding license and permit fees
imposed by prevailing ordinances of the City
of Manila," but this notwithstanding they
had been given written notice dated May 3,
1986 emanating from the Mayor's Office,
advising of the cancellation of their permits
and their possible relocation to another site;
and these acts "are unjust, illegal, arbitrary,
oppressive and constitute grave abuse of
discretion on the part of the respondent."
2) August 5, 1986 > ROSALINA BUAN
(President), RODOLFO TOLENTINO, TOMAS
MERCADO, CECILIA MORALES, LIZA OCAMPO
(Press Relations Officer), Quiapo Church
Vendors, for themselves and all others
similarly situated as themselves, claim to be
five of about 130 "licensed and duly
authorized vendors of . . . religious articles,
medicine herbs and plants around the
Quiapo Church, Manila," bringing suit 'for
themselves and all others similarly situated
as themselves." They allege that
a) their licenses were revoked or cancelled
(by Lopez) for reasons unknown to them
which is tantamount to deprivation of
property without due process of laws,"
written notice of such cancellation
having been served on them on or about
May 30 (actually May 3), 1986
b) the revocation of their licenses was
beyond respondent Mayor's competence,
since Section 171 (n) of the Local
Government Code (B.P. Blg. 337)
authorizes the same only "for violation of
the law or ordinances or conditions upon
which they have been granted," and no
such violation had been committed by
them; but this notwithstanding, Lopez
"bad given (them) an ultimatum of 7:00
up to 12:00 o'clock in the afternoon" (of
August 5, 1986) to vacate the premises
where their respective stalls are situated
or suffer physical demolition thereof."
ISSUE
WON, given the RTC Manila case and the case at
bar, the action can continue?
HELD
NO, action must be abated on the ground of lis
pendens, or more correctly, auter action
pendant; pendency of another action between
the same parties for the same cause.
Doctrine The acts of petitioners constitute a
clear case of forum-shopping, an act of
malpractice that is proscribed and condemned
as trifling with the courts and abusing their
processes. It is improper conduct that tends to
degrade the administration of justice. The rule
has been formalized in Section 17 of the Interim
Rules and Guidelines issued by this Court on
January 11, 1983 in connection with the
implementation of the Judiciary Reorganization
Act, specifically with the grant in Section 9 of
B.P. Blg. 129 of equal original jurisdiction to the
Intermediate Appellate Court to issue writs of
mandamus, prohibition, etc., and auxiliary writs
or processes, whether or not in aid of its
appellate jurisdiction Thus, the cited Rule
provides that no such petition may be filed in
the Intermediate Appellate Court 'if another
similar petition has been filed or is still pending
in the Supreme Court' and vice versa. The Rule
orders that 'A violation of the rule shad
constitute contempt of court and shall be a
cause for the summary dismissal of both
petitions, without prejudice to the taking of
appropriate action against the counsel or party
concerned.' The rule applies with equal force
where the party having filed an action in the
Supreme Court shops for the same remedy of
prohibition and a restraining order or injunction
in the regional trial court . . . (or vice versa).
Reasoning
1) There exists identity of parties, or at least
such parties as represent the same interests
in both actions, as well as identity of rights
asserted and relief prayed for, the relief
being founded on the same facts, and the
identity on the two preceding particulars is
such that any judgment rendered in the
other action, will regardless of which party is
successful, amount to res adjudicata in the
action under consideration: all the
requisites, in fine, of auter action pendant.
2) after the filing by Buan and Ocampo of the
petition in this case, they came to the
belated realization of the pendency of the
identical action filed by them in the RTC,
they were vulnerable to the accusation of
"forum shopping," and thus amenable to its
dire consequences. This explains the filing of
a:
 > "MANIFESTATION WITH AFFIDAVIT OF
WITHDRAWAL" on August 11, 1986
> "MANIFESTATION AND MOTION" on
August 29, 1986
> "URGENT MANIFESTATION AND
MOTION TO STRIKE-OUT THE NAME
ROSALINA BUAN AND LIZA OCAMPO" on
September 13, 1986
3) In these manifestations the claim is made
that the five (5) petitioners in the action before
this Court who are members of the Samahan,
"were forcibly brainwashed and guarded by Atty.
Aralar and his associates to accede to the
invitation of the said counsel to appear for them
and file the case before the Honorable Court
knowingly that he was furnished the status quo-
order of the same case pending before the RTC
Manila, and/or said Atty. Aralar and his
associates had perpetrated "piracy" of clients
and "should be condemned and suspended for
committing act of 'shopping for courts.
- The claim does not inspire belief. It is so out of
the ordinary as to require clear and convincing
evidence of its actuality, which is lacking in this
case. It is also belied by the fact that Buan and
Ocampo themselves were among those who
verified the petition at bar before a notary
public. And the claim is undermined by the
misrepresentation in Buan's and Ocampo's
"Joint Affidavit of Withdrawal" that the status
quo order in RTC was still subsisting and the
case still pending trial when in truth, the case
had already been dismissed and the restraining
order lifted by Order of July 27, 1986.
4) The petitioners have no basis whatever to
postulate a right to ply their trade in the Quiapo
area or elsewhere because the few receipts
submitted by petitioners which all set out expiry
dates before August 5, 1986 thus making the
non-renewal argument puerile.
5) Action for prohibition has become moot and
academic. The Petitioners permits and licenses
have all expired; hence, there can be no
occasion of the inhibition of any revocation or
cancellation thereof. And the "physical
demolition of their respective business stalls"
has already been consummated.
Disposition Petition is denied for lack of merit,
and RTC is commanded to dismiss Civil Case
and to conduct no further proceedings in
connection therewith save in accordance with
and in implementation of this Decision.
INVESTORS FINANCE CORPORATION V.
EBARLE
J. SARMIENTO
FACTS:
1) in Ozamis City, Flaviano Fucoy Jr., for value
received, executed a promissory note in
favor of Lido Motor Sales Ozamis in the
amount of P56,976.00 which he promised to
pay in 48 equal, successive, monthly
installments. Jose Mariano O. Tan signed the
promissory note as a co-maker
2) On the same day, to guarantee the payment
of the promissory note in accordance with
its terms, the promissors executed a chattel
mortgage 2 over the purchased car in favor
of the promissee. Also, on the same date,
mortgagee Lido Motor Sales Ozamis
executed a Deed of Assignment of all its
title, rights, equities, and interests
(excluding obligations to the buyers for
services and warranties which the
mortgagee-assignor retained) to, in, and/or
arising out of the Deed of Chattel Mortgage
with promissory note, in favor of Investors'
Finance Corporation, the herein petitioner.
3) For non-payment of four (4) monthly
installments the petitioner corporation, as
mortgagee, filed a verified Complaint For
Replevin With Damages with CFI Misamis
Oriental WRIT WAS ISSUED
4) The writ could not be implemented because
the car was not in the possession of the
mortgagors-defendants. It was only more
than a year later that the car was found in
the possession of the herein private
respondent, Romeo Ebarle, of Pagadian City.
Due to the difficulty, not to say danger, of
getting the car from him because of his
bodyguards, Romeo Ebarle being the son of
former Provincial Governor Bienvenido
Ebarle, a prominent political mogul not only
in Pagadian City but also in the province of
Zamboanga del Sur and in the entire Region
IX, and the brother of the then incumbent
Assemblyman representing Region IX,
Renato Ebarle, the petitioner filed a Motion
For Approval To Deputize And Authorize A
Military Personnel To Serve The Alias Writ Of
Relevin And Alias Summons. The motion was
granted.
5) The trial court appointed Technical Sergeant
(TSgt., for short) Antonio Ibonia of the
Philippine Constabulary as special deputy
sheriff and authorized him "to serve the
alias summons and alias writ of replevin
issued in this case (C.C. No. 8782) on the
defendants at their respective addresses
6) TSgt Ibonia, as special deputy Sheriff to
serve the summons and implement the Alias
Writ of Replevin, seized the car and placed it
in the custody of the military authorities at
Tubod Lanao del Norte for safekeeping. On
the following day, as a result of a written
agreement between the lawyers of the
petitioner and the private respondent,
stipulating payment by the latter of the
balance of the mortgage indebtedness
incurred originally by Flaviano Fucoy Jr. and
Jose Mariano Tan, subject to verification by
the petitioner's counsel as to the
correctness of the amount, the car was
returned to the private respondent
7) Evidently, mortgagors Flaviano Fucoy Jr. and
Jose Mariano Tan transferred the possession
of the car to private respondent Romeo
Ebarle without the consent of the petitioner.
Thus the car remained registered in the
 name Flaviano Fucoy Jr., even when it was
seized by Special Deputy Sheriff Ibonia,
under Registration Certificate No.
RCM368382 of the Ozamiz LTC Office.
8) In the second week of November, 1983, the
petitioner sent to the private respondent a
computation of the unpaid balance due from
the mortgagors, which turned out to be
higher than the computation at Tubod Lanao
del Norte. The private respondent refused to
pay.
9) On December 13, 1983, the private
respondent commenced a suit for Damages
and Discharge of Chattel Mortgage with
Preliminary Injunction in the Regional Trial
Court, 9th Judicial Region, Branch XXII,
Pagadian City, docketed as Civil Case No.
