G.R. No.
109125 December 2, 1994 property, plaintiffs were compelled to file the complaint to compel defendants
ANG YU ASUNCION, ARTHUR GO AND KEH TIONG, petitioners,
vs.
THE HON. COURT OF APPEALS and BUEN REALTY DEVELOPMENT
CORPORATION, respondents.
Antonio M. Albano for petitioners.
Umali, Soriano & Associates for private respondent.
VITUG, J.:
Assailed, in this petition for review, is the decision of the Court of Appeals, dated 04
December 1991, in CA-G.R. SP No. 26345 setting aside and declaring without force and
effect the orders of execution of the trial court, dated 30 August 1991 and 27 September
1991, in Civil Case No. 87-41058.
The antecedents are recited in good detail by the appellate court thusly:
On July 29, 1987 a Second Amended Complaint for Specific Performance
was filed by Ang Yu Asuncion and Keh Tiong, et al., against Bobby Cu
Unjieng, Rose Cu Unjieng and Jose Tan before the Regional Trial Court,
Branch 31, Manila in Civil Case No. 87-41058, alleging, among others, that
plaintiffs are tenants or lessees of residential and commercial spaces owned
by defendants described as Nos. 630-638 Ongpin Street, Binondo, Manila;
that they have occupied said spaces since 1935 and have been religiously
paying the rental and complying with all the conditions of the lease contract;
that on several occasions before October 9, 1986, defendants informed
plaintiffs that they are offering to sell the premises and are giving them priority
to acquire the same; that during the negotiations, Bobby Cu Unjieng offered a
price of P6-million while plaintiffs made a counter offer of P5-million; that
plaintiffs thereafter asked the defendants to put their offer in writing to which
request defendants acceded; that in reply to defendant's letter, plaintiffs wrote
them on October 24, 1986 asking that they specify the terms and conditions
of the offer to sell; that when plaintiffs did not receive any reply, they sent
another letter dated January 28, 1987 with the same request; that since
defendants failed to specify the terms and conditions of the offer to sell and
because of information received that defendants were about to sell the
to sell the property to them.
Defendants filed their answer denying the material allegations of the
complaint and interposing a special defense of lack of cause of action.
After the issues were joined, defendants filed a motion for summary judgment
which was granted by the lower court. The trial court found that defendants'
offer to sell was never accepted by the plaintiffs for the reason that the parties
did not agree upon the terms and conditions of the proposed sale, hence,
there was no contract of sale at all. Nonetheless, the lower court ruled that
should the defendants subsequently offer their property for sale at a price of
P11-million or below, plaintiffs will have the right of first refusal. Thus the
dispositive portion of the decision states:
WHEREFORE, judgment is hereby rendered in favor of the
defendants and against the plaintiffs summarily dismissing the
complaint subject to the aforementioned condition that if the
defendants subsequently decide to offer their property for sale
for a purchase price of Eleven Million Pesos or lower, then the
plaintiffs has the option to purchase the property or of first
refusal, otherwise, defendants need not offer the property to
the plaintiffs if the purchase price is higher than Eleven Million
Pesos.
SO ORDERED.
Aggrieved by the decision, plaintiffs appealed to this Court in
CA-G.R. CV No. 21123. In a decision promulgated on September 21, 1990
(penned by Justice Segundino G. Chua and concurred in by Justices Vicente
V. Mendoza and Fernando A. Santiago), this Court affirmed with modification
the lower court's judgment, holding:
In resume, there was no meeting of the minds between the
parties concerning the sale of the property. Absent such
requirement, the claim for specific performance will not lie.
Appellants' demand for actual, moral and exemplary damages
will likewise fail as there exists no justifiable ground for its
award. Summary judgment for defendants was properly
granted. Courts may render summary judgment when there is
no genuine issue as to any material fact and the moving party
is entitled to a judgment as a matter of law (Garcia vs. Court of
 Appeals, 176 SCRA 815). All requisites obtaining, the decision
of the court a quo is legally justifiable.
WHEREFORE, finding the appeal unmeritorious, the judgment
appealed from is hereby AFFIRMED, but subject to the
following modification: The court a quo in the aforestated
decision gave the plaintiffs-appellants the right of first refusal
only if the property is sold for a purchase price of Eleven
Million pesos or lower; however, considering the mercurial and
uncertain forces in our market economy today. We find no
reason not to grant the same right of first refusal to herein
appellants in the event that the subject property is sold for a
price in excess of Eleven Million pesos. No pronouncement as
to costs.
SO ORDERED.
The decision of this Court was brought to the Supreme Court by petition for
review on certiorari. The Supreme Court denied the appeal on May 6, 1991
"for insufficiency in form and substances" (Annex H, Petition).
On November 15, 1990, while CA-G.R. CV No. 21123 was pending
consideration by this Court, the Cu Unjieng spouses executed a Deed of Sale
(Annex D, Petition) transferring the property in question to herein petitioner
Buen Realty and Development Corporation, subject to the following terms
and conditions:
1. That for and in consideration of the sum of FIFTEEN
MILLION PESOS (P15,000,000.00), receipt of which in full is
hereby acknowledged, the VENDORS hereby sells, transfers
and conveys for and in favor of the VENDEE, his heirs,
executors, administrators or assigns, the above-described
property with all the improvements found therein including all
the rights and interest in the said property free from all liens
and encumbrances of whatever nature, except the pending
ejectment proceeding;
2. That the VENDEE shall pay the Documentary Stamp Tax,
registration fees for the transfer of title in his favor and other
expenses incidental to the sale of above-described property
including capital gains tax and accrued real estate taxes.
As a consequence of the sale, TCT No. 105254/T-881 in the name of the Cu
Unjieng spouses was cancelled and, in lieu thereof, TCT No. 195816 was
issued in the name of petitioner on December 3, 1990.
On July 1, 1991, petitioner as the new owner of the subject property wrote a
letter to the lessees demanding that the latter vacate the premises.
On July 16, 1991, the lessees wrote a reply to petitioner stating that petitioner
brought the property subject to the notice of lis pendens regarding Civil Case
No. 87-41058 annotated on TCT No. 105254/T-881 in the name of the Cu
Unjiengs.
The lessees filed a Motion for Execution dated August 27, 1991 of the
Decision in Civil Case No. 87-41058 as modified by the Court of Appeals in
CA-G.R. CV No. 21123.
On August 30, 1991, respondent Judge issued an order (Annex A, Petition)
quoted as follows:
Presented before the Court is a Motion for Execution filed by
plaintiff represented by Atty. Antonio Albano. Both defendants
Bobby Cu Unjieng and Rose Cu Unjieng represented by Atty.
Vicente Sison and Atty. Anacleto Magno respectively were
duly notified in today's consideration of the motion as
evidenced by the rubber stamp and signatures upon the copy
of the Motion for Execution.
The gist of the motion is that the Decision of the Court dated
September 21, 1990 as modified by the Court of Appeals in its
decision in CA G.R. CV-21123, and elevated to the Supreme
Court upon the petition for review and that the same was
denied by the highest tribunal in its resolution dated May 6,
1991 in G.R. No.
L-97276, had now become final and executory. As a
consequence, there was an Entry of Judgment by the
Supreme Court as of June 6, 1991, stating that the aforesaid
modified decision had already become final and executory.
It is the observation of the Court that this property in dispute
was the subject of the Notice of Lis Pendens and that the
modified decision of this Court promulgated by the Court of
 Appeals which had become final to the effect that should the
defendants decide to offer the property for sale for a price of
P11 Million or lower, and considering the mercurial and
uncertain forces in our market economy today, the same right
of first refusal to herein plaintiffs/appellants in the event that
the subject property is sold for a price in excess of Eleven
Million pesos or more.
WHEREFORE, defendants are hereby ordered to execute the
necessary Deed of Sale of the property in litigation in favor of
plaintiffs Ang Yu Asuncion, Keh Tiong and Arthur Go for the
consideration of P15 Million pesos in recognition of plaintiffs'
right of first refusal and that a new Transfer Certificate of Title
be issued in favor of the buyer.
All previous transactions involving the same property
notwithstanding the issuance of another title to Buen Realty
Corporation, is hereby set aside as having been executed in
bad faith.
SO ORDERED.
On September 22, 1991 respondent Judge issued another order, the
dispositive portion of which reads:
WHEREFORE, let there be Writ of Execution issue in the
above-entitled case directing the Deputy Sheriff Ramon
Enriquez of this Court to implement said Writ of Execution
ordering the defendants among others to comply with the
aforesaid Order of this Court within a period of one (1) week
from receipt of this Order and for defendants to execute the
necessary Deed of Sale of the property in litigation in favor of
the plaintiffs Ang Yu Asuncion, Keh Tiong and Arthur Go for
the consideration of P15,000,000.00 and ordering the Register
of Deeds of the City of Manila, to cancel and set aside the title
already issued in favor of Buen Realty Corporation which was
previously executed between the latter and defendants and to
register the new title in favor of the aforesaid plaintiffs Ang Yu
Asuncion, Keh Tiong and Arthur Go.
SO ORDERED.
On the same day, September 27, 1991 the corresponding writ of execution
(Annex C, Petition) was issued.1
On 04 December 1991, the appellate court, on appeal to it by private respondent, set aside
and declared without force and effect the above questioned orders of the court a quo.
In this petition for review on certiorari, petitioners contend that Buen Realty can be held
bound by the writ of execution by virtue of the notice of lis pendens, carried over on TCT No.
195816 issued in the name of Buen Realty, at the time of the latter's purchase of the
property on 15 November 1991 from the Cu Unjiengs.
We affirm the decision of the appellate court.
A not too recent development in real estate transactions is the adoption of such
arrangements as the right of first refusal, a purchase option and a contract to sell. For ready
reference, we might point out some fundamental precepts that may find some relevance to
this discussion.
An obligation is a juridical necessity to give, to do or not to do (Art. 1156, Civil Code). The
obligation is constituted upon the concurrence of the essential elements thereof, viz: (a)
The vinculum juris or juridical tie which is the efficient cause established by the various
sources of obligations (law, contracts, quasi-contracts, delicts and quasi-delicts); (b)
