Litis Pedentia - Res Judicata CivproCase

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 203754 June 16, 2015
FILM DEVELOPMENT COUNCIL OF THE PHILIPPINES, Petitioner,

vs.
COLON HERITAGE REALTY CORPORATION, operator of Oriente Group Theaters, represented
by ISIDORO A. CANIZARES, Respondent.
x-----------------------x

vs.
CITY OF CEBU and SM PRIME HOLDINGS, INC., Respondents.
DECISION
VELASCO, JR., J.:
The Constitution is the basic law to which all laws must conform; no act shall be valid if it conflicts
with the Constitution. In the discharge of their defined functions, the three departments of
government have no choice but to yield obedience to the commands of the Constitution. Whatever
limits it imposes must be observed. 1
The Case
Once again, We are called upon to resolve a clash between the Inherent taxing power of the
legislature and the constitutionally-delegated power to tax of local governments in these
consolidated Petitions for Review on Certiorari under Rule 45 of the Rules of Court seeking the
reversal of the Decision dated September 25, 2012 of the Regional Trial Court (RTC), Branch 5 in
Cebu City, in Civil Case No. CEB-35601, entitled Colon Heritage Realty Corp., represented by
Isidoro Canizares v. Film Development Council of the' Philippines, and Decision dated October 24,
2012 of the RTC, Branch 14 in Cebu City, in Civil Case No. CEB-35529, entitled City of Cebu v. Film
Development Council of the Philippines, collectively declaring Sections 13 and 14 of Republic Act
No. (RA) 9167 invalid and unconstitutional.
The Facts
The facts are simple and undisputed.
Sometime in 1993, respondent City of Cebu, in its exercise of its power to impose amusement taxes
under Section 140 of the Local Government Code (LGC) anchored on the constitutional policy on
2
local autonomy, passed City Ordinance No. LXIX otherwise known as the "Revised Omnibus Tax
3
Ordinance of the City of Cebu (tax ordinance)." Central to the case at bar are Sections 42 and 43,
Chapter XI thereof which require proprietors, lessees or operators of theatres, cinemas, concert
halls, circuses, boxing stadia, and other places of amusement, to pay an amusement tax equivalent
to thirty percent (30%) of the gross receipts of admission fees to the Office of the City Treasurer of
Cebu City. Said provisions read:
CHAPTER XI - Amusement Tax
Section 42. Rate of Tax. - There shall be paid to the Office of the City Treasurer by the proprietors,
lessees, or operators of theaters, cinemas, concert halls, circuses, boxing stadia and other places of
amusement, an amusement tax at the rate of thirty percent (30%) of the gross receipts from
admission fees. 4
Section 43. Manner of Payment. - In the case of theaters or cinemas, the tax shall first be deducted
and withheld by their proprietors, lessees, or operators and paid to the city treasurer before the
gross receipts are divided between said proprietor, lessees, operators, and the distributors of the
cinematographic films.
Almost a decade later, or on June 7, 2002, Congress passed RA 9167, creating the Film
5
Development Council qf the Philippines (FDCP) and abolishing the Film Development Foundation of
the Philippines, Inc. and the Film Rating Board. Secs. 13 and 14 of RA 9167 provided for the tax
treatment of certain graded films as follows:
Section 13. Privileges of Graded Films. - Films which have obtained an "A" or "B" grading from the
Council pursuant to Sections 11 and 12 of this Act shall be entitled to the following privileges:
a. Amusement tax reward. - A grade "A" or "B" film shall entitle its producer to an incentive equivalent
to the amusement tax imposed and collected on the graded films by cities and municipalities in
Metro Manila and other highly urbanized and independent component cities in the Philippines
pursuant to Sections 140 to 151 of Republic Act No. 7160 at the following rates:
1. For grade "A" films - 100% of the amusement tax collected on such film; and
2. For grade "B" films - 65% of the amusement tax collected on such films. The
remaining thirty-five (35%) shall accrue to the funds of the Council.