2312, against the petitioner, Investors'
Finance Corporation, and Special Deputy
Sheriff Antonio lbonia, who enforced the writ
of replevin on October 19,1983
a) alleged that he was a well-known
personality in Pagadian City, he being
the son of the former govemor of the
province and a brother of an
assemblyman; that he had paid his
obligations to the petitioner but it
refused to issue a receipt; and that he
was humiliated and embarrassed by the
seizure of his car. He prayed "(T)hat
pending hearing of the main case a writ
of preliminary injunction be issued
against the defendants' (herein
petitioner and Special Deputy Sheriff
lbonia), that "the chattel mortgage of the
car be discharged," and for moral and
corrective damages, attorney's fees, and
a general prayer "for other remedies and
relief provided for under the law under
the present circumstance."
10) In the its answer, the petitioner herein
prayed for the dismissal of the case.20 In a
subsequent Motion For Preliminary Hearing
Of Affirmative Defense As If A Motion To
Dismiss Have (Sic) Been Filed, the petitioner
reiterated in its answer the averment of the
"pendency of another action involving the
same parties, interests, rights and vehicle."
11) After the filing of the Opposition and
Rejoinder, on November 15, 1984, the
respondent trial court issued a writ of
preliminary mandatory injunction requiring
the petitioner to return the car even while its
motion to dismiss had not yet been
resolved CA dismissed the petition
MR denied
WON THE CA ERRED IN DISMISSING PS
PETITION?
YES.
1) An action is dismissable on the ground that
there is another action pending between the
same parties for the same cause, if the
following requisites concur:
a) identity of parties, or at least such as
representing the same interests in both
actions;
b) identity of rights asserted and relief
prayed for, the relief being founded on the
same facts; and
c) the identity in the two cases should be
such that the judgment that may be
rendered in one would, regardless of which
party is successful amount to res judicata in
the other
2) Corollary to Section 1(e) of Rule 16 of the
Rules of Court is the prohibition against
splitting a single cause of action. Thus,
under Section 4, Rule 2, ("I)f two or more
complaints are brought for different parts of
a single cause of action, the filing of the first
may be pleaded in abatement of the other
or others, in accordance with Section 1(e) of
Rule 16, and a judgment upon the merits in
any one is available as a bar in the others."
The former is the principle of litis pendentia
or lis pendens, while the latter is that of res
judicata. The doctrine of res judicata
requires, among others, identity of parties
as an indispensable condition. However, this
Identity does not mean total identity of all
parties
3) Like res judicata as a doctrine, litis
pendentia as a principle is also a sanction of
the public policy against multiplicity of suits.
This being so, the inclusion of another party
does not by itself preclude the application of
section 1(e) Rule 16 assuming that all the
requisites are present. Otherwise stated, the
inclusion of new parties in the second action
does not remove the case from the
operation of the rule of litis pendentia as
long as the primary litigants are also parties
in the first action. A different rule would
render illusory the principle of litis
pendentia. The facility of its circumvention is
not difficult to imagine given the
resourcefulness of lawyers.
4) In Civil Case No. 8782 before the then Court
of First Instance of Misamis Oriental, 15th
Judicial District, Branch XVII, Cagayan de
Oro City, the plaintiff is the petitioner
corporation and the defendants are Flaviano
Fucoy Jr., Jose Mariano Tan, and a John Doe.
John Doe, later, turned out to be private
respondent Romeo Ebarle who was the
unauthorized transferee but in actual
possession of the car. In Civil Case No. 2312
before the Regional Trial Court, 9th Judicial
District, Branch XXII Pagadian City, the
plaintiff is the same private respondent
Romeo Ebarle while the defendants are the
petitioner corporation and Antonio Ibonia
the Special Deputy Sheriff, an officer of the
 law who enforced the writ of replevin in
compliance with the order of the then Court
of First Instance of Misamis Oriental, Branch
XVII, at Cagayan de Oro City. It is clear that
lbonia is not a real party in interest in the
Pagadian case. There, the real parties in
interest, the principal protagonists are
Investors' Finance Corporation and Romeo
Ebarle. They are the same Identical real
parties in interest, the principal protagonists
in the Cagayan de Oro case. This
concurrence suffices to satisfy the
requirement of Identity of parties in the
principle of litis pendentia.
5) IDENTITY OF RIGHTS: The contempt charge
in the Pagadian City case deserves scant
consideration. It is merely an incident of the
alleged non-compliance of the preliminary
mandatory injunction by the Branch
Manager and lawyer of the petitioner as wen
as the Special Deputy Sheriff
6) The true subject matter of the controversy is
the car (Corolla, 4-door de luxe Sedan,
bearing Engine No. 4k-5021908). The
primary objective of the plaintiff, the
petitioner herein, in the Cagayan de Oro
case is the enforcement of the chattel
mortgage due to non-payment of the
balance of the purchase price of the said
car. On the other hand, the plaintiff, the
private respondent herein, in the Pagadian
case, seeks as his primordial relief, the
discharge of the chattel mortgage over the
same car due to alleged full payment of all
the installments on the price of the same.
7) The denial of the motion to dismiss filed by
the herein petitioner before the Pagadian
court, resulted to a chaotic as well as a
ridiculous situation for the parties. As the
Cagayan de Oro court issued, on March
30,1984, a Second Alias Writ Of Replevin for
the seizure of the car to be disposed of
according to the Chattel Mortgage Law, the
Pagadian court, also issued, more than
seven months later, a preliminary
mandatory injunction ordering the Deputy
Provincial Sheriff of Zamboanga del Sur "to
take possession of the subject property (the
car). . . and forthwith deliver it to the
plaintiff' (private respondent herein).
8) An action for damages against the person
obtaining the writ of replevin and the sheriff
who enforced the writ of replevin, assuming
that the seizure of the property was
unlawful, should be litigated in the replevin
suit and not by independent action.
9) Moreover, under Section 2 of Rule 60 of the
Revised Rules of Court, delivery of personal
property subject matter of the controversy
should be made on orders of the court only
if the plaintiff puts up a bond double the
value of the property as stated in his
affidavit. This replevin bond answers for the
damages that may be awarded to the
defendant in case the action will not
prosper. In the Cagayan de Oro court, the
petitioner filed a bond as required.
RES JUDICATA AND STATUTE OF
LIMITATIONS
OROPEZA MARKETING CORP. V. ALLIED
BANKING CORP.
FACTS:
1) Allied Banking Corporation (Allied Bank, for
brevity) extended a loan of P780,000, with
interest at 22% per annum, to petitioners
Oropeza Marketing Corporation (OMC) and
the spouses Oropeza. The loan was payable
at a monthly amortization of P20,000,
subject to a penalty of 1.0% per month in
case of non-payment, until the obligation
was fully paid
2) To secure this obligation, petitioners
executed Promissory Note No. DSP#0191/82
in Allied Bank's favor. In addition, the
spouses Oropeza executed a Continuing
Guaranty/Comprehensive Surety Agreement
(without need for demand) + REM
3) Due to financial constraints, petitioners
allegedly defaulted and reneged on their
obligation. Thus, Allied Bank filed a
collection suit with an application for a writ
of preliminary attachment with RTC Davao
4) While its application for a writ of attachment
was pending, Allied Bank discovered that
the Oropeza spouses had executed an
Absolute Deed of Sale with Assumption of
Mortgage in favor of Solid Gold Commercial
Corporation, covering most of petitioner
spouses' real properties, including those
mortgaged to respondent.
5) Allied Bank then filed a complaint for the
annulment of said Deed of Sale (RTC Davao)
+ a separate criminal complaint for
fraudulent insolvency under Article 314 of
the Revised Penal Code (in a different rtc
branch)
6) Meanwhile, the court granted their prayer
for a WPA and fixed the amount of the
attachment bond at P2,378,224.10. Allied
Bank, however, failed to submit an
attachment bond and instead moved that
the service of the summons upon petitioner
be held in abeyance. Consequently, the case
was archived by the lower court in its order
of June 7, 1989
7) The lower court ordered the revival of the
Civil Case No. 19325-88, but held in
abeyance respondent's motion to reduce the
amount of the bond.
8) Respondent moved for the suspension of the
proceedings in Civil Case No. 19325-88,
citing the pendency of Criminal Case No.
18518-89. The lower court granted the
motion and again ordered Civil Case No.
19325-88 archived. Allied Bank then moved
for reconsideration resulting in the
 reopening of Civil Case No. 19325-88, with
respect to OMC alone.
9) RTC rendered judgment (civil case) in favour
of R (promissory note however declared
void) CA (later dismissed MR DENIED)
a) The appellate court's decision in CA-
G.R. CV No. 41986 shows that the
Court of Appeals sustained the
finding of the trial court in Civil
Case No. 19634-89 that the Deed of
Sale With Assumption of Mortgage
was valid and that Allied Bank's
action to rescind it had already
prescribed. The appellate court also
held that the promissory note relied
upon by Allied Bank was spurious,
because it failed to adduce evidence
to disprove the claim of the Oropeza
spouses that they had paid their
loans to Allied Bank and that said
promissory note had no
consideration
10) Meanwhile, on August 13, 1993, upon
respondent's motion, the lower court
declared petitioners as in default for failure
to file an answer.