the object which is the prestation or conduct; required to be observed (to give, to do or not to
do); and (c) the subject-persons who, viewed from the demandability of the obligation, are
the active (obligee) and the passive (obligor) subjects.
Among the sources of an obligation is a contract (Art. 1157, Civil Code), which is a meeting
of minds between two persons whereby one binds himself, with respect to the other, to give
something or to render some service (Art. 1305, Civil Code). A contract undergoes various
stages that include its negotiation or preparation, its perfection and, finally, its
consummation. Negotiation covers the period from the time the prospective contracting
parties indicate interest in the contract to the time the contract is concluded (perfected).
The perfection of the contract takes place upon the concurrence of the essential elements
thereof. A contract which is consensual as to perfection is so established upon a mere
meeting of minds, i.e., the concurrence of offer and acceptance, on the object and on the
cause thereof. A contract which requires, in addition to the above, the delivery of the object
of the agreement, as in a pledge or commodatum, is commonly referred to as
a real contract. In a solemn contract, compliance with certain formalities prescribed by law,
such as in a donation of real property, is essential in order to make the act valid, the
prescribed form being thereby an essential element thereof. The stage
of consummation begins when the parties perform their respective undertakings under the
contract culminating in the extinguishment thereof.
Until the contract is perfected, it cannot, as an independent source of obligation, serve as a
binding juridical relation. In sales, particularly, to which the topic for discussion about the
case at bench belongs, the contract is perfected when a person, called the seller, obligates
himself, for a price certain, to deliver and to transfer ownership of a thing or right to another,
called the buyer, over which the latter agrees. Article 1458 of the Civil Code provides:
Art. 1458. By the contract of sale one of the contracting parties obligates
himself to transfer the ownership of and to deliver a determinate thing, and
the other to pay therefor a price certain in money or its equivalent.
A contract of sale may be absolute or conditional.
When the sale is not absolute but conditional, such as in a "Contract to Sell" where
invariably the ownership of the thing sold is retained until the fulfillment of a positive
suspensive condition (normally, the full payment of the purchase price), the breach of the
condition will prevent the obligation to convey title from acquiring an obligatory
force.2 In Dignos vs. Court of Appeals (158 SCRA 375), we have said that, although
denominated a "Deed of Conditional Sale," a sale is still absolute where the contract is
devoid of any proviso that title is reserved or the right to unilaterally rescind is stipulated,
e.g., until or unless the price is paid. Ownership will then be transferred to the buyer upon
actual or constructive delivery (e.g., by the execution of a public document) of the property
sold. Where the condition is imposed upon the perfection of the contract itself, the failure of
the condition would prevent such perfection.3 If the condition is imposed on the obligation of
a party which is not fulfilled, the other party may either waive the condition or refuse to
proceed with the sale (Art. 1545, Civil Code).4
An unconditional mutual promise to buy and sell, as long as the object is made determinate
and the price is fixed, can be obligatory on the parties, and compliance therewith may
accordingly be exacted.5
An accepted unilateral promise which specifies the thing to be sold and the price to
be paid, when coupled with a valuable consideration distinct and separate from the price, is
what may properly be termed a perfected contract of option. This contract is legally binding,
and in sales, it conforms with the second paragraph of Article 1479 of the Civil Code, viz:
Art. 1479. . . .
An accepted unilateral promise to buy or to sell a determinate thing for a price
certain is binding upon the promissor if the promise is supported by a
consideration distinct from the price. (1451a)6
Observe, however, that the option is not the contract of sale itself.7 The optionee has the
right, but not the obligation, to buy. Once the option is exercised timely, i.e., the offer is
accepted before a breach of the option, a bilateral promise to sell and to buy ensues and
both parties are then reciprocally bound to comply with their respective undertakings.8
Let us elucidate a little. A negotiation is formally initiated by an offer. An imperfect
promise (policitacion) is merely an offer. Public advertisements or solicitations and the like
are ordinarily construed as mere invitations to make offers or only as proposals. These
relations, until a contract is perfected, are not considered binding commitments. Thus, at any
time prior to the perfection of the contract, either negotiating party may stop the negotiation.
The offer, at this stage, may be withdrawn; the withdrawal is effective immediately after its
manifestation, such as by its mailing and not necessarily when the offeree learns of the
withdrawal (Laudico vs. Arias, 43 Phil. 270). Where a period is given to the offeree within
which to accept the offer, the following rules generally govern:
(1) If the period is not itself founded upon or supported by a consideration, the offeror is still
free and has the right to withdraw the offer before its acceptance, or, if an acceptance has
been made, before the offeror's coming to know of such fact, by communicating that
withdrawal to the offeree (see Art. 1324, Civil Code; see also Atkins, Kroll & Co. vs. Cua,
102 Phil. 948, holding that this rule is applicable to a unilateral promise to sell under Art.
1479, modifying the previous decision in South Western Sugar vs. Atlantic Gulf, 97 Phil.
249; see also Art. 1319, Civil Code; Rural Bank of Paraaque, Inc., vs. Remolado, 135
SCRA 409; Sanchez vs. Rigos, 45 SCRA 368). The right to withdraw, however, must not be
exercised whimsically or arbitrarily; otherwise, it could give rise to a damage claim under
Article 19 of the Civil Code which ordains that "every person must, in the exercise of his
rights and in the performance of his duties, act with justice, give everyone his due, and
observe honesty and good faith."
(2) If the period has a separate consideration, a contract of "option" is deemed perfected,
and it would be a breach of that contract to withdraw the offer during the agreed period. The
option, however, is an independent contract by itself, and it is to be distinguished from the
projected main agreement (subject matter of the option) which is obviously yet to be
concluded. If, in fact, the optioner-offeror withdraws the offer before its acceptance (exercise
of the option) by the optionee-offeree, the latter may not sue for specific performance on the
proposed contract ("object" of the option) since it has failed to reach its own stage of
perfection. The optioner-offeror, however, renders himself liable for damages for breach of
the option. In these cases, care should be taken of the real nature of
the consideration given, for if, in fact, it has been intended to be part of the consideration for
the main contract with a right of withdrawal on the part of the optionee, the main contract
could be deemed perfected; a similar instance would be an "earnest money" in a contract of
sale that can evidence its perfection (Art. 1482, Civil Code).
In the law on sales, the so-called "right of first refusal" is an innovative juridical relation.
Needless to point out, it cannot be deemed a perfected contract of sale under Article 1458 of
the Civil Code. Neither can the right of first refusal, understood in its normal concept, per
se be brought within the purview of an option under the second paragraph of Article 1479,
aforequoted, or possibly of an offer under Article 13199 of the same Code. An option or an
offer would require, among other things,10 a clear certainty on both the object and the cause
or consideration of the envisioned contract. In a right of first refusal, while the object might
be made determinate, the exercise of the right, however, would be dependent not only on
the grantor's eventual intention to enter into a binding juridical relation with another but also
on terms, including the price, that obviously are yet to be later firmed up. Prior thereto, it can
at best be so described as merely belonging to a class of preparatory juridical relations
governed not by contracts (since the essential elements to establish the vinculum juris would
still be indefinite and inconclusive) but by, among other laws of general application, the
pertinent scattered provisions of the Civil Code on human conduct.
Even on the premise that such right of first refusal has been decreed under a final judgment,
like here, its breach cannot justify correspondingly an issuance of a writ of execution under a
judgment that merely recognizes its existence, nor would it sanction an action for specific
performance without thereby negating the indispensable element of consensuality in the
perfection of contracts.11 It is not to say, however, that the right of first refusal would be
inconsequential for, such as already intimated above, an unjustified disregard thereof, given,
for instance, the circumstances expressed in Article 1912 of the Civil Code, can warrant a
recovery for damages.
The final judgment in Civil Case No. 87-41058, it must be stressed, has merely accorded a
"right of first refusal" in favor of petitioners. The consequence of such a declaration entails
no more than what has heretofore been said. In fine, if, as it is here so conveyed to us,
petitioners are aggrieved by the failure of private respondents to honor the right of first
refusal, the remedy is not a writ of execution on the judgment, since there is none to
execute, but an action for damages in a proper forum for the purpose.
We are also unable to agree with petitioners that the Court of Appeals has erred in holding
that the writ of execution varies the terms of the judgment in Civil Case No. 87-41058, later
affirmed in CA-G.R. CV-21123. The Court of Appeals, in this regard, has observed:
Finally, the questioned writ of execution is in variance with the decision of the
trial court as modified by this Court. As already stated, there was nothing in
said decision 13 that decreed the execution of a deed of sale between the Cu
Unjiengs and respondent lessees, or the fixing of the price of the sale, or the
cancellation of title in the name of petitioner (Limpin vs. IAC, 147 SCRA 516;
Pamantasan ng Lungsod ng Maynila vs. IAC, 143 SCRA 311; De Guzman
vs. CA, 137 SCRA 730; Pastor vs. CA, 122 SCRA 885).
It is likewise quite obvious to us that the decision in Civil Case No. 87-41058 could not have
decreed at the time the execution of any deed of sale between the Cu Unjiengs and
petitioners.
WHEREFORE, we UPHOLD the Court of Appeals in ultimately setting aside the questioned
Orders, dated 30 August 1991 and 27 September 1991, of the court a quo. Costs against
petitioners.
SO ORDERED.
Narvasa, C.J., Padilla, Bidin, Regalado, Davide, Jr., Romero, Bellosillo, Melo, Quiason,
Puno and Mendoza, JJ., concur.
Kapunan, J., took no part.
Feliciano, J., is on leave.