Section 14. Amusement Tax Deduction and Remittance. - All revenue from the amusement tax on
the graded film which may otherwise accrue to the cities and municipalities in Metropolitan Manila
and highly urbanized and independent component cities in the Philippines pursuant to Section 140 of
Republic Act. No. 7160 during the period the graded film is exhibited, shall be deducted and withheld
by the proprietors, operators or lessees of theaters or cinemas and remitted within thirty (30) days
from the termination of the exhibition to the Council which shall reward the corresponding
amusement tax to the producers of the graded film within fifteen (15) days from receipt thereof.
Proprietors, operators and lessees of theaters or cinemas who fail to remit the amusement tax
proceeds within the prescribed period shall be liable to a surcharge equivalent to five percent (5%) of
the amount due for each month of delinquency which shall be paid to the Council. (emphasis added)
According to petitioner, from the time RA 9167 took effect up to the present, all the cities and
municipalities in Metro Manila, as well as urbanized and independent component cities, with the sole
exception of Cebu City, have complied with the mandate of said law.
Accordingly, petitioner, through the Office of the Solicitor General, sent on January 2009 demand
letters for unpaid amusement tax reward (with 5% surcharge for each month of delinquency) due to
the producers of the Grade "A" or "B" films to the following cinema proprietors and operators in Cebu
City:
Amusement
Tax Reward Number
Cinema (with 5% of CEB
Period Covered
Proprietor/Operator surcharge for Graded
each moth of Films
delinquency)
SM Prime Holdings Inc. 76,836,807.08 89 Sept. 11, 2003 - Nov. 4, 2008
Ayala Center Cinemas 43,435,718.23 70 May 14, 2003 - Nov. 4, 2008
Colon Heritage Realty 8,071,267.00 50 Aug. 11, 2004-Nov. 4, 2008
Corp.
Eden Theater 428,938.25 4 May 5, 2005 - Sept. 2, 2008
Cinema Theater 3,100,354.80 22 Feb. 18, 2004-Oct. 7, 2008
Visaya Cineplex Corp. 17,582,521.89 86 June 25, 2005 - Oct. 21, 2008
Ultra Vistarama Cinema 68,821.60 2 July 2 - 22, 2008
Cebu Central Realty Corp. 9,853,559.69 48 Jan. 1, 2004 - Oct. 21, 2008
In said letters, the proprietors and cinema operators, including private respondent Colon Heritage
Realty Corp. (Colon Heritage), operator of the Oriente theater, were given ten (10) days from receipt
thereof to pay the aforestated amounts to FDCP. The demand, however, fell on deaf ears.
Meanwhile, on March 25, 2009, petitioner received a letter from Regal Entertainment, Inc., inquiring
on the status of its receivables for tax rebates in Cebu cinemas for all their A and B rate films along
with those which it co-produced with GMA films. This was followed by a letter from
Star Cinema ABS-CBN Film Productions, Inc., requesting the immediate remittance of its
amusement tax rewards for its graded films for the years 2004-2008.
Because of the persistent refusal of the proprietors and cinema operators to remit the said amounts
as FDCP demanded, on one hand, and Cebu City's assertion of a claim on the amounts in question,
the city finally filed on May 18, 2009 before the RTC, Branch 14 a petition for declaratory relief with
application for a writ of preliminary injunction, docketed as Civil Case No. CEB-35529 (City of Cebu
v. FDCP). In said petition, Cebu City sought the declaration of Secs. 13 and 14 of RA 9167 as invalid
and unconstitutional.
Similarly, Colon Heritage filed before the RTC, Branch 5 Civil Case No. CEB-35601 (Colon Heritage
v. FDCP), seeking to declare Sec. 14 of RA 9167 as unconstitutional.
On May 25, 2010, the RTC, Branch 14 issued a temporary restraining order (TRO) restraining and
enjoining FDCP, et al. from, inter alia:
(a) Collecting amusement tax incentive award in the City of Cebu and from imposing
surcharges thereon;
(b) Demanding from the owners, proprietors, and lessees of theaters and cinemas located
and operated within Cebu City, payment of said amusement tax incentive award which
should have been deducted, withheld, and remitted to FDCP, etc. by the owners, etc., or
being operated within Cebu City and imposing surcharges on the unpaid amount; and
(c) Filing any suit due to or arising from the failure of the owners, etc., of theaters or cinemas
within Cebu City, to deduct, withhold, and remit the incentive to FDCP.