11) On February 21, 1994, the lower court
hearing Civil Case No. 19325-88, dismissed
respondent's complaint on the ground of litis
pendentia
12) Dissatisfied with this turn of events,
respondent elevated the case to the
appellate court REINSTATED THE OTHER
CIVIL CASE
Does the decision of the Court of Appeals
in CA-G.R. CV No. 41986 constitute res
judicata insofar as Civil Case No. 19325-88
is concerned?
YES.
1) Res judicata literally means "a matter
adjudged; a thing judicially acted upon or
decided; a thing or matter settled by
judgment."
2) Res judicata lays the rule that an existing
final judgment or decree rendered on the
merits, and without fraud or collusion, by a
court of competent jurisdiction, upon any
matter within its jurisdiction, is conclusive of
the rights of the parties or their privies, in all
other actions or suits in the same or any
other judicial tribunal of concurrent
jurisdiction on the points and matters in
issue in the first suit.
3) The principle of res judicata has two
aspects, namely: (a) "bar by prior judgment"
as enunciated in Rule 39, Section 49 (b) of
the 1997 Rules of Civil Procedure; and (b)
"conclusiveness of judgment" which is
contained in Rule 39, Section 47 (c).
4) There is "bar by prior judgment" when, as
between the first case where the judgment
was rendered and the second case that is
sought to be barred, there is identity of
parties, subject matter, and causes of action
5) CONCLUSIVENESS OF JUDGMENT: But where
there is identity of parties in the first and
second cases, but no identity of causes of
action, the first judgment is conclusive only
as to those matters actually and directly
controverted and determined and not as to
matters merely involved therein (any right,
fact, or matter in issue directly adjudicated
or necessarily involved in the determination
of an action before a competent court in
which judgment is rendered on the merits is
conclusively settled by the judgment therein
and cannot again be litigated between the
parties and their privies whether or not the
claim, demand, purpose, or subject matter
of the two actions is the same)
6) The elements of res judicata are: (1) the
judgment sought to bar the new action must
be final; (2) the decision must have been
rendered by a court having jurisdiction over
the subject matter and the parties; (3) the
disposition of the case must be a judgment
on the merits; and (4) there must be as
between the first and second action,
identity of parties, subject matter, and
causes of action
7) The rule is that a party may not evade the
application of res judicata by simply
including additional parties in subsequent
litigation or by excluding parties in the later
case certain parties in the previous suit
a) In other words, the fact that OMC was
not a party in Civil Case No. 19634-89
and CA-G.R. CV No. 41986, does not
nullify the effect of the judgments issued
in these cases on the other case, Civil
Case No. 19325-88.
8) With respect to identity of subject matter,
this is included in identity of causes of
action. When there is identity of the cause
or causes of action, there is necessarily
identity of subject matter. But the converse
is not true, for different causes of action
may exist regarding the same subject
matter, in which case, the conclusiveness of
judgment shall be only with regard to the
questions directly and actually put in issue
and decided in the first case.
a) COMPARING THE TWO CIVIL CASES, It is
apparent that alleged violations of
respondent's legal rights by petitioners
differ, as the acts or omissions
complained of the two civil cases, basing
on the recitation of their facts which are
different.
b) The test to determine the identity of
causes of action is to consider whether
the same evidence would sustain both
causes of action
c) We find that in Civil Case No. 19325-88,
Allied Bank will have to present evidence
showing the existence of the loan and
petitioners' failure to comply with their
bounden duty to pay such loan in
accordance with the terms of the
promissory note executed by petitioners.
 However, in Civil Case No. 19634-89,
respondent's evidence must establish
and prove its allegations to the effect
that: (a) petitioners secured a loan from
it; (b) said loan was secured by a
promissory note and a mortgage over
properties owned by the Oropezas; (c)
petitioners failed to pay their debt; and
(d) petitioners sold the mortgaged
properties with intent to defraud
respondent bank.
d) The evidence to support Allied Bank's
cause of action in Civil Case No. 19325-
88 is included in and forms part of the
evidence needed by respondent bank to
support its cause of action in Civil Case
No. 19634-89. The converse, however,
not true. The evidence needed in Civil
Case No. 19634-89 does not necessarily
form part of the evidence needed by
respondent in Civil Case No. 19325-88.
Accordingly, we find that the evidence to
sustain the respective causes of action in
the two cases is not exactly the same.
Perforce, we must rule that there is no
identity between the causes of action in
Civil Case No. 19325-88 and Civil Case
No. 19634-89.
9) There being substantial identity of parties
but no identity of causes of action, the
applicable aspect of res judicata in the
instant case is "conclusiveness of
judgment." There is conclusiveness of
judgment only as to the matters actually
determined by the trial court in Civil Case
No. 19634-89, as affirmed by the Court of
Appeals in CA-G.R. CV No. 41986. These
include the findings that: (1) the promissory
note relied upon by respondent bank is
spurious; and (2) that the loan obligation of
the Oropeza spouses has been settled and
paid.
CARANDANG V. VENTURANZA
J. GUTIERREZ
FACTS:
1) Petitioners are the surviving heirs of the late
Protacio Carandang who, during his lifetime,
owned and possessed together with his
spouse Iluminada, a parcel of land, duly
registered in his name
2) Because the property was saddled with
claims of relatives of Protacio as alleged co-
heirs to certain hereditary shares on the
land, a case was filed against the spouses
Carandang
3) The latter, being unlettered, sought the
professional help of respondent Gregorio
Venturanza, a long-time neighbor, lawyer
and friend, who was then a Municipal Judge
of Victoria, Oriental Mindoro.
4) Pursuant to the advice and assistance of the
judge, the spouses Carandang subscribed to
a Deed of Absolute Sale in favor of
respondent spouses Pomposa G. Venturanza
allegedly with the specific understanding
that after the relatives' claims shall have
been fully settled, title to the subject land
would be given back to Protacio Carandang.
5) In the meantime, the transfer certificate of
title in the name of Protacio was cancelled
and in lieu thereof, a transfer certificate of
title in the name of respondent spouse
Pomposa was issued by the Register of
Deeds of Oriental Mindoro.
6) His relatives then filed a civil case against
him declaration of nullity of the Deed of
Sale executed by the deceased in favor of
respondent Pomposa Venturanza
7) A decision was rendered by the court in
favor of the defendants (Protacio Carandang
and Sps. Venturanza)
8) On appeal the Court of Appeals (now
Intermediate Appellate Court) affirmed the
lower court's decision. The claims of the
relatives of the deceased Protacio were
finally denied
9) Pursuant to the alleged understanding
between the late Protacio and the spouses
Venturanza, the Carandangs repeatedly
requested from the latter the return of the
title to the land in question over which they
had continually exercised ownership, their
possession never having been disturbed by
the Venturanzas. The respondents
consistently refused and interposed
ownership by virtue of the final decision in
CA-G.R. No. 42539-R. Upon investigation by
the petitioners, they discovered that the
transfer certificate of title in the name of
respondent Pomposa had been subsequently
cancelled and replaced with two transfer
certificates of title also in the name of
Pomposa after the land was subdivided.
Hence, a complaint was filed by the heirs of
Protacio against the respondent spouses
Venturanza before the Court of First Instance
of Oriental Mindoro
10) Rs filed a motion to dismiss
a) GROUND: res judicata, invoking the court
judgment declaring the sale to be valid
b) COURT: MTD SUSTAINED
11) Hence, this petition
WON THE COURT ERRED IN GRANTING RS
MTD?
1) The doctrine of res judicata is an old axiom
of law, dictated by wisdom and sanctified by
age, and is founded on the broad principle
that it is to the interest of the public that
there should be an end to litigation by the
same parties and their privies over a subject
once fully and fairly adjudicated
2) For res judicata to apply: (a) the former
judgment must be final; (b) it must have
been rendered by a court having jurisdiction
of the subject matter and of the parties; (c)
it must be a judgment on the merits; and (d)
there must be, between the first and second
actions identity of parties, of subject matter,
and of cause of action
3) The existence of the first three requisites in
the case at bar is not disputed. However,
the issue of whether or not there is Identity
of parties and cause of action between the
two cases in question as to bar the later
action brings this case before us.
4) Anent the criterion of identity of parties, a
situation obtains whereby the parties
Protacio Carandang and the spouses
Venturanza, formerly co-defendants in a
case brought against them, now find
themselves protagonists in opposite camps.
Because of such adverse relationship, the
question arises whether or not the judgment
in the first case in which both parties were
defendants is conclusive in a subsequent
litigation between the two.
5) GR: The estoppel however is raised only
between those who were adverse parties in
the former suit, and the judgment therein
ordinarily settles nothing as to the relative
rights or liabilities of the co-plaintiffs or co-
defendants inter sese, unless their hostile or
conflicting claim were actually brought in
issue."
6) IN THE CASE AT BAR: Based on the above
ruling, there can be no identity of parties
between the first and second cases as to bar
the latter case. Moreover the qualifications
to the above rule are, themselves, not
applicable.
7) Estoppel does not work against co-parties in
a prior case "unless their hostile or
conflicting claims were actually brought in
issue" ... "by cross-petition or separate and
adverse answers
8) No such thing appears in the records so as
to bring the present case under the above
qualification to the rule. The petitioners'
present claims have never been set forth in
Civil Case No. R-2149, nor were they
litigated therein. Only insofar as the decision
of the respondent court in the earlier case
declares the Deed of Sale between
deceased Protacio Carandang and the
spouses Venturanza valid and subsisting
between them will the rule of res judicata
apply. But even if the judgment rendered
upon the validity of the deed of sale
between the parties in Civil Case No. 2149 is
conclusive between the same parties in the
subsequent action, Civil Case No. 2480
involving the same deed of sale, the
petitioners' case is not anchored on this
issue.