Furthermore, whether private respondent Buen Realty Development Corporation, the

alleged purchaser of the property, has acted in good faith or bad faith and whether or not it
should, in any case, be considered bound to respect the registration of the lis pendens in
Civil Case No. 87-41058 are matters that must be independently addressed in appropriate
proceedings. Buen Realty, not having been impleaded in Civil Case No. 87-41058, cannot
be held subject to the writ of execution issued by respondent Judge, let alone ousted from
the ownership and possession of the property, without first being duly afforded its day in
court.
G.R. No. 122202 May 26, 2005
HEIRS OF THE LATE FAUSTINA ADALID also known as CRISTINA ADALID namely
ELENA JAMITO, ELENO JAMITO, ANECITA JAMITO, PETRINIO JAMITO, LABORA
JAMITO, ELISA JAMITO, ESTELITA JAMITO, GLICERIA JAMITO, TERESITA LAS
PINAS, ALICIA JAMITO, ANA JAMITO, MARISSA JAMITO, CHERRYL JAMITO, and
DONNA JAMITO, petitioners,
vs.
THE COURT OF APPEALS, THE REGISTER OF DEEDS 0F BAIS CITY, and SPOUSES
HERMAN GREGORIO AND CORNELIA MONTESA GREGORIO, respondents.
DECISION
CHICO-NAZARIO, J.:
Before Us is a petition for review on certiorari which seeks to set aside the Decision1 and
Resolution2 of the Court of Appeals dated 28 April 1995 and 29 September 1995,
respectively. The said Decision and Resolution affirmed the Order of the Regional Trial
Court, Branch 45, Bais City dated 22 January 19923 dismissing the original complaint
docketed as Civil Case No. 136-B for Annulment of Titles and Damages filed by herein
petitioners against the respondents, on the ground of res judicata.
THE FACTS
A complaint for Annulment of Titles and Damages4 was filed before the Regional Trial Court,
Branch 45, Bais City, docketed as Civil Case No. 136-B, entitled "Heirs of the Late Faustina
Adalid also known as Cristina Adalid, namely: Elena Jamito, Eleno Jamito, Anecita Jamito,
Petrinio Jamito, Labora Jamito, Elisa Jamito, Estelita Jamito, Lucia Jamito, Responcito
Jamito, Gliceria Jamito, Teresita Las Pias and Constancia Las Pias, Plaintiffs, versus,
German Gregorio and Spouse Cornelia Montesa Gregorio, Atty. Jaime Muoz, in his
capacity as Register of Deeds of Bais City, Alicia Jamito, Ana Jamito, Marissa Jamito,
Cherryl Jamito and Donna Jamito, Defendants" dated 25 October 1990. Being unwilling co-
plaintiffs, Alicia, Ana, Marissa, Cherryl and Donna, all surnamed Jamito, were included as
party defendants.
As summed up by the Court of Appeals, the complaint alleged:
. . . [T]hat plaintiff-appellants and their ascendants and predecessors-in-interest had
been in continuous, uninterrupted, peaceful, exclusive and public possession and
occupation of Lot No. 211 situated along Burgos St., Bais City, in the concept of
owner, even prior to the year 1900, and that the property had passed on through
generations to herein plaintiff-appellants who are the surviving descendants or heirs
of Faustina, also known as Cristina Adalid. These heirs claimed that the property had
been declared for taxation purposes in the name of said Faustina beginning 1906,
then declared in the name of Juan Jamito and brothers, grandsons of Faustina, from
1925 up to the present. They further alleged that they had introduced improvements
thereon; that Lot No. 211 had been surveyed on November 15 and 16, 1916 for the
plaintiffs-appellants; that in Cadastral Case No. 7, LRC Cadastral Records No. 161,
Lot No. 211, Bais Cadastre, they were included in the list of claimants for said Lot
No. 211; that in said Cadastral Case No. 7, Cadastral Decree No. 260144 was
issued on June 6, 1927 in favor of the conjugal partnership of Gorgonio Montesa and
Manuela Teves of Bais City, despite the fact that they had never been the actual
occupants of Lot No. 211; that Decree No. 260144 was issued based on the
fraudulent declaration of ownership made by Maria Zerna and Gorgonio Montesa in
the answers they filed in Cadastral Case No. 7, LRC Cadastral Records No. 161;
that plaintiff-appellants discovered said fraudulent declarations only recently; that
pursuant to Decree No. 260144, Original Certificate of Title No. 5367 was issued on
July 29, 1927 in favor of Gorgonio Montesa and Manuela Teves; that Original
Certificate of Title No. 5367 had been cancelled and Transfer Certificate of Title No.
T-4344 had been issued to defendant-appellees Gregorio spouses, who allegedly
knew about the nullity and invalidity of the Original Certificate of Title No. 5367; that
defendant-appellees, as well as their predecessor-in-interest had never been in
possession of the land in question. . .5
The private respondent Gregorio spouses denied the material allegations of the complaint.
They alleged, among other things, that spouses Gorgonio Montesa and Manuela Teves, in
whose favor Decree No. 260144 had been issued, were the owners and actual occupants of
the subject property even before the issuance of said decree. They also averred that the fact
of possession and ownership of Lot No. 211 had long been settled in Civil Case No. 4049
per decision of the Court of First Instance, Branch 1, Negros Oriental, dated 22 February
1974, which was later affirmed by the Court of Appeals. By way of affirmative and special
defense, the Gregorio spouses maintained that the petitioners herein had no cause of action
against them. They appended in their Answer a Motion to Dismiss the complaint on the
ground of prescription, laches, operation of the Torrens system, and res judicata.
The respondent Register of Deeds of Bais City, in his Answer, likewise denied the
allegations in the complaint, and further asserted that the issuance of Cadastral Decree No.
260144 in favor of spouses Gorgonio Montesa and Manuela Teves and the corresponding
issuance of the certificate of title covering Lot No. 211 were done after due notice and
hearing by the cadastral court. As his affirmative and special defense, he contended that the
action was already barred by res judicata. He eventually adopted the motion to dismiss filed
by the Gregorio spouses.
The petitioners filed their reply and opposition to the motion to dismiss on 26 November
1990. They insisted that they never recognized the Gregorio spouses as the rightful owners
and possessors of the subject property, and the latter are not innocent purchasers for value.
The prior judgment in Civil Case No. 4049, according to them, was not a bar to the filing of
their complaint. They pointed out that the issue in Civil Case No. 4049 was the validity or
nullity of Cadastral Decree No. 260177 issued in Cadastral Case No. 7, Cadastral Record
No. 161 of the Bais Cadastre, while at issue in Civil Case 136-B is the validity or nullity of
Cadastral Decree No. 260144. They manifested that the subject matters of the two cases
are different, they having different cadastral decree numbers.
On 19 November 1990, the trial court ordered the transmission to it of the entire records of
Civil Case No. 4049 for the proper disposition of the motion to dismiss and the opposition
thereto. On 22 January 1992, the trial court, after due hearing, issued the assailed order, the
pertinent portions of which are quoted hereunder:
Clearly, Lot No. 211 of the Bais Cadastre originally titled under Cadastral Case No.
26(0)144 was the subject matter in Civil Case No. 4049, wherein the plaintiffs or their