Meanwhile, on August 13, 2010, SM Prime Holdings, Inc. moved for leave to file and admit attached
comment-in-intervention and was later granted. 6
Rulings of the Trial Courts
In City of Cebu v. FDCP, the RTC, Branch 14 issued the challenged Decision declaring Secs. 13
7
and 14 of RA 9167 unconstitutional, disposing as follows:
WHEREFORE, in view of all the disquisitions, judgment is rendered in favor of petitioner City of
Cebu against respondent Film Development Council of the Philippines, as follows:
1. Declaring Sections 13 and 14 of the (sic) Republic Act No. 9167 otherwise known as an
Act Creating the Film Development Council of the Philippines, Defining its Powers and
Functions, Appropriating Funds Therefor and for other purposes, as violative of Section 5
Article X of the 1997 (sic) Philippine Constitution; Consequently
2. Declaring that defendant Film Development Council of the Philippines (FDCP) cannot
collect under Sections 13 and 14 of R.A. 9167 as of the finality of the decision in G.R. Nos.
203754 and 204418;
3. Declaring that Intervenor SM Cinema Corporation has the obligation to remit the
amusement taxes, withheld on graded cinema films to respondent FDCP under Sections 13
and 14 of R.A. 9167 for taxes due prior to the finality of the decision in G.R. Nos. 203754
and 204418;
4. Declaring that after the finality of the decision in G.R. Nos. 203 754 and 204418, all
amusement taxes withheld and those which may be collected by Intervenor SM on graded
films shown in SM Cinemas in Cebu City shall be remitted to petitioner Cebu City pursuant to
City Ordinance LXIX, Chapter XI, Section 42.
As to the sum of PhP 76,836,807.08 remitted by the Intervenor SM to petitioner City of Cebu, said
amount shall be remitted by the City of Cebu to petitioner FDCP within thirty (30) days from finality of
this decision in G.R. Nos. 203754 and 204418 without interests and surcharges.
SO ORDERED.
According to the court, what RA 9167 seeks to accomplish is the segregation of the amusement
taxes raised and collected by Cebu City and its subsequent transfer to FDCP. The court concluded
that this arrangement cannot be classified as a tax exemption but is a confiscatory measure where
the national government extracts money from the local government's coffers and transfers it to
FDCP, a private agency, which in turn, will award the money to private persons, the film producers,
for having produced graded films.
The court further held that Secs. 13 and 14 of RA 9167 are contrary to the basic policy in local
autonomy that all taxes, fees, and charges imposed by the LGUs shall accrue exclusively to them,
as articulated in A1iicle X,. Sec. 5 of the 1987 Constitution. This edict, according to the court, is a
limitation upon the rule-making power of Congress when it provides guidelines and limitations on the
local government unit's (LGU's) power of taxation. Therefore, when Congress passed this
"limitation," if went beyond its legislative authority, rendering the questioned provisions
unconstitutional.
By the same token, in Colon Heritage v. FDCP, the RTC, Branch 5, in its Decision of September 25,
2012, also ruled against the constitutionality of said Secs. 13 and 14 of RA 9167 for the following
reasons: (a) while Congress, through the enactment of RA 9167, may have amended Secs.
140(a) and 151 of the LGC, in the exercise of its plenary power to amend laws, such power must be
8 9
exercised within constitutional parameters; (b) the assailed provision violates the constitutional
directive that taxes should accrue exclusively to the LGU concerned; (c) the Constitution, through its
Art. X, Sec. 5, directly conferred LGUs with authority to levy taxes-the power is no longer delegated
10
by the legislature; (d) In CIR v. SM Prime Holdings, the Court ruled that amusement tax on
11
cinema/theater operators or proprietors remain with the LGU, amusement tax, being, by nature, a
local tax. The fallo of the questioned judgment reads:
WHEREFORE, in view of all the foregoing, Judgment is hereby rendered in favor of petitioner, as
follows:
(1) Declaring Republic Act No. 9167 as invalid and unconstitutional;
(2) The obligation to remit amusement taxes for the graded films to respondent is ordered
extinguished;
(3) Directing respondent to refund all the amounts paid by petitioner, by way of amusement
tax, plus the legal rate of interest thereof, until the whole amount is paid in full.