9) Respondents allege that the main issue in
both cases is the question of ownership.
They state that this question has been
adjuged in their favor and they may no
longer be sued by petitioners on the same
cause. At first blush, the validity of such an
argument appears convincing. However, a
more careful study of the respective
contentions of the parties inclines us to
uphold the contrary. The present cause of
action is not a basis for a finding of res
judicata.
10) A comparison alone of the complaints in
both cases reveals a difference in objectives.
Civil Case No. R-2149 brought by Trinidad
Moreno and others against the parties
herein had for its purpose the annulment of
the sale of the property under litigation and
the recovery of hereditary rights. On the
other hand, Civil Case No. R-2480 brought
by the petitioners against the spouses
Venturanza seeks the reconveyance of
property or recovery of ownership on the
basis of a trust agreement between the
parties. Petitioners do not seek the
annulment of the Deed of Sale which they
had executed in favor of the respondents
nor do they question the respondents'
ownership of the property by virtue of the
deed(ENFORCE MENT OF A TRUST
AGREEMENT)
11) DAPAT RULE ON CONCLUSIVENESS OF
JUDGMENT DAW YUNG ISSUE
MANILA ELECTRIC CO. V. CA
J. MELENCIO-HERRERA
FACTS:
1) On February 12, 1948, respondent Pedro J.
Velasco (VELASCO, for short) purchased
three (3) lots from the People's Homesite
and Housing Corporation (PHHC, for short),
located at the corner of the then South D
and South 6 Streets of Quezon City.
2) The Deed of Sale, among others, provided
that: properties be used exclusively for
residential purposes; vendor ... shall have
the right to enter the premises ... for the
purpose of ... installing electric ... lines or
any other utility for the community; violation
of any of which shall entitle the Vendor to
rescind this contract and seek the
cancellation of the title issued as a result
hereof and to repossess the property and
dispose of the same; binding upon the heirs,
executors, administrators, successors and
assigns of the respective parties
3) On January 31, 1952, VELASCO sold two of
the aforesaid three lots (the PROPERTY, for
short) to petitioner Manila Electric Company
(MERALCO, for short), which is the public
service company furnishing electric current
to the Manila area, including Quezon City.
4) The following year, MERALCO established a
substation within the PROPERTY, the
construction of which "was started in
September, 1953 and was finished the
following November
5) On November 29, 1954, VELASCO wrote a
letter to MERALCO stating a complaint about
the noise
6) The following year, on February 1, 1955,
VELASCO filed a complaint in Civil Case No.
Q-1355 of the Court of First Instance of Rizal
(the NUISANCE CASE, for short) praying that
MERALCO be ordered "to remove and abate
 the nuisances herein complained against,"
with damages DISMISSED APPEAL
PRIOR DECISION REVERSED AND SET
ASIDE ordered MERALCO to either transfer
its sub-station at South D and South 6
Streets, Diliman, Quezon City, or take
appropriate measures to reduce its noise at
the property line between the defendant
company's compound and that of the
plaintiff-appellant to an average of forty (40)
to fifty 50 decibels within 90 days from
finality of this decision
7) In the meanwhile, on November 23, 1957,
VELASCO had instituted a complaint in Civil
Case No Q-2716 of the Court of First
Instance of Rizal (the CANCELLATION CASE,
for short) for the rescission of the sale of the
PROPERTY to MERALCO and to collect rentals
for the use and occupation of the PROPERTY
while in the latter's possession
DISMISSED the NUISANCE CASE and the
CANCELLATION CASE had split VELASCO'S
cause of action such that the CANCELLATION
CASE was precluded from being instituted
8) CA: judgment of the trial Court was reversed
on the finding that no cause of action was
split, considering that abatement of
nuisance was distinct and separate from
rescission of the contract of sale in favor of
ME RALCO
THE SC RULES TO REVERSE AND SET ASIDE
THE CA DECISION
1) THE RIGHT OF ACTION.- The contract of sale
between PHHC and VELASCO provided that
only constructions exclusively for
"residential purposes" shall be built on the
PROPERTY. That requirement, naturally, was
binding on VELASCO himself, as it is also
binding on MERALCO as his assignee. Be
that as it may, that contract implies that it is
PHHC itself which has the right of action
against any assignee of VELASCO.
Cancellation of the title to the PROPERTY
would be by virtue of the condition imposed
in the PHHC- VELASCO contract, and not by
virtue of the contract between VELASCO and
MERALCO
2) RESIDENTIAL PURPOSES.As the Court
understands it, PHHC's requirement in
regards to "residential purposes" has not
been made particularly in reference to the
three lots sold to VELASCO, but it relates to
the entirety of a bigger parcel of land
subdivided for sale to the public by PHHC.
the term "residential purposes", therefore,
should be given a meaning viewed from the
standpoint of PHHC, and not from that of
VELASCO. From the PHHC, or community,
point of view, the construction of an electric
sub-station by the local electric public
service company within the subdivision can
be deemed encompassed within "residential
purposes" for the simple reason that
residences are expected to be furnished with
electrical connection. If there is no electric
current because of the lack of a sub- station,
the residences within the entire subdivision
area could be valueless for residential
purposes (CONTRACT PROVISION + GRANT
OF BUILDING PERMIT)
3) CONTRACTUAL ESTOPPEL.- Even if the
requirement for "residential purposes" were
a condition imposed by VELASCO himself in
the contract of sale between VELASCO and
MERALCO, the former can no longer cancel
the contract on the alleged violation of the
condition. When MERALCO erected the sub-
station in September, 1953, VELASCO did
not object to its construction as such.
4) COLLATERAL ESTOPPEL BY JUDGEMENT-
MERALCO had pleaded before the trial Court
that the filing of the NUISANCE CASE "has
barred the filing of the complaint in this"
CANCELLATION CASE. The trial Judge
dismissed the Complaint on the ground that
the NUISANCE CASE and the CANCELLATION
CASE had split a single cause of action and
that the CANCELLATION CASE being the
later proceeding was improperly instituted.
We agree with the Appellate Tribunal that
there was no split of a single cause of
action, because the cause of action for
abatement of nuisance is different from a
cause of action for cancellation of contract.
However, it does not mean that a judicial
proceeding cannot be barred by a previous
case involving another cause of action. The
principle applicable would be estoppel by
judgment or, more specifically, "collateral
estoppel by judgment".
a) Although there are some cases that
confine the term "res judicata" to that
aspect of the doctrine which precludes
the relitigation of the same cause of
action the term, in its literal meaning of
a "matter adjudged", is broad enough to
include, in addition, the other aspect of
the doctrine, which precludes the
relitigation of the same facts or issues in
a subsequent action on a different cause
of action, and the term "res judicata" is,
indeed, so used in numerous cases. In
this respect, it has been declared that if
a party is barred from relitigating a
matter, it can make little difference to
him by what name the lethal doctrine is
called. On the other hand, the confusion
and looseness of thought resulting from
the absence of distinctive terms to
describe each aspect of the doctrine has
been well pointed out.
b) The term "estoppel" has frequently been
used in connection with the doctrine of
res judicata, not only with respect to the
relitigation of particular issues in a
subsequent action on a different cause
of action, but also with respect to the
relitigation of the same cause of action.
In some cases, the term "estoppel by
judgment" has been used to described
the effect of a judgment to preclude
 relitigation of the same cause of action,
and the phrase, "estoppel by verdict", to
describe the effect of the former
proceeding to preclude further litigation
of the particular facts on which the jury
necessarily made findings in the former
action. The decisions have not, however,
been uniform in this respect, and in
some opinions the term 'estoppel by
judgment' has been used to describe the
rule precluding the litigation of particular
issues in a subsequent action on a
different cause of action. Sometimes, the
term "estoppel by record" is so used. The
more recent tendency is to describe the
latter aspect of the doctrine of res
judicata as a "collateral estoppel" or a
"collateral estoppel by judgment", as
distinguished from the "direct estoppel
by judgment" where the earlier and later
causes of action are Identical.
c) When VELASCO instituted the
NUISANCE CASE, he conceded,
which he is now estopped to deny,
that MERALCO had the right to
establish the sub-station within the
PROPERTY without violation of the
restriction to "residential purposes".
What he subsequently alleged, after
the sub-station had become
operative, was that the sub-station,
because of the generated noise, had
become a nuisance which should be
abated. Although the propriety of
the establishment of the sub-station
was not a controverted matter in
the NUISANCE CASE, it was a tacit
admission on the part of VELASCO,
which can form part of an estoppel
within the NUISANCE CASE. It would
not be good law to allow him now to
take the position, even if he had the
right of action, that the construction
of the sub-station violated the
restriction provided for by PHHC. If
the present standpoint of VELASCO
should be upheld, then the
procedurally wrong result would be
that, after this Court had decided
that the sub-station can remain
within the PROPERTY with reduction
of the noise, the Appellate Tribunal,
a subordinate tribunal, can
subsequently nullify the decision of
this Court and order the removal of
the sub-station from the PROPERTY.