successors-in-interest in the case at bar were the defendants in said case (Civil
Case No. 4049) Although the prefatory portion of the aforesaid decision cited
Cadastral Decree No. 260177, the said number should be considered a
typographical error, as the complaint in that case specifically mentioned of Cadastral
Decree No. 260144. Understandably, a similar error is contained in the latter portion
of the decision wherein it stated of another Decree No. 260977. However, except for
errors in the number of cadastral decree, the records are consistent in referring to
Lot No. 211 of the Bais Cadastre, and G.L.R.O. Cadastral Record No. 161.
The mis-stated Decree No. 260177 clearly covers Lot No. 303 of the Cadastral
survey of Bais, an entirely different land to Lot No. 211. (Exhibit '3')
...
Admittedly, the judgment in Civil Case No. 4049 has become final.
From the foregoing, it is clear that the requisites of res judicata to bar this case are
present. . .
Premises considered, finding the motion to dismiss by defendants being impressed
with merit, this case is hereby ordered dismissed.6
The petitioners moved for the reconsideration of the above-quoted order, which the trial
court denied.
The petitioners interposed an appeal7 with the Court of Appeals, docketed as CA-G.R. CV
Case No. 37369. They contended that the trial court had no authority or power in holding
that the mentioned Cadastral Decree No. 260177 in Civil Case No. 4049 should be
considered a typographical error; that the trial court gravely erred in holding that the
judgment in Civil Case No. 4049 is a bar to Civil Case No. 136-B which was an action to
declare Original Certificate of Title (OCT) No. 5367 and Transfer Certificate of Title (TCT)
No. T-4344 a nullity; and that the trial court gravely erred in dismissing the complaint.
On 28 April 1995, the Court of Appeals promulgated its Decision affirming in toto the Order
of the trial court. The Court of Appeals held in part:
The appellants erroneously assumed that the lower court amended or modified the
final judgment in Civil Case No. 4049. The lower court committed no such thing. It
merely made a finding that the mention of Cadastral Decree No. 260177 was a
typographical error in answer to appellants' contention that the subject matter of the
prior case, Civil Case No. 4049, and this present case, are not the same piece of
property. The lower court merely considered the decision in said prior case as
evidence that the subject matters in these two cases were identical, and did not
make any new pronouncements as regards the issues litigated in the earlier case.
...
The cadastral decree number is not the only basis for identifying the property being
contested in Civil Case No. 4049 Such detailed description of the land involved in
Civil Case No. 4049 shows that the property is the same one involved here in the
present case. Furthermore, appellants' own complaint shows that the property they
are contesting is that which is covered by Transfer Certificate of Title No. T-4344,
and the decision in Civil Case 4049 shows that the subject matter of that case is also
the lot covered by Transfer Certificate of Title No. T-4344. Most convincing is the fact
that the dispositive portion of the decision in Civil Case No. 4049 specifically
mentions Lot No. 211 and not Lot 303. All these circumstances point to the fact that
indeed, the subject matter of Civil Case No. 4049 and the present case, are one and
the same property.8
On the application of the principle of res judicata, the Court of Appeals held that the lower
court committed no error in finding that the requisites of res judicata exist in this case.
The petitioners moved for the reconsideration of the decision, which was however denied by
the Court of Appeals in its Resolution dated 29 September 1995.
Unfazed, the petitioners filed a petition for review on certiorari9 before this Court dated 20
November 1995. In the instant petition, Alicia, Ana, Marissa, Cherryl and Donna, all
surnamed Jamito, who were formerly impleaded party defendants as they were unwilling co-
plaintiffs, are now included as petitioners. Also, per Manifestation of the counsel for the
private respondents dated 25 March 199610, the Court was informed that private respondent
Herman Gregorio died on 07 February 1992, as evidenced by a certified true copy of the
Death Certificate.11 Private respondent Herman Gregorio was substituted by his heirs,
namely: his spouse Cornelia M. Gregorio, and surviving children Herman M. Gregorio, Jr.,
Gloria Fe G. Escao, Rizal M. Gregorio and Corman M. Gregorio.12
ASSIGNMENT OF ERRORS
The petitioners assign as errors the following:
I OF POVERTY.
THE FINDINGS AND CONCLUSION OF THE HONORABLE COURT OF APPEALS
THAT THE MENTION BY PRIVATE RESPONDENT OF CADASTRAL DECREE NO.
260177 IS MERELY A TYPOGRAPHICAL ERROR IS CONTRADICTED BY THE
EVIDENCE ON RECORD.
II
THE CONCLUSION OF THE COURT OF APPEALS THAT CADASTRAL DECREE
NO. 260177 IS MIS-STATED IS AN AMENDMENT OR MODIFICATION OF A FINAL
JUDGMENT WHICH IS PROHIBITED BY THE RULES.
III
THE DECISION IN CIVIL CASE NO. 4049 (CA 59842-R) DOES NOT CONSTITUTE
A BAR TO THE INSTITUTION OF C.C. NO. 136-B WHICH IS AN ACTION TO
ANNUL OCT [NO.] 5367 AND TCT NO. 4344.
IV
THE PRINCIPLE OF RES JUDICATA SHOULD BE DISREGARDED IF ITS
APPLICATION WOULD INVOLVE THE SACRIFICE OF JUSTICE TO
TECHNICALITY.
V On the first issue, the petitioners contend that the conclusion of the Court of Appeals in Civil
THE FACTS AND EVIDENCE SET FORTH BY APPELLANTS IN THEIR BRIEF
[WERE] NOT DISPUTED BY PRIVATE RESPONDENTS.
VI
THE ACTION FOR THE ANNULMENT OF OCT NO. 5367 AND TCT NO. 4344 IS
THE REMEDY PROVIDED FOR BY LAW FOR OWNERS WHOSE LAND WAS
ERRONEOUSLY TITLED BY ANOTHER.
VII
DEFENDANTS IN CIVIL CASE NO. 4049 WHO ARE PREDECESSORS-IN-
INTEREST OF HEREIN PETITIONER WERE DENIED THEIR CONSTITUTIONAL
RIGHTS TO DUE PROCESS AND FREE ACCESS TO THE COURTS BY REASON
VIII
PRIVATE RESPONDENTS WERE NEVER IN POSSESSION OF LOT 211.
IX
THE DOCUMENTARY EVIDENCE RELIED UPON BY PRIVATE RESPONDENTS
DO NOT SHOW THAT LOT 211 WAS SOLD BY CRISTINA ADALID, ORIGINAL
OWNER-CLAIMANT, TO THEIR PREDECESSOR-IN-INTEREST.13
ISSUES
From the foregoing assignment of errors, it is apparent that the issues for immediate
attention by this Court are: First, whether or not the trial court was correct in holding that the
mentioned Cadastral Decree No. 260177 in Civil Case No. 4049 was a typographical error,
and Second, whether or not the finality of the decision in Civil Case No. 4049 constitutes a
bar to the relitigation of the present case.
Resolution of these two threshold issues will render unnecessary the consideration of the
other errors assigned.
THE COURT'S RULINGS
Case No. 136-B that No. 260177 is misstated, is in effect, an amendment or modification of
the final judgment dated 22 February 1974 in Civil Case No. 4049 of the then Court of First
Instance, Branch 1, Negros Oriental. They further aver that the rule in this jurisdiction is that
once a decision becomes final and executory, no further amendment or correction can be
made by the court which rendered it, except to order the execution and to correct clerical
errors or mistakes.14
These contentions of the petitioners proceed from a false premise that the trial court, in Civil
Case No. 136-B, ordered the amendment or modification of the final judgment in Civil Case