Notify parties and counsels of this order.
SO ORDERED.
The Issue
Undeterred by two defeats, petitioner has come directly to this Court, presenting the singular issue:
whether or not the RTC (Branches 5 and 14) gravely erred in declaring Secs. 13 and 14 of RA 9167
invalid for being unconstitutional.
Anent Sec. 13, FDCP concedes that the amusement taxes assessed in RA 9167 are to be given to
12
the producers of graded films who are private persons. Nevertheless, according to FDCP, this
particular tax arrangement is not a violation of the rule on the use of public funds for RA 9167 was
enacted for a public purpose, that is, the promotion and support of the "development and growth of
the local film industry as a medium for the upliftment of aesthetic, cultural, and social values for the
better understanding and appreciation of the Filipino identity" as well as the "encouragement of the
production of quality films that will promote the growth and development' of the local film
industry." Moreover, FDCP suggests that "even if the resultant effect would be a certain loss of
13
revenue, [LGUs] do not feel deprived nor bitter for they realize that the benefits for the film industry,
the fortification of our values system, and the cultural boost for the nation as a whole, far outweigh
the pecuniary cost they would shoulder by backing this law." Finally, in support of its stance, FDCP
14
invites attention to the following words of former Associate Justice Isagani A. Cruz: "[t]he mere fact
that the tax will be directly enjoyed by a private individual does not make it invalid so long as some
link to the public welfare is established."
15
As regards Sec. 14 of RA 9167, FDCP is of the position that Sec. 5, Article X of the Constitution
16
does not change the doctrine that municipal corporations only possess delegated, not inherent,
powers of taxation and that the power to tax is still primarily vested in the Congress. Thus, wielding
its power to impose limitations on this delegated power, Congress further restricted the LGU's power
to impose amusement taxes via Secs. 13 and 14 of RA 9167-an express and real intention of
Congress to further contain the LGU's delegated taxing power. It, therefore, cannot be construed as
an undue limitation since it is well within the power of Congress to make such restriction.
Furthermore, the LGC is a mere statute which Congress can amend, which it in fact did when it
enacted RA 9164 and, later, the questioned law, RA 9167.
17 18
This, according to FDCP, evinces the overriding intent of Congress to remove from the LGU' s
delegated taxing power all revenues from amusement taxes on grade "A" or "B" films which would
otherwise accrue to the cities and municipalities in Metropolitan Manila and highly urbanized and
independent component cities in the Philippines pursuant to Secs. 140 and 151 of the LGC.
In fine, it is petitioner's posture that the inclusion in RA 9167 of the questioned provisions was a valid
exercise of the legislature's power to amend laws and an assertion of its constitutional authority to
set limitations on the LGU' s authority to tax.
The Court's Ruling
We find no reason to disturb the assailed rulings.
Local fiscal autonomy and the constitutionally-delegated power to tax
The power of taxation, being an essential and inherent attribute of sovereignty, belongs, as a matter
of right, to every independent government, and needs no express conferment by the people before it
can be exercised. It is purely legislative and, thus, cannot be delegated to the executive and judicial
branches of government without running afoul to the theory of separation of powers. It, however, can
be delegated to municipal corporations, consistent with the principle that legislative powers may be
delegated to local governments in respect of matters of local concern. The authority of provinces,
19
cities, and municipalities to create their own sources of revenue and to levy taxes, therefore, is not
inherent and may be exercised only to the extent that such power might be delegated to them either
by the basic law or by statute. Under the regime of the 1935 Constitution, there was no
20
constitutional provision on the delegation of the power to tax to municipal corporations. They only
derived such under a limited statutory authority, outside of which, it was deemed withheld. Local
21
governments, thus, had very restricted taxing powers which they derive from numerous tax laws.