AVISADO V. RUMBAUA
Ponente: PARDO
Doctrine: In order for res judicata to apply,
the following elements must be present:
(a) the former judgment must be final; (b) the
court which rendered judgment had jurisdiction
over the parties and the subject matter; (c) it
must be a judgment on the merits; (d) and
there must be between the first and second
actions identity of parties, subject matter, and
cause of action.
Quick Facts: Avisados and Rumbauas had a
land dispute prompting the Rumbauas to file a
complaint in CFI Rizal (1st Case) but later
entered into a compromise agreement with the
Avisados. However, Rumbauas alleged that
Avisados breached the agreement and the
former filed an action for recovery in RTC QC
(2nd Case). RTC dismissed for being barred by
prior judgement. CA reversed RTC stating that
the 2nd case had a diff cause of action.
Nature: Petition for Certiorari under Rule 45,
1997 Rules of Civil Procedure (CA reversing RTC)
Plaintiffs: VIRGINIA AVISADO AND JOCELYN
AVISADO GARGARITA (HUSB and WIFE)
Respondents: AMOR RUMBAUA, VICTORIA C.
RUMBAUA (HUSB and WIFE residents of
Jacksonville, Florida, USA) and CA
Amor, Victoria, Rafael and Aurora owned a
parcel of land adjacent to Abelardo and
Petitioner Virginia Avisado's (hereafter the
Avisados) land. Amor, Victoria, Rafael and
Aurora discovered that the Avisados were
occupying both parcels of land and had built a
bungalow made of strong materials.
Respondents demanded that the Avisados
vacate the lots, to no avail. (hereafter the
Avisados). Victoria executed a special power
of attorney authorizing Rafael ask, demand,
sue for, recover, extrajudicially and/or judicially,
that certain real property owned by her with full
power and authority to enter into any
compromise agreement with anybody under
any terms and conditions.
Civil Case No. Q-26392 - In CFI Rizal, Amor
and Victoria, represented by Rafael (and in his
own capacity as co-plaintiff) and Aurora filed a
complaint for recovery of possession of realty
with damages against the Avisados. They involved reciprocal obligations of the parties
prayed that the Avisados be ordered to vacate (i.e., the vendees to pay the purchase price and
the lots, to surrender possession to respondents for the vendors to execute the absolute deed of
and to pay damages. sale). Avisados filed a motion for execution of
the April 15, 1980 decision which the TC
granted. RTC later issued the "writ of execution"
addressed to the ex-officio sheriff of Manila.
Rafael (in his own capacity), Amor and Victoria
(through Rafael), and Aurora entered into a
compromise agreement with the Avisados,
stating: Civil Case No. Q-93-18138 - 13 years later,
Amor and Victoria (through their new attorney-
in-fact, Noemi Candido Natividad) filed with RTC,
Branch 77, Quezon City a complaint for
1) the Avisados (vendees) shall pay Amor and
recovery of real property with damages
Victoria (vendors) the amount of seventy
against the Avisados. The complaint alleged
thousand pesos (P70,000.00), after which Amor
that the compromise agreement resulting in
and Victoria shall execute an absolute deed of
the sale of Victoria and Amors lot to the
sale in favor of the Avisados. The total
Avisados was invalid as the special power of
purchase price shall be paid in installments. The
attorney executed by Victoria in Rafaels favor
1st payment of P5K to be paid on Ap 14, 80 and
never authorized him to sell the lot in question.
the 2nd payment of the balance of P65K to be
paid on or before Sept 30 80; 2) within a month
from the registration of the absolute deed of
sale, the Avisados shall remove any portion of Thus, TC's approval of the compromise
their residential house located within the agreement has since become a stale judgment
boundaries of the lot belonging to Rafael and that can no longer be enforced, either by
Aurora; 3) all expenses for the registration of motion or action. Amor and Victoria then
the lot shall be borne by the Avisados; 4) should prayed that the Avisados peacefully vacate the
the Avisados violate the compromise lots in question, surrender possession to them
agreement they shall P5K in favor of the and pay damages. During trial, Abelardo
vendors and shall vacate the lot within 30 days Avisado died.
from the time of default. In such event, the
agreement to sell shall be ipso facto cancelled;
5) the compromise agreement shall have the
RTC QC - dismissed Rumbaua's complaint for
effect of a mutual quit-claim of all claims for
being barred by prior judgment. Amor and
damages and reimbursement set up in the
Victoria appealed to CA. Also, upon motion of
complaint and the answer that the parties may
Virginia, CA issued a resolution allowing the
have against each other. The compromise
deceased, Abelardo to be substituted by his heir
agreement was submitted to the RTC for
Jocelyn Avisado Gargarita.
approval.

CA - Reversed RTC QC. The causes of action in

RTC approved in toto the compromise
Civil Case No. Q-26392 and Civil Case No. Q-93-
agreement and stated that it is not contrary to
18138 were different. The former case is an
law, good morals, public policy. However, Amor
accion publiciana for the recovery of possession
and Victoria (through Rafael), Rafael (in his own
of realty and damages, while the latter case is
capacity) and Aurora filed with a
based on the violation of the compromise
manifestation stating that the compromise
agreement. Res judicata does not apply. MFR
agreement was violated by the Avisados
denied.
refusal to pay the P65k. TC noted the
manifestation. Aurora, Rafael, in his own
capacity and on behalf of his co-plaintiffs, Amor
and Victoria filed a motion for execution of Issue: WON CA erred when it did not consider
judgment, praying that a writ of execution be Civil Case No. Q-26392 as a bar to Civil Case
issued ordering them to vacate the lots. TC No. Q-93-18138 on the ground of res judicata.
denied the motion for execution of judgment
reasoning that the compromise agreement

Held: SC held that RTC QC is correct. Petition
granted. RTC revived and affirmed in toto. When
Amor and Victoria filed Civil Case No. Q-93-
18138, and argued that Rafael did not have the
authority to enter into the compromise
agreement, they collaterally attacked the
judgment in Civil Case No. Q-26392 which
approved the compromise agreement. This
cannot be done.
Ratio:
Finality of Judgment - The judgment in the
first case has become final and executory. What
Amor and Victoria should have done was to
either timely appeal the decision to CA under R
41, 1997 Rules of Civpro, or to seasonably file a
petition for relief from judgment under Rule
38.
Bustos v. CA - once a decision becomes final
and executory, it is the ministerial duty of the
court to order its execution. Execution can be
suspended when suspension is warranted by
the higher interest of justice and when certain
facts and circumstances transpired after the
finality of the judgment which would render the
execution of judgment unjust. Neither
circumstance obtains in the present case.
Res Judicata - CA still must still be reversed
even if the issue is just limited to res judicata.
Res judicata requisite elements: (a) the former
judgment must be final; (b) the court which
rendered judgment had jurisdiction over the
parties and the subject matter; (c) it must be a
judgment on the merits; (d) and there must be
between the first and second actions identity of
parties, subject matter, and cause of action.
First three elements of res judicata present. As
to the last issue, identity of causes of action,
SC disagrees with CA, the causes of action in
Civil Case No. Q-26392 and Civil Case No. Q-93-
18138 are one and the same.
Cause of action elements: (1) the legal right of
plaintiff; (2) the correlative obligation of the
defendant, and (3) the act or omission of the
defendant in violation of said legal right
In Civil Case No. Q-26392, the cause of action
was the illegal occupation of the lots by the
Avisados, to the prejudice of Amor, Victoria,
Rafael and Aurora. In Civil Case No. Q-93-18138.
Amor and Victoria likewise complained that the
Avisados occupied their lot, through strategy
and stealth, and without (their) knowledge and
consent.
Assuming the Causes of Action were
Different -
Even if we assume, that in Civil Case No. Q-93-
18138, the causes of action were: (1) the
invalidity of the compromise agreement; and (2)
the Avisados breach of the compromise
agreement, Still, these issues were settled and
passed upon in Civil Case No. Q-26392.
Validity of the compromise agreement - CFI
Rizal stated on April 15, 1980 that the
Compromise Agreement (is) not contrary to
law, good morals, public policy. By such action,
CFI made a finding of law and fact. If such was
in error, the proper recourse was appeal or a
petition for relief, and not a separate action.
Breach of the compromise agreement - CFI
ruled upon by the lower court when it declared
that the compromise agreement involved
reciprocal obligations of the parties. This factual
finding of the trial court is buttressed by its
order, granting the Avisados motion for
execution and its writ of execution, which
commanded the ex-officio sheriff of Manila to
order Amor and Victoria to execute the deed of
sale in favor of the Avisados upon their payment
of the P65k.
memo debet bis vexari et eadem causa -
Individuals should not be vexed twice for the
same cause.
Laches
Our ruling against Amor and Victoria is justified
all the more by the fact that they are filed Civil
Case No. Q-93-18138 assailing the compromise
agreement. Thirteen years have lapsed.
There is laches when there is failure or
neglect, for an unreasonable length of time to
do that which by exercising due diligence could
or should have been done earlier. When there is
laches, the presumption arises that the party
entitled to assert a right has either abandoned
it or has declined to assert it. Even a registered
owner may be barred from recovering
possession of land by virtue of laches.
Elements:
(1) conduct on the part of defendant, or one
under whom he claims, giving rise to the
situation that led to the complaint and for which
the complaint seeks a remedy;
(2) delay in asserting the complainants rights,
having had knowledge or notice of the
defendants conduct and having been afforded
an opportunity to institute a suit;
(3) lack of knowledge or notice on the part of
defendant that the complainant would assert
the right on which he bases his suit; and
(4) injury or prejudice to the defendant in the
event relief is accorded to the complainant, or
the suit is not held barred.