No. 4049. Indeed, nothing of the sort was done by the trial court. It never issued any order
which tried to modify or amend the final decision in Civil Case No. 4049. What it did, after
reviewing all the records of Civil Case No. 4049, was just to make a finding that there was a
typographical error when Cadastral Decree No. 260177 was mentioned in the decision.
Thus:
After analyzing the allegations in their responsive pleadings, records in Civil Case
No. 4049, and the evidence presented by defendants on the hearing of the incident,
after due notice, with the plaintiffs having decided not to present evidence, the
following facts are established:
Lot No. 211 of the Bais Cadastre was subject to cadastral Case No. 260144 issued
in Cadastral Case No. 7, G.L.R.O. Cadastral Record No. 161 on June 6, 1927, and
consequently, Original Certificate of Title No. 5367 was issued on July 29, 1927. On
August 5, 1954, said lot was transferred to defendants Gregorio, and consequently,
Transfer Certificate of Title No. T-4344 was issued in their favor.
Clearly, Lot No. 211 of the Bais Cadastre originally titled under Cadastral Case No.
26[0]144 was the subject matter in Civil Case No. 4049, wherein the plaintiffs or their
successors-in-interest in the case at bar were the defendants in said case (Civil
Case No. 4049). The cause of action in that case is recovery of property with
damages, and the defunct Court of First Instance of Negros Oriental, rendered a
decision dated February 22, 1974 after trial on the merits in favor of the plaintiffs.
Although the prefatory portion of the aforesaid decision cited Cadastral Decree No.
260177, the said number should be considered a typographical error, as the
complaint in that case specifically mentioned of Cadastral Decree No. 260144.
Understandably, a similar error is contained in the latter portion of the decision
wherein it stated of another Decree No. 260977. However, except for errors in the
number of cadastral decree, the records are consistent in referring to Lot No. 211 of
the Bais Cadastre, and G.L.R.O. Cadastral Record No. 161.
The mis-stated Decree No. 260177 clearly covers Lot No. 303 of the Cadastral
survey of Bais, an entirely different land to Lot No. 211.15
The Court of Appeals viewed such findings in this wise:
. . . The lower court merely considered the decision in said prior case as evidence
that the subject matters in these two cases were identical, and did not make any new
pronouncements as regards the issues litigated in the earlier case.16
In any event, there are other ways to correctly identify the property, aside from the Cadastral
Decree number. As punctiliously pointed out by the Court of Appeals, and borne out by the
records, the property subject of the earlier case, Civil Case No. 4049, is covered by TCT No.
T-4344. The property subject of the present case is, by the petitioners' own complaint, that
covered by TCT No. T-4344.17 The description of the land subject of Civil Case No. 4049
refers to the same land involved in the present case. The dispositive portion of the decision
in Civil Case No. 4049 specifically mentions Lot No. 211. There can be, thus, no other
conclusion as to the identity of the subject matters involved.
Coming now to the second issue, whether or not the finality of the decision in Civil Case No.
4049 constitutes a bar to the relitigation of the present case, we rule in the affirmative. The
principle of res judicata is controlling.
The requisites of res judicata are: (1) there must be a former final judgment rendered on the
merits; (2) the court must have had jurisdiction over the subject matter and the parties; and
(3) there must be identity of parties, subject matter and cause of action between the first and
second actions.18
In the instant case, there is no uncertainty that Civil Case No. 4049 has attained finality. In
fact, this was admitted by the petitioners.19 The judgment in this case was rendered on the
merits after due hearing. The now defunct Court of First Instance, Negros Oriental, Twelfth
Judicial Region, Branch 1, which heard and rendered the decision in Civil Case No. 4049,
had jurisdiction over the subject matter and the parties.
The petitioners advance the theory that petitioner Francisca Jamito, a legal heir of Faustina
Adalid, and the respondent Register of Deeds of Bais City were not parties to the earlier
case, therefore, there was no identity of parties between the first case and the second case.
We do not agree. The principle of res judicata may not be evaded by the mere expedient of
including an additional party to the first and second action.20 Only substantial identity is
necessary to warrant the application of res judicata. The addition or elimination of some
parties does not alter the situation.21 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.22 As fittingly held by the Court of Appeals:
 The appellants' pleadings both here and in the lower court admit that they are the
descendants, and hence, the representatives of their predecessors-in-interest who
were the defendants in Civil Case No. 4049. As such, the decision in the earlier case
is binding on them and they are substantially the same persons who were parties in
the earlier case. The addition of the Register of Deeds as a party in this case is of no
moment as he is a mere nominal party.23
As we discussed earlier, there is likewise identity of subject matter between Civil Case No.
4049 and Civil Case No. 136-B. The complaints in both cases adverted to a real property
covered by TCT No. T-4344.
As a last ditch effort to defeat the application of the rule on res judicata, the petitioners
contend that the two cases have different causes of action. According to them, Civil Case
No. 4049 was an action for recovery of property with damages. It was grounded more on the
issue of possession and that the title to the property (i.e., TCT No. T-4344) was presented
only to prove their constructive possession. They further argue that Civil Case No. 136-B is
a direct attack on the validity of OCT No. 5367 and TCT No. T-4344, which could not have
been resolved in Civil Case No. 4049, pursuant to the rule that a Certificate of Title cannot
be subject to collateral attack and can be altered, modified or cancelled only in a direct
proceeding in accordance with law.
To determine the presence of identity of cause of action, the ultimate test is to consider
whether the same evidence would sustain the cause of action in both the first and the
second cases.24
Court of First Instance, Negros Oriental, Twelfth Judicial Region, Branch 1, in its decision in
the first case on 22 February 1974. As aptly observed by the Court of Appeals:
The appellants' allegations and annexes to their complaint show that the main fact
they were trying to establish is that they, instead of appellees, had been in
possession of the property in question. The decision in Civil Case No. 4049,
however, discloses that this issue had been thoroughly threshed out in that prior
case. . .26
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.27
WHEREFORE, in view of all the foregoing, the petition is DISMISSED. The Decision and
Resolution of the Court of Appeals dated 28 April 1995 and 29 September 1995,
respectively, are AFFIRMED. No pronouncement as to costs.
SO ORDERED.

A cause of action, broadly defined, is an act or omission of one party in violation of the legal
right of the other. Its elements are the following: (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. Causes of action are identical when there is an identity in the
facts essential to the maintenance of the two actions, or where the same evidence will
sustain both actions. If the same facts or evidence can sustain either, the two actions are
considered the same, so that the judgment in one is a bar to the other.25

Such is the situation here.

The first case was for Recovery of Property with Damages which was filed by the private
respondents herein against the petitioners. The second case is for Annulment of Titles and
Damages. The two cases are different only in the form of action but a close scrutiny of the
allegations in the second case would reveal, that they are exactly seeking the same reliefs
and that the issues they are presenting had been thoroughly ventilated in the first case. The
proceedings in the second case, if permitted to continue, would require the petitioners herein
to produce anew the evidence that had been thoroughly weighed and studied by the defunct
BACHRACH CORPORATION, petitioner, vs. THE HONORABLE TRIAL COURT CONSTITUTES INTERFERENCE WITH ITS
COURT OF APPEALS and PHILIPPINE PORTS JUDGMENT IN THE UNLAWFUL DETAINER CASE.
AUTHORITY, respondents.
V. THE COURT OF APPEALS GRAVELY ERRED IN ORDERING THE
DECISION DISMISSAL OF CIVIL CASE NO. 95-73399 THEREBY RULING ON THE
MERITS OF THE CASE WHEN IN FACT, THE ONLY ISSUES FOR ITS
VITUG, J.: RESOLUTION WERE THE PROPRIETY OF THE WRIT OF PRELIMINARY
INJUNCTION ISSUED BY THE TRIAL COURT AND THE DENIAL OF PPAS
Bachrach Corporation (Bachrach), in its petition for review MOTION FOR PRELIMINARY HEARING ON AFFIRMATIVE DEFENSES.[2]
on certiorari, questions the decision of the Court of Appeals in CA-G.R. SP No.
38763, promulgated on 12 November 1996, the dispositive part of which reading - It would appear that petitioner corporation entered into two lease contracts with
the Philippine government covering two specified areas, Block 180 and Block 185,
WHEREFORE, the petition is granted. The assailed RTC orders are hereby located at the Manila Port Area, then under the control and management of the
NULLIFIED and SET ASIDE and public respondent is ordered to dismiss the subject Director of Lands, for a term of ninety-nine years each, the first lease to expire on 19
action before him under Civil Case No. 95-73399. No pronouncement as to June 2017 and the other on 14 February 2018. During her tenure, President
costs.[1] on several counts; viz: Corazon Aquino issued Executive Order No. 321 transferring the management and
administration of the entire Port Area to herein respondent Philippine Ports Authority
I. THE COURT OF APPEALS GRAVELY ERRED IN NOT (PPA). Shortly after its take-over, PPA issued a Memorandum increasing the rental
DISMISSING CA-G.R. SP NO. 38673 DESPITE THE FACT THAT A rates of Bachrach by 1,500%. Bachrach refused to pay the substantial increased
SIMILAR PETITION EARLIER FILED BY PPA WAS DISMISSED rates demanded by PPA.
FOR BEING INSUFFICIENT NOT ONLY IN FORM BUT ALSO IN On 23 March 1992, PPA initiated unlawful detainer proceedings, docketed Civil
SUBSTANCE WHICH DISMISSAL CONSTITUTES RES Case No. 138838 of the Metropolitan Trial Court (MeTC) of Manila, against
JUDICATA INSOFAR AS THE ISSUES RAISED THEREIN ARE Bachrach for non-payment of rent. On 27 April 1993, MeTC rendered a decision
CONCERNED. ordering the eviction of Bachrach from the leased premises. Bachrach appealed to
the Regional Trial Court (RTC) of Manila which, on 21 September 1993, affirmed the
II. THE COURT OF APPEALS GRAVELY ERRED IN RULING THAT decision of the lower court in toto.[3]
THE DECISION IN THE UNLAWFUL DETAINER CASE Bachrach elevated the case to the Court of Appeals by way of a petition for
CONSTITUTES RES JUDICATA WHICH BARS THE SPECIFIC review. On 29 July 1994, the appellate court affirmed the decision of the RTC. A
PERFORMANCE CASE. motion for reconsideration was filed by Bachrach; however, the resolution of the
motion was put on hold pending submission of a compromise agreement.[4] When
III. THE COURT OF APPEALS GRAVELY ERRED IN RULING THAT the parties failed to submit the promised compromise agreement, the Court of
Appeals, on 15 May 1995, denied Bachrachs motion for reconsideration. The
THE FILING OF THE SPECIFIC PERFORMANCE CASE VIOLATES
decision of the appellate court in the ejectment suit became final and executory on
THE RULE AGAINST FORUM SHOPPING. 20 May 1995.[5]
IV. THE COURT OF APPEALS GRAVELY ERRED IN RULING THAT Meanwhile on 28 March 1995, while the motion for reconsideration was yet
THE WRIT OF PRELIMINARY INJUNCTION ISSUED BY THE pending with the appellate court, Bachrach filed a complaint against PPA with the
Manila RTC, docketed Civil Case No. 95-73399 (hereinafter referred to also as the
specific performance case), for refusing to honor a compromise agreement said to
have been perfected between Bachrach and PPA during their 04 February 1994
conference that superseded the ejectment case. In its complaint, Bachrach prayed
for specific performance.
On 08 June 1995, PPA filed a motion for a writ of execution/garnishment in the
ejectment case. The next day, 09 June 1995, Bachrach filed an application in the
specific performance case for the issuance of a temporary restraining order and/or a
writ of preliminary injunction to enjoin the MeTC from issuing the writ of
execution/garnishment. PPA countered by filing a motion for preliminary hearing on
its affirmative defenses along the same grounds mentioned in its motion to dismiss
the specific performance case, to wit: (a) the pendency of another action between
the same parties for the same cause; (b) the violation of the anti-forum-shopping
rule; (c) the complaints lack of cause of action; and (d) the unenforceable character
of the compromise agreement invoked by Bachrach. On 13 July 1995, the trial court
issued an omnibus order, granting the application of Bachrach for a writ of
preliminary injunction, in this tenor -
PREMISES CONSIDERED, this Court is of the opinion and so holds (1) that plaintiff
(Bachrach) is entitled to the injunctive relief prayed for and upon the posting of a
bond in the amount of P300,000.00, let a writ of preliminary injunction be issued
enjoining the defendant (PPA), the Presiding Judge of the Metropolitan Trial Court of
Manila, Branch 2 from issuing a writ of execution/garnishment in Civil Case No.
238838-CV entitled `Philippine Ports Authority vs. Bachrach Corporation; (2)
lifting/setting aside the order dated June 5, 1995 and (3) denying defendants motion
for a preliminary hearing on affirmative defenses.[6]
PPA moved for reconsideration of the above order but the trial court denied the plea
in its order of 29 August 1995.
On 25 September 1995, PPA filed a petition for certiorari and prohibition, with
application for the issuance of a temporary restraining order and/or writ of
preliminary injunction, docketed CA-G.R. SP No. 38508, before the Court of
Appeals. The petition was dismissed by resolution, dated 28 September 1995, of the
appellate court for being insufficient in form and substance, i.e., the failure of PPA to
properly attach a certified true copy each of the assailed order of 13 July 1995 and
29 August 1995 of the trial court. PPA received on 05 October 1995[7] a copy of the
resolution, dated 28 September 1995, of the appellate court. Undaunted, PPA filed a
new petition on 11 October 1995, now evidently in proper form, asseverating that
since it had received a copy of the assailed resolution of the trial court only on 07
September 1995, the refiling of the petition with the Court of Appeals within a period
of less than two months from the date of such receipt was well within the reasonable
time requirement under the Rules for a special civil action for certiorari.[8] In the
meantime, the resolution, dated 28 September 1995, of the Court of Appeals which
dismissed CA-G.R. No. 38508 became final on 21 October 1995.[9]
In its newly filed petition, docketed CA-G.R. SP No. 38673, PPA invoked the
following grounds for its allowance:
I. That respondent Judge acted without, or in excess of jurisdiction, or with
grave abuse of discretion when it issued a writ of preliminary injunction
against the final and executory resolution of the Honorable Court of
Appeals (Annex `I) inspite of the well-established rule that courts are not
allowed to interfere with each others judgment or decrees by injunction,
and worse, in this case, against the execution of the judgment of a superior
or collegiate court which had already become final and executory.
II. That respondent Judge acted without, or in excess of jurisdiction, or with
grave abuse of discretion when it also denied petitioners motion for a
preliminary hearing on its affirmative defenses or in failing to have the case
below outrightly dismissed on the grounds stated in its affirmative
defenses, when respondent Judge pronounced there is no identity as to
the causes of action between the case decided by the Court of Appeals
(CA-G.R. SP No. 32630) and the case below (Civil Case No. 95-73399)
when clearly the causes of action in both cases revolve on the same issue
of possession of the subject leased premises.
III. That respondent Judge acted without, or in excess of jurisdiction, or with grave
abuse of discretion in refusing to take cognizance (of), abide (by) and acknowledge
the final judgment of the Court of Appeals which, on said ground alone, is enough
justification for the dismissal of the case grounded on res judicata. Moreover private
respondent is guilty of forum-shopping and the penalty therefor is the dismissal of its
case.[10]
On 12 November 1996, the Court of Appeals rendered the assailed decision
nullifying and setting aside the orders of the RTC and ordering the latter to dismiss
the specific performance case.
 The Court finds merit in the instant appeal interposed by petitioner. interference with the judgment in the unlawful detainer suit. It could be argued that,
instead of filing a separate action for specific performance, Bachrach should just
Verily, the decisive issue raised by the parties before the Court in the instant
have presented the alleged compromise agreement in the unlawful detainer
petition is whether or not the specific performance case (Civil Case No. 73399)
case. Unfortunately, the refusal of PPA to honor the agreement after its alleged
should be held barred by the unlawful detainer case on the ground of res
perfection effectively prevented Bachrach from seeking the coercive power of the
judicata. There are four (4) essential conditions which must concur in order that res
court to enforce the compromise in the unlawful detainer case. The situation virtually
judicata may effectively apply, viz: (1) The judgment sought to bar the new action