Arreza vs. Diaz, Jr, GR 133113, 30 August
2001 [interpleading parties may file counter-
claim, cross-claims or third party complaint for
complete adjudication of the case]
FACTS: Bliss Development Corporation is the
owner of a housing unit located at Lot 27. Block
30 New Capitol Estates I, Barangay Matandang
Balara, Quezon City. In the course of a case
involving a conflict of ownership between
petitioner Edgar H. Arreza and respondent
Montano M. Diaz. Bliss Development
Corporation filed a complaint for interpleader.
TC: herein interpleader is resolved in favor of
defendant Edgar H. Arreza, and plaintiff Bliss
Development is granted cognizance of the May
6, 1991 transfer of rights by Emiliano and
Leonila Melgazo thru Manuel Melgazo, to said
defendant Edgar Arreza. The case is dismissed
as against defendant Montano M. Diaz, Jr. The
third-party complaint is likewise dismissed.
The decision became final and was duly
executed with Bliss executing a Contract to Sell
the aforementioned property to petitioner
Arreza. Respondent Diaz was constrained to
deliver the property with all its improvements to
petitioner
Thereafter respondent Diaz filed a complaint
against Bliss Development Corporation, Edgar
H. Arreza, and Domingo Tapay in the Regional
Trial Court of Makati, Branch 59, docketed as
Civil Case No. 96-1372. He sought to hold Bliss
Development Corporation and petitioner Arreza
liable for reimbursement to him of
P1,706,915.58 representing the cost of his
acquisition and improvements on the subject
property with interest at 8% per annum
Petitioner Arreza filed a Motion to Dismiss the
case, citing as grounds res adjudicata or
conclusiveness of the judgment in the
interpleader case as well as lack of cause of
action. The petition was dismissed for lack of
merit. The Court of Appeals said:
The decision invoked by the petitioner as res
adjudicata resolved only the issue of who
between Edgar H. Arreza and Montano Diaz has
the better right over the property under
litigation. It did not resolve the rights and
obligations of the parties
The action filed by Montano M. Diaz against
Bliss Development Corporation, et al. seeks
principally the collection of damages in the form
of the payments Diaz made to the defendant
and the value of the improvements he
introduced on the property matters that were
not adjudicated upon in the previous case for
interpleader.
THE ISSUE FOR OUR RESOLUTION NOW IS
WHETHER RESPONDENT DIAZ'S CLAIMS
FOR REIMBURSEMENT AGAINST
PETITIONER ARREZA ARE BARRED BY RES
ADJUDICATA.
The elements of res adjudicata are: (a) that the
former judgment must be final; (b) the court
which rendered judgment had jurisdiction over
the parties and the subject matter; (c) it must
be a judgment on the merits; and (d) there
must be between the first and second causes of
action identity of the parties, subject matter,
and cause of action.8
Worthy of note, the prior case for interpleader
filed with Branch 146 of the Regional Trial Court
of Makati, Civil Case No. 94-2086, was settled
with finality with this Court's resolution in G.R.
No. 128726. 9 The judgment therein is now
final.
When the Regional Trial Court of Makati (Branch
146) rendered judgment, it had priorly acquired
jurisdiction over the parties and the subject
matter. Respondent, however, contends that the
trial court did not acquire jurisdiction over the
property subject of the action, as the action was
instituted in Makati City while the subject unit is
situated in Quezon City.
By asserting his right as a buyer for
value and in good faith of the subject
property, and asking for relief arising
therefrom, respondent invoked the
jurisdiction of the trial court. Having
invoked the jurisdiction of the Regional
Trial Court of Makati (Branch 146) by
filing his answer to secure affirmative
relief against petitioner, respondent is
now estopped from challenging the
jurisdiction of said court after it had
decided the case against him. Surely we
cannot condone here the undesirable
practice of a party submitting his case
for decision and then accepting the
judgment only if favorable, but attacking
it on grounds of jurisdiction when
adverse
Respondent also claims that there is no identity
of causes of action between Civil Case No. 94-
2086, the prior case, and Civil Case No. 96-
1372, the present case subject of this petition,
as the former involved a complaint for
interpleader while the latter now involves an
action for a sum of money and damages. He
avers that a complaint for interpleader is
nothing more than the determination of rights
over the subject matter involved.
As stated by the Court of Appeals, the court in a
complaint for interpleader shall determine the
rights and obligations of the parties and
adjudicate their respective claims. Such rights,
obligations, and claims could only be
adjudicated if put forward by the aggrieved
party in assertion of his rights. That party in this
case referred to respondent Diaz. The second
paragraph of Section 5 of Rule 62 of the 1997
Rules of Civil Procedure provides that the
parties in an interpleader action may file
counterclaims, cross-claims, third party
complaints and responsive pleadings thereto,
"as provided by these Rules." The second
paragraph was added to Section 5 to expressly
authorize the additional pleadings and claims
enumerated therein, in the interest of a
complete adjudication of the controversy and
its incidents.15
Pursuant to said Rules, respondent should have
filed his claims against petitioner Arreza in the
interpleader action. Having asserted his rights
as a buyer in good faith in his answer, and
praying relief therefor, respondent Diaz should
have crystallized his demand into specific
claims for reimbursement by petitioner Arreza.
This he failed to do.
Having failed to set up his claim for
reimbursement, said claim of respondent Diaz
being in the nature of a compulsory
counterclaim is now barred The defendant
having failed to set up such alternative
defenses and chosen or elected to rely on one
only, the overruling thereof was a complete
determination of the controversy between the
parties which bars a subsequent action based
upon an unpleaded defense, or any other cause
of action, except that of failure of the complaint
to state a cause of action and of lack of
jurisdiction of the Court. The determination of
the issue joined by the parties constitutes res
judicata. Although the alternative defense of
being builders in good faith is only permissive,
the counterclaim for reimbursement of the
value of the improvements is in the nature of a
compulsory counterclaim. Thus, the failure by
the private respondents to set it up bars their
right to raise it in a subsequent litigation (Rule
9, Section 4 of the Rules of Court).
In cases involving res adjudicata, the parties
and the causes of action are identical or
substantially the same in the prior as well as
the subsequent action. The judgment in the first
action is conclusive as to every matter offered
and received therein and as to any other matter
admissible therein and which might have been
offered for that purpose, hence said judgment is
an absolute bar to a subsequent action for the
same cause. The bar extends to questions
necessarily involved in an issue, and necessarily
adjudicated, or necessarily implied in the final
judgment, although no specific finding may
have been made in reference thereto, and
although such matters were directly referred to
in the pleadings and were not actually or
formally presented. Said prior judgment is
conclusive in a subsequent suit between the
same parties on the same subject matter, and
on the same cause of action, not only as to
matters which were decided in the first action,
but also as to every other matter which the
parties could have properly set up in the prior
suit
In the present case, we find there is an identity
of causes of action between Civil Case No. 94-
2086 and Civil Case No. 96-1372. Respondent
Diazs cause of action in the prior case, now the
crux of his present complaint against petitioner,
was in the nature of an unpleaded compulsory
counterclaim, which is now barred. There being
a former final judgment on the merits in the
prior case, rendered in Civil Case No. 94-2086
by Branch 146 of the Regional Trial Court of
Makati, which acquired jurisdiction over the
same parties, the same subject property, and
the same cause of action, the present complaint
of respondent herein (Diaz) against petitioner
Arreza docketed as Civil Case No. 96-1372
before the Regional Trial of Makati, Branch 59
should be dismissed on the ground of res
adjudicata.
FRANCISCO V. ROQUE
J. TINGA
FACTS:
1) The legal controversy was first sparked after
the death of Pastora Baetiong in 1975 by a
complaint for accion publiciana filed against
the heirs of Baetiong, including petitioner,
by respondents Roque Co and Mariano Co,
involving the above-mentioned parcel of
land, and another property, covered by TCT
No. 63531 issued by the Caloocan City
Register of Deeds (RTC QC)
2) The above case was settled by a CA the
parties acknowledged the heirs of Baetiong
as the owner of the subject properties.
Further, it was agreed upon that the heirs of
Baetiong would lease to respondents a
portion of the properties, totaling between
25,000 square meters to 30,000 square
meters, covering land then already occupied
by respondents. The lease agreement, which
was contained in a Contract of Lease, was to
subsist for 15 years commencing
retroactively from 1 October 1983.
3) Five (5) years after the execution of the
Compromise Agreement and Contract of
Lease, the heirs of Baetiong filed a Motion
with the Quezon City, RTC, Branch 101,
wherein they alleged that respondents were
actually occupying a larger portion of their
land than the 30,000 square meter limit
agreed upon in the Compromise Agreement.
They prayed that a commission be
constituted for the proper enforcement of
the Compromise Agreement GRANTED
CHALLENGED BY R THRU A PETITION FOR
CERTIORARI CA REVERSED TC DECISION
a) Court of Appeals made several other
conclusions which are worthy of note. It
ruled that since the Contract of Lease
specified that the leased portion had an
area of "approximately" three (3)
hectares (or 30,000 sq.m.), the area
occupied by respondents was the same
property agreed upon for lease by the
parties in the Compromise Agreement.