left Bachrach with but the remedy of independently initiating the specific
must be final; (2) the decision must have been rendered by a court having
performance case in a court of competent jurisdiction. In its challenged decision, the
jurisdiction over the subject matter and the parties; (3) the disposition of the case
Court of Appeals, on its part, has said that respondent PPAs prayer for the issuance
must be a judgment or order on the merits; and (4) there must be between the first
of a writ of execution and garnishment is but the necessary and legal consequence
and second action identity of parties, identity of subject matter, and identity of
of its affirmance of the lower courts decision in the unlawful detainer case which has
causes of action.[11] There is no question about the fact that all the first three
by then become final and executory.[15] The rule indeed is, and has almost invariably
elements of res judicata are here extant; it is the final condition requiring an identity
been, that after a judgment has gained finality, it becomes the ministerial duty of the
of parties, of subject matter and of causes of action, particularly the last two, i.e.,
court to order its execution.[16] No court, perforce, should interfere by injunction or
subject matter and cause of action, that presents a problem.
otherwise to restrain such execution. The rule, however, concededly admits of
A cause of action, broadly defined, is an act or omission of one party in violation exceptions; hence, when facts and circumstances later transpire that would render
of the legal right of the other.[12] The subject matter, on the other hand, is the item execution inequitable or unjust, the interested party may ask a competent court to
with respect to which the controversy has arisen, or concerning which the wrong has stay its execution or prevent its enforcement.[17] So, also, a change in the situation of
been done, and it is ordinarily the right, the thing, or the contract under dispute.[13] In the parties can warrant an injunctive relief.[18] Evidently, in issuing its orders of 13
a breach of contract, the contract violated is the subject matter while the breach July 1995 and 29 August 1995 assailed by PPA in the latters petition
thereof by the obligor is the cause of action. It would appear quite plain then that the for certiorari and prohibition before the Court of Appeals, the trial court in the case at
RTC did act aptly in taking cognizance of the specific performance case. In Civil bar would want to preserve status quo pending its disposition of the specific
Case No. 138838 of the MeTC, the unlawful detainer case, the subject matter is the performance case and to prevent the case from being mooted by an early
contract of lease between the parties while the breach thereof, arising from implementation of the ejectment writ. In holding differently and ascribing to the trial
petitioners non-payment of rentals, constitutes the suits cause of action. In Civil court grave abuse of discretion amounting to lack or excess of jurisdiction, the
Case No. 73399 of the RTC, the specific performance case, the subject matter is the appellate court, in our considered view, has committed reversible error.
compromise agreement allegedly perfected between the same parties while the
Having reached the above conclusions, other incidental issues raised by
cause of action emanates from the averred refusal of PPA to comply therewith. The
petitioner no longer need to be passed upon.
ultimate test in ascertaining the identity of causes of action is said to be to look into
whether or not the same evidence fully supports and establishes both the present WHEREFORE, the petition is GRANTED. The decision of the Court of Appeals
cause of action and the former cause of action. In the affirmative, the former is reversed and set aside; Civil Case No. 73399 along with the assailed orders of the
judgment would be a bar; if otherwise, then that prior judgment would not serve as Regional Trial Court, aforedated, are hereby reinstated. No costs.
such a bar to the second.[14] The evidence needed to establish the cause of action in
SO ORDERED.
the unlawful detainer case would be the lease contract and the violation of that lease
by Bachrach. In the specific performance case, what would be consequential is
evidence of the alleged compromise agreement and its breach by PPA.
The next thing to ask, of course, would be the question of whether or not the
issuance by the trial court of the writ of preliminary injunction was an improper
G.R. No. L-4089 January 12, 1909
ARTURO PELAYO, plaintiff-appellant,
vs.
MARCELO LAURON, ET AL., defendants-appellees.
J.H. Junquera, for appellant.
Filemon Sotto, for appellee.
TORRES, J.:
On the 23rd of November, 1906, Arturo Pelayo, a physician residing in Cebu, filed a
complaint against Marcelo Lauron and Juana Abella setting forth that on or about the 13th of
October of said year, at night, the plaintiff was called to the house of the defendants,
situated in San Nicolas, and that upon arrival he was requested by them to render medical
assistance to their daughter-in-law who was about to give birth to a child; that therefore, and
after consultation with the attending physician, Dr. Escao, it was found necessary, on
account of the difficult birth, to remove the fetus by means of forceps which operation was
performed by the plaintiff, who also had to remove the afterbirth, in which services he was
occupied until the following morning, and that afterwards, on the same day, he visited the
patient several times; that the just and equitable value of the services rendered by him was
P500, which the defendants refuse to pay without alleging any good reason therefor; that for
said reason he prayed that the judgment be entered in his favor as against the defendants,
or any of them, for the sum of P500 and costs, together with any other relief that might be
deemed proper.
In answer to the complaint counsel for the defendants denied all of the allegation therein
contained and alleged as a special defense, that their daughter-in-law had died in
consequence of the said childbirth, and that when she was alive she lived with her husband
independently and in a separate house without any relation whatever with them, and that, if
on the day when she gave birth she was in the house of the defendants, her stay their was
accidental and due to fortuitous circumstances; therefore, he prayed that the defendants be
absolved of the complaint with costs against the plaintiff.
The plaintiff demurred to the above answer, and the court below sustained the demurrer,
directing the defendants, on the 23rd of January, 1907, to amend their answer. In
compliance with this order the defendants presented, on the same date, their amended
answer, denying each and every one of the allegations contained in the complaint, and
requesting that the same be dismissed with costs.
As a result of the evidence adduced by both parties, judgment was entered by the court
below on the 5th of April, 1907, whereby the defendants were absolved from the former
complaint, on account of the lack of sufficient evidence to establish a right of action against
the defendants, with costs against the plaintiff, who excepted to the said judgment and in
addition moved for a new trial on the ground that the judgment was contrary to law; the
motion was overruled and the plaintiff excepted and in due course presented the
corresponding bill of exceptions. The motion of the defendants requesting that the
declaration contained in the judgment that the defendants had demanded therefrom, for the
reason that, according to the evidence, no such request had been made, was also denied,
and to the decision the defendants excepted.
Assuming that it is a real fact of knowledge by the defendants that the plaintiff, by virtue of
having been sent for by the former, attended a physician and rendered professional services
to a daughter-in-law of the said defendants during a difficult and laborious childbirth, in order
to decide the claim of the said physician regarding the recovery of his fees, it becomes
necessary to decide who is bound to pay the bill, whether the father and mother-in-law of the
patient, or the husband of the latter.
According to article 1089 of the Civil Code, obligations are created by law, by contracts, by
quasi-contracts, and by illicit acts and omissions or by those in which any kind of fault or
negligence occurs.
Obligations arising from law are not presumed. Those expressly determined in the code or in
special laws, etc., are the only demandable ones. Obligations arising from contracts have
legal force between the contracting parties and must be fulfilled in accordance with their
stipulations. (Arts. 1090 and 1091.)
The rendering of medical assistance in case of illness is comprised among the mutual
obligations to which the spouses are bound by way of mutual support. (Arts. 142 and 143.)
If every obligation consists in giving, doing or not doing something (art. 1088), and spouses
are mutually bound to support each other, there can be no question but that, when either of
them by reason of illness should be in need of medical assistance, the other is under the
unavoidable obligation to furnish the necessary services of a physician in order that health
may be restored, and he or she may be freed from the sickness by which life is jeopardized;
the party bound to furnish such support is therefore liable for all expenses, including the fees
of the medical expert for his professional services. This liability originates from the above-
cited mutual obligation which the law has expressly established between the married couple.
In the face of the above legal precepts it is unquestionable that the person bound to pay the
fees due to the plaintiff for the professional services that he rendered to the daughter-in-law
of the defendants during her childbirth, is the husband of the patient and not her father and
mother- in-law, the defendants herein. The fact that it was not the husband who called the Mapa and Tracey, JJ., concur.
plaintiff and requested his assistance for his wife is no bar to the fulfillment of the said Arellano, C.J., and Carson, J., concurs in the result.
obligation, as the defendants, in view of the imminent danger, to which the life of the patient Willard, J., dissents.
was at that moment exposed, considered that medical assistance was urgently needed, and
the obligation of the husband to furnish his wife in the indispensable services of a physician
at such critical moments is specially established by the law, as has been seen, and
compliance therewith is unavoidable; therefore, the plaintiff, who believes that he is entitled
to recover his fees, must direct his action against the husband who is under obligation to
furnish medical assistance to his lawful wife in such an emergency.

From the foregoing it may readily be understood that it was improper to have brought an
action against the defendants simply because they were the parties who called the plaintiff
and requested him to assist the patient during her difficult confinement, and also, possibly,
because they were her father and mother-in-law and the sickness occurred in their house.
The defendants were not, nor are they now, under any obligation by virtue of any legal
provision, to pay the fees claimed, nor in consequence of any contract entered into between
them and the plaintiff from which such obligation might have arisen.

In applying the provisions of the Civil Code in an action for support, the supreme court of
Spain, while recognizing the validity and efficiency of a contract to furnish support wherein a
person bound himself to support another who was not his relative, established the rule that
the law does impose the obligation to pay for the support of a stranger, but as the liability
arose out of a contract, the stipulations of the agreement must be held. (Decision of May 11,
1897.)

Within the meaning of the law, the father and mother-in-law are strangers with respect to the
obligation that devolves upon the husband to provide support, among which is the furnishing
of medical assistance to his wife at the time of her confinement; and, on the other hand, it
does not appear that a contract existed between the defendants and the plaintiff physician,
for which reason it is obvious that the former can not be compelled to pay fees which they
are under no liability to pay because it does not appear that they consented to bind
themselves.

The foregoing suffices to demonstrate that the first and second errors assigned to the
judgment below are unfounded, because, if the plaintiff has no right of action against the
defendants, it is needless to declare whether or not the use of forceps is a surgical
operation.

Therefore, in view of the consideration hereinbefore set forth, it is our opinion that the
judgment appealed from should be affirmed with the costs against the appellant. So ordered.

G.R. No. L-7089 August 31, 1954
DOMINGO DE LA CRUZ, plaintiff-appellant,
vs.
NORTHERN THEATRICAL ENTERPRISES INC., ET AL., defendants-appellees.
Conrado Rubio for appellant.
Ruiz, Ruiz, Ruiz, Ruiz, and Benjamin Guerrero for appellees.
MONTEMAYOR, J.:
The facts in this case based on an agreed statement of facts are simple. In the year 1941
the Northern Theatrical Enterprises Inc., a domestic corporation operated a movie house in
Laoag, Ilocos Norte, and among the persons employed by it was the plaintiff DOMINGO DE
LA CRUZ, hired as a special guard whose duties were to guard the main entrance of the
cine, to maintain peace and order and to report the commission of disorders within the
premises. As such guard he carried a revolver. In the afternoon of July 4, 1941, one
Benjamin Martin wanted to crash the gate or entrance of the movie house. Infuriated by the
refusal of plaintiff De la Cruz to let him in without first providing himself with a ticket, Martin
attacked him with a bolo. De la Cruz defendant himself as best he could until he was
cornered, at which moment to save himself he shot the gate crasher, resulting in the latter's
death.
For the killing, De la Cruz was charged with homicide in Criminal Case No. 8449 of the
Court of First Instance of Ilocos Norte. After a re-investigation conducted by the Provincial
Fiscal the latter filed a motion to dismiss the complaint, which was granted by the court in
January 1943. On July 8, 1947, De la Cruz was again accused of the same crime of
homicide, in Criminal Case No. 431 of the same Court. After trial, he was finally acquitted of
the charge on January 31, 1948. In both criminal cases De la Cruz employed a lawyer to
defend him. He demanded from his former employer reimbursement of his expenses but
was refused, after which he filed the present action against the movie corporation and the
three members of its board of directors, to recover not only the amounts he had paid his
lawyers but also moral damages said to have been suffered, due to his worry, his neglect of
his interests and his family as well in the supervision of the cultivation of his land, a total of
P15,000. On the basis of the complaint and the answer filed by defendants wherein they
asked for the dismissal of the complaint, as well as the agreed statement of facts, the Court
of First Instance of Ilocos Norte after rejecting the theory of the plaintiff that he was an agent
of the defendants and that as such agent he was entitled to reimbursement of the expenses
incurred by him in connection with the agency (Arts. 1709-1729 of the old Civil Code), found
that plaintiff had no cause of action and dismissed the complaint without costs. De la Cruz
appealed directly to this Tribunal for the reason that only questions of law are involved in the
appeal.
We agree with the trial court that the relationship between the movie corporation and the
plaintiff was not that of principal and agent because the principle of representation was in no
way involved. Plaintiff was not employed to represent the defendant corporation in its
dealings with third parties. He was a mere employee hired to perform a certain specific duty
or task, that of acting as special guard and staying at the main entrance of the movie house
to stop gate crashers and to maintain peace and order within the premises. The question
posed by this appeal is whether an employee or servant who in line of duty and while in the
performance of the task assigned to him, performs an act which eventually results in his
incurring in expenses, caused not directly by his master or employer or his fellow servants or
by reason of his performance of his duty, but rather by a third party or stranger not in the
employ of his employer, may recover said damages against his employer.
The learned trial court in the last paragraph of its decision dismissing the complaint said that
"after studying many laws or provisions of law to find out what law is applicable to the facts
submitted and admitted by the parties, has found none and it has no other alternative than to
dismiss the complaint." The trial court is right. We confess that we are not aware of any law
or judicial authority that is directly applicable to the present case, and realizing the
importance and far-reaching effect of a ruling on the subject-matter we have searched,
though vainly, for judicial authorities and enlightenment. All the laws and principles of law we
have found, as regards master and servants, or employer and employee, refer to cases of
physical injuries, light or serious, resulting in loss of a member of the body or of any one of
the senses, or permanent physical disability or even death, suffered in line of duty and in the
course of the performance of the duties assigned to the servant or employee, and these
cases are mainly governed by the Employer's Liability Act and the Workmen's
Compensation Act. But a case involving damages caused to an employee by a stranger or
outsider while said employee was in the performance of his duties, presents a novel
question which under present legislation we are neither able nor prepared to decide in favor
of the employee.
In a case like the present or a similar case of say a driver employed by a transportation
company, who while in the course of employment runs over and inflicts physical injuries on
or causes the death of a pedestrian; and such driver is later charged criminally in court, one
can imagine that it would be to the interest of the employer to give legal help to and defend
its employee in order to show that the latter was not guilty of any crime either deliberately or
through negligence, because should the employee be finally held criminally liable and he is
found to be insolvent, the employer would be subsidiarily liable. That is why, we repeat, it is
to the interest of the employer to render legal assistance to its employee. But we are not
prepared to say and to hold that the giving of said legal assistance to its employees is a
legal obligation. While it might yet and possibly be regarded as a normal obligation, it does
not at present count with the sanction of man-made laws.

If the employer is not legally obliged to give, legal assistance to its employee and provide
him with a lawyer, naturally said employee may not recover the amount he may have paid a
lawyer hired by him.

Viewed from another angle it may be said that the damage suffered by the plaintiff by reason
of the expenses incurred by him in remunerating his lawyer, is not caused by his act of
shooting to death the gate crasher but rather by the filing of the charge of homicide which
made it necessary for him to defend himself with the aid of counsel. Had no criminal charge
been filed against him, there would have been no expenses incurred or damage suffered.
So the damage suffered by plaintiff was caused rather by the improper filing of the criminal
charge, possibly at the instance of the heirs of the deceased gate crasher and by the State
through the Fiscal. We say improper filing, judging by the results of the court proceedings,
namely, acquittal. In other words, the plaintiff was innocent and blameless. If despite his
innocence and despite the absence of any criminal responsibility on his part he was accused
of homicide, then the responsibility for the improper accusation may be laid at the door of
the heirs of the deceased and the State, and so theoretically, they are the parties that may
be held responsible civilly for damages and if this is so, we fail to see now this responsibility
can be transferred to the employer who in no way intervened, much less initiated the
criminal proceedings and whose only connection or relation to the whole affairs was that he
employed plaintiff to perform a special duty or task, which task or duty was performed
lawfully and without negligence.

Still another point of view is that the damages incurred here consisting of the payment of the
lawyer's fee did not flow directly from the performance of his duties but only indirectly
because there was an efficient, intervening cause, namely, the filing of the criminal charges.
In other words, the shooting to death of the deceased by the plaintiff was not the proximate
cause of the damages suffered but may be regarded as only a remote cause, because from
the shooting to the damages suffered there was not that natural and continuous sequence
required to fix civil responsibility.

In view of the foregoing, the judgment of the lower court is affirmed. No costs.

Bengzon, Padilla, Reyes, A., Bautista Angelo, Labrador, Concepcion, and Reyes, J.B.L.,
JJ., concu