On the claim that the area leased was
actually in excess of 7,659 sq. meters,
the Court of Appeals held that the heirs
of Baetiong were precluded by laches
and negligence from asserting such
claim, as they had remained silent for
almost five years in contesting the
subject area.
4) Four (4) years later, or on 24 July 1995,
petitioner filed a complaint for forcible entry
against respondents before the Metropolitan
Trial Court (MeTC) of Quezon City, docketed
as Civil Case No. 13158. This is the instant
case and the third of the cases earlier
adverted to. Petitioner alleged therein that
she was the owner in fee simple of a parcel
of land, denominated as Lot No. 2-F-4, with
an area of 5,679 square meters,
encompassed under TCT No. 44546, which
she inherited from her mother per a 1978
Extra-Judicial Settlement of Estate which
caused the subdivision of the property into
several lots maintained that on 19 July
1995, respondents, through agents, entered
Lot No. 2-F-4 and started fencing the said
property
5) In their answer, respondents alleged that
the property over which petitioner was
asserting her rights was covered under the
Contract of Lease which had been executed
pursuant to the earlier Compromise
Agreement. Respondents also cast doubt on
the validity of the 1978 Extra-Judicial
Settlement of Estate P was also barred by
res judicata
6) MeTC and RTC both ruled in favour of P res
judicata did not apply, owing to the absence
of the requisite of identity of causes of
action. Both courts noted that the instant
action concerned a complaint for forcible
entry, while the earlier case pertained to the
execution of a contract of lease REVERSED
BY CA the complaint for forcible entry was
indeed barred by res judicata. It was held
that while there was a difference in the
forms of the two actions, there was
nonetheless a similarity of causes of action
in the two cases, as the same evidence
would support and establish both the former
and present causes of action. It was
observed that the evidence to be presented
by the contending parties in both actions
was that which would support their
allegation of having a better right to the
possession of the subject property.
WON THE PRESENT CASE IS BARRED BY
RES JUDICATA?
1) There are two aspects to the doctrine of res
judicata
 a) The first, known as "bar by prior
judgment," 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.
b) The second, known as "conclusiveness
of judgment," issues actually and directly
resolved in a former suit cannot again be
raised in any future case between the
same parties involving a different cause
of action
2) The Court considers the second facet of res
judicata, "conclusiveness of judgment" as
controlling in this case.
3) Conclusiveness of judgment operates as a
bar even if there is no identity as between
the first and second causes of judgment.
Under the doctrine, any right, fact, or matter
in issue directly adjudicated or necessarily
involved in the determination of an action
before a competent court in which judgment
is rendered on the merits is conclusively
settled by the judgment therein and cannot
again be litigated between the parties and
their privies whether or not the claim,
demand, purpose, or subject matter of the
two actions is the same
4) Evidently, "conclusiveness of judgment"
may operate to bar the second case even if
there is no identity of causes of action. The
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
5) In that regard, we now consider the effect of
the declarations on several questions of fact
and law earlier made by the Court of
Appeals in its Decision in CA-G.R. SP No.
18032, a judgment that has since lapsed
into finality
6) The Compromise Agreement speaks for
itself. The delineation of the subject
property was immediately to be
conducted by both parties for proper
inclusion in the Contract of Lease.
Thus, when the Contract of Lease was
executed, the Compromise Agreement
have (sic) already been fully
implemented and duly enforced. Hence,
the constitution of a commission for the
purpose of delineating the bounds of the
property will serve no other purpose
7) As regards the contention of the
private respondent that the inclusion
of the land in the Contract of Lease is
in excess of what was really agreed
upon deserves no scant consideration
8) It is very clear that the area now
occupied by the lessees- petitioners is
the property that was actually agreed
upon by the lessees-petitioners and
private respondents-lessors as
stipulated in said Contract of Lease.
9) Granting that the area leased is really
in excess of 7,659.84 sq. meters as
claimed by respondents, the same is
already precluded from asserting such
contention. Records of the case show
that respondents-lessors by their
silence and inaction for almost five
years in contesting the area subject of
the lease constitutes laches that places
them in estoppel to assert their alleged
right under the compromise agreement
10) It should be understood that these
pronouncements contained in the earlier
Court of Appeals decision have the force of
law between the parties. Since this decision
establishes the right of respondents to
occupy by way of lease a portion of TCT No.
44546 which may even exceed three (3)
hectares, it thus becomes imperative for
petitioner to establish her cause of action
which is that respondent had beyond that
which they were entitled to occupy
according to the decision of the Court of
Appeals. Following the Court of Appeals
decision, respondents would be entitled to
remain in possession of the portion which
they were actually occupying at the time of
the execution of the Contract of Lease even
if such portion exceeded three (3) hectares
11) Evidently, the MeTC considered Lot
No. 2-F-4 as beyond the scope of the
lease agreement because the leased
area, as shown by the subdivision plan,
covered only three (3) particular lots,
namely Lots No. 2-E, 2-F-1, and 2-F-2,
with these three lots covering a total
area of 3.1 hectares. But that was
contrary to the decision of the Court of
Appeals. Hence, in order that the trial
court could rule in favor of petitioner
without unsettling the earlier final and
executory decision of the Court of
Appeals, it should have been able to
establish that Lot No. 2-F-4 was outside
the coverage of the Contract of Lease
as construed by the appellate court.
CRUZ V. CA
J. CHICO-NAZARIO
FACTS:
1) There are four (4) cases involved in this
controversy.
a) The first case that was filed between the
parties is Civil Case No. 4365 for
Unlawful Detainer litigated before the
Municipal Trial Court of Gapan, Nueva
Ecija entitled Josefina M. Cruz and
Ernestina M. Concepcion, plaintiffs, vs.
Mariano `Boy Bunag, Rolando Bunag,
Remedios Bunag, et al., Defendants. This
case was decided on 6 November 1998
by the Municipal Trial Court in favor of
herein petitioner Josefina M. Cruz and
Ernestina M. Concepcion
b) The second case is Civil Case No. 1600
for Quieting of Title, filed before the
Regional Trial Court of Gapan, Nueva
Ecija, Branch 36 with Carlos L. Bunag,
 Elias Bunag Natividad, Mariano Bunag,
Salud Bunag Clanaoc and Juliana Bunag
Arevalo, as Plaintiffs and Josefina M.
Cruz and Ernestina M. Concepcion as
Heirs of Sps. Carlos Maniquis and Marina
Bunag, as Defendants. This case was
dismissed for failure to prosecute as
evidenced by the Regional Trial Court
Order dated 10 March 2000
c) The third case is Civil Case No. 2573-02
for Injunction, with Mariano `Boy Bunag
and Rolando Bunag as Petitioners
against Carlos Bunag, Elias Bunag
Natividad, Mariano Bunag, Salud Bunag
Clanaoc and Juliana Bunag Arevalo as
Defendants. This case, which was filed
before the Regional Trial Court of Gapan
City, Branch 35, was dismissed on
ground of res judicata. The 6 November
2002 Order, in effect, ruled that there is
a substantial identity of parties in this
case and in Civil Case No. 1600, a
Petition for Quieting of Title
d) The fourth case is the instant
controversy for Annulment of Title
With Damages. Docketed as Civil
Case No. 2583-02, it was lodged by
herein private respondents Mariano
Bo[y] Bunag and Rolando Bunag
against herein petitioners Josefina
M. Cruz and Ernestina M.
Concepcion before the sala of
Branch 35, Regional Trial Court of
Gapan City.
2) It appears that herein petitioners interposed
a Motion for Outright Dismissal of Civil
Case No. 2583 which was granted by the
Court a quo
3) However, when herein private respondents
interposed their Motion for Reconsideration,
the court a quo reversed itself and
reinstated the present case
4) Via petition for review, petitioners went to
the Court of Appeals. The latter dismissed
the petition for lack of merit. It ruled that
one of the elements of res judicata, i.e., that
there must be, between the first and the
second actions, identity of parties, of subject
matter and of cause of action, is lacking
MR DENIED
DOES RES JUDICATA APPLY IN THE CASE AT
BAR?
1) YES.
2) Under the rule of res judicata, also known as
bar by prior judgment, a final judgment or
order on the merits, rendered by a Court
having jurisdiction of the subject matter and
of the parties, is conclusive in a subsequent
case between the same parties and their
successor-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. The requisites essential for the
application of the principle are: (1) there
must be a final judgment or order; (2) said
judgment or order must be on the merits;
(3) the Court rendering the same must have
jurisdiction on the subject matter and the
parties; and (4) there must be between the
two cases identity of parties, identity of
subject matter, and identity of causes of
action
3) FOCUS OF CONTENTION: PRESENCE OF THE
SECOND AND FOURTH ELEMENTS
a) RE: #2: It is clear from the afore-
mentioned order that said case was
dismissed, upon petitioners motion, for
failure of private respondents and their
counsel to attend several scheduled
hearings for the presentation of their
evidence. Since the order did not contain
a qualification whether same is with or
without prejudice, following Section 3, it
is deemed to be with prejudice and shall
have the effect of an adjudication on the
merits. A ruling based on a motion to
dismiss, without any trial on the merits
or formal presentation of evidence, can
still be a judgment on the merits.
i) SEC. 3, RULE 17
ii) The rule enumerates the instances
where the complaint may be
dismissed due to plaintiff's fault: (1)
if he fails to appear on the date for
the presentation of his evidence in
chief; (2) if he fails to prosecute his
action for an unreasonable length of
time; or (3) if he fails to comply with
the rules or any order of the court.
Once a case is dismissed for failure
to prosecute, this has the effect of an
adjudication on the merits and is
understood to be with prejudice to
the filing of another action unless
otherwise provided in the order of
dismissal. In other words, unless
there be a qualification in the order
of dismissal that it is without
prejudice, the dismissal should be
regarded as an adjudication on the
merits and is with prejudice
b) RE: #4: The principle of res judicata
may not be evaded by the mere
expedient of including an additional
party to the first and second action.
Only substantial identity is necessary to
warrant the application of res judicata.
The addition or elimination of some
parties does not alter the situation.
There is substantial identity of parties
when there is a community of interest
between a party in the first case and a
party in the second case albeit the latter
was not impleaded in the first case
i) In the case at bar, it is apparent that
from the face of the complaint for
Quieting of Title, private respondent
Rolando Bunag was not a party
therein as his name does not appear
in the title. This, notwithstanding, his
 claim and that of the plaintiffs
therein, which included private
respondent Mariano Bunag, are the
same to be declared the true owners
of the parcel of land covered by
Original Certificate of Title (OCT) No.
22262 and Transfer Certificate of Title
(TCT) No. 67161 of the Registry of
Deeds of Nueva Ecija. Private
respondent Rolando Bunag and the
plaintiffs are all heirs of the alleged
owners of the parcel of land covered
by OCT No. 22262. Private
respondent Rolando Bunag, though
not a party therein, shared an
identity of interest from which flowed
an identity of relief sought, namely,
to declare them the true owners of
the parcel of land covered by OCT
No. 22262 and TCT No. 67161. Such
identity of interest is sufficient to
make them privy-in-law, thereby
satisfying the requisite of substantial
identity of parties.
ii) As regards the identity of subject
matter, we find that there is. In both
Civil Case No. 1600 (for Quieting of
Title) and Civil Case No. 2583 (for
Annulment of Title), what is involved
is one and the same parcel of land
covered by TCT No. 67161
iii) THERE IS ALSO IDENTITY OF COA:
The test to determine whether the
causes of action are identical is to
ascertain whether the same evidence
will sustain both actions, or whether
there is an identity in the facts
essential to the maintenance of the
two actions. If the same facts or
evidence would sustain both, the two
actions are considered the same, and
a judgment in the first case is a bar
to the subsequent action
iv) Civil Case No. 1600 was for Quieting
of Title, while Civil Case No. 2583 is
for Annulment of Title with Damages.
The two cases are different only in
the form of action but an
examination of the allegations in the
second case would reveal that the
issue raised ownership of the land --
and the relief sought be declared as
owner and TCTs be issued in their
names -- are substantially the same.
The evidence required to
substantiate their claims are likewise
the same. The proceedings in the
instant case, if permitted to continue,
would entail the presentation of
evidence which should have been
adduced in the case for Quieting of
Title. The case for Annulment of Title
is simply a second cycle of review
involving a subject matter that has
already been decided with finality in
the Quieting of Title case.
c) A case for Quieting of Title had been filed
for the purpose of determining the
ownership of the subject land, but same
was dismissed because the plaintiffs
therein failed to attend the scheduled
hearings for the presentation of their
evidence. As above discussed, the
dismissal was an adjudication on the
merits. They had all the opportunity to
present all the evidence for their cause
but they failed to do so. It is undeniable
that there was no denial of due process
in this case.
d) The doctrine of res judicata is a rule
which pervades every well-regulated
system of jurisprudence and is founded
upon two grounds embodied in various
maxims of the common law, namely: (1)
public policy and necessity, which makes
it to the interest of the State that there
should be an end to litigation -
republicae ut sit litium, and (2) the
hardship on the individual that he should
be vexed twice for the same cause -
nemo debet bis vexari et eadem causa.
A contrary doctrine would subject the
public peace and quiet to the will and
neglect of individuals and prefer the
gratification of the litigious disposition on
the part of suitors to the preservation of
the public tranquility and happiness
PASCUAL V. CA
FACTS:
Petitioner Consolacion Sioson (CONSOLACION)
and respondent Remedios S. Eugenio-Gino
(REMEDIOS) are the niece and granddaughter,
respectively, of the late Canuto Sioson
(CANUTO).
CANUTO and 11 other individuals, including his
sister Catalina Sioson (CATALINA) and his
brother Victoriano Sioson (VICTORIANO), were
co-owners of a parcel of land in Tanza, Navotas,
Metro Manila.
CANUTO and CONSOLACION executed a
Kasulatan ng Bilihang Tuluyan (KASULATAN).
Under the KASULATAN, CANUTO sold his 10/70
share in Lot 2 in favor of CONSOLACION for
P2,250.00.
CONSOLACION immediately took possession of
Lot Nos. 2-A and 2-E.
On 23 October 1968, the surviving children of
CANUTO, namely, Felicidad and Beatriz,
executed a joint affidavit (JOINT AFFIDAVIT)
affirming the KASULATAN in favor of
CONSOLACION
On 4 February 1988, REMEDIOS filed a
complaint against CONSOLACION. REMEDIOS
claimed that she is the owner of Lot Nos. 2-A
and 2-E because CATALINA devised these lots to
her in CATALINAs last will and testament (LAST
WILL) dated 29 May 1964.
REMEDIOS added that CONSOLACION obtained
title to these lots through fraudulent means
since the area covered by TCT (232252) 1321 is
twice the size of CANUTOs share in Lot 2.
The trial court held that the action filed by
REMEDIOS is based on fraud, covered by the
four-year prescriptive period. The trial court
further ruled that REMEDIOS has no right of
action against petitioners because CATALINAs
LAST WILL from which REMEDIOS claims to
derive her title has not been admitted to
probate. Under Article 838 of the Civil Code, no
will passes real or personal property unless it is
allowed in probate in accordance with the Rules
of Court.
CA reversed. Thus, this petition.
REMEDIOS filed was a suit to enforce an implied
trust allegedly created in her favor when
CONSOLACION fraudulently registered her title
over Lot Nos. 2-A and 2-E. Consequently, the
prescriptive period for filing the complaint is ten
years, not four
ISSUES:
whether prescription bars the action filed by
REMEDIOS, and (BARRED, after 19years)
whether REMEDIOS is a real party-in-interest.
(NOT A REAL PARTY)
HELD: Petition with merit, complaint dismissed.
RATIO:
BARRED BY PRESCRIPTION
REMEDIOS action is based on an implied trust
under Article 1456 since she claims that the
inclusion of the additional 1,335 square meters
in TCT No. (232252) 1321 was without basis. In
effect, REMEDIOS asserts that CONSOLACION
acquired the additional 1,335 square meters
through mistake or fraud and thus
CONSOLACION should be considered a trustee
of an implied trust for the benefit of the rightful
owner of the property. Clearly, the applicable
prescriptive period is ten years under Article
1144 and not four years under Articles 1389
and 1391.
It is now well-settled that the prescriptive period
to recover property obtained by fraud or
mistake, giving rise to an implied trust under
Article 1456 of the Civil Code, is ten years
pursuant to Article 1144
This ten-year prescriptive period begins to run
from the date the adverse party repudiates the
implied trust, which repudiation takes place
when the adverse party registers the land
REMEDIOS filed her complaint on 4 February
1988 or more than 19 years after
CONSOLACION registered her title over Lot Nos.
2-A and 2-E on 28 October 1968.
Unquestionably, REMEDIOS filed the complaint
late thus warranting its dismissal
REMEDIOS thus had actual notice of petitioners
adverse title on 8 November 1977. Even if, for
the sake of argument, the ten-year prescriptive
period begins to run upon actual notice of the
adverse title, still REMEDIOS right to file this
suit has prescribed. REMEDIOS had until 11
November 1987 within which to file her
complaint. When she did so on 4 February 1988,
the prescriptive period had already lapsed.
RESPONDENT IS NOT A REAL PARTY-IN-
INTEREST (WILL NOT YET PROBATED)
Not only does prescription bar REMEDIOS
complaint. REMEDIOS is also not a real party-in-
interest who can file the complaint, as the trial
court correctly ruled.
REMEDIOS anchored her claim over Lot Nos. 2-A
and 2-E (or over its one-half portion) on the
devise of these lots to her under CATALINAs
LAST WILL. However, the trial court found that
the probate court did not issue any order
admitting the LAST WILL to probate. REMEDIOS
does not contest this finding. Indeed, during the
trial, REMEDIOS admitted that Special
Proceedings Case No. C-208 is still pending
Article 838 of the Civil Code states that [N]o
will shall pass either real or personal property
unless it is proved and allowed in accordance
with the Rules of Court. This Court has
interpreted this provision to mean, until
admitted to probate, [a will] has no effect
whatever and no right can be claimed
thereunder.
REMEDIOS anchors her right in filing this suit on
her being a devisee of CATALINAs LAST WILL.
However, since the probate court has not
admitted CATALINAs LAST WILL, REMEDIOS has
not acquired any right under the LAST WILL.
REMEDIOS is thus without any cause of action
either to seek reconveyance of Lot Nos. 2-A and
2-E or to enforce an implied trust over these lots
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