This highly-centralized government structure was later seen to have arrested the growth and efficient
operations of LG Us, paving the way for the adoption of a more decentralized system which granted
LGUs local autonomy, both administrative and fiscal autonomy. 22
Material to the case at bar is the concept and scope of local fiscal autonomy. In Pimentel v.
Aguirre, fiscal autonomy was defined as "the power [of LGUs] to create their own sources of
23
revenue in addition to their equitable share in the national taxes released by the national
government, as well as the power to allocate their resources in accordance with their own priorities.
It extends to the preparation of their budgets, and local officials in tum have to work within the
constraints thereof."
With the adoption of the 1973 Constitution, and later the 1987 Constitution, municipal corporations
24
were granted fiscal autonomy via a general delegation of the power to tax. Section 5, Article XI of
25
the 1973 Constitution gave LGUs the "power to create its own sources of revenue and to levy taxes,
subject to such limitations as may be provided by law.'' This authority was further strengthened in the
1987 Constitution, through the inclusion in Section 5, Article X thereof of the condition that " [s]uch
taxes, fees, and charges shall accrue exclusively to local governments." 26
Accordingly, under the present Constitution, where there is neither a grant nor a prohibition by
statute, the tax power of municipal corporations must be deemed to exist although Congress may
provide statutory limitations and guidelines. The basic rationale for the current rule on local fiscal
27
autonomy is the strengthening of LGUs and the safeguarding of their viability and self-sufficiency
through a direct grant of general and broad tax powers. Nevertheless, the fundamental law did not
intend the delegation to be absolute and unconditional. The legislature must still see to it that (a) the
taxpayer will not be over-burdened or saddled with multiple and unreasonable impositions; (b) each
LGU will have its fair share of available resources; ( c) the resources of the national government will
not be unduly disturbed; and ( d) local taxation will be fair, uniform, and just. 28
In conformity to the dictate of the fundamental law for the legislature to "enact a local government
code which shall provide for a more responsive and accountable local government structure
instituted through a system of decentralization," consistent with the basic policy of local autonomy,
29
Congress enacted the LGC, Book II of which governs local taxation and fiscal matters and sets forth
the guidelines and limitations for the exercise of this power. In Pelizloy Realty Corporation v. The
Province of Benguet, the Court alluded to the fundamental principles governing the taxing powers
30
of LGUs as laid out in Section 130 of the LGC, to wit:
1. Taxation shall be uniform in each LGU.
2. Taxes, fees, charges and other impositions shall:
a. be equitable and based as far as practicable on the taxpayer's ability to pay;
b. be levied and collected only for public purposes;
c. not be unjust, excessive, oppressive, or confiscatory;
d. not be contrary to law, public policy, national economic policy, or in the restraint of
trade.
3. The collection of local taxes, fees, charges and other impositions shall in no case be let to
any private person.
4. The revenue collected pursuant to the provisions of the LGC shall inure solely to the
benefit of, and be subject to the disposition by, the LGU levying the tax, fee, charge or other
imposition unless otherwise specifically provided by the LGC.
5. Each LGU shall, as far as practicable, evolve a progressive system of taxation.
It is in the application of the adverted fourth rule, that is-all revenue collected pursuant to the
provisions of the LGC shall inure solely to the benefit of, and be subject to the disposition by, the
LGU levying the tax, fee, charge or other imposition unless otherwise specifically provided by the
LGC-upon which the present controversy grew.
RA 9167 violates local fiscal autonomy
It is beyond cavil that the City of Cebu had the authority to issue its City Ordinance No. LXIX and
impose an amusement tax on cinemas pursuant to Sec. 140 in relation to Sec. 151 of the LGC. Sec.
140 states, among other things, that a "province may levy an amusement tax to be collected from
the proprietors, lessees, or operators of theaters, cinemas, concert halls, circuses, boxing stadia,
and other places of amusement at a rate of not more than thirty percent (30%) of the gross receipts
from admission fees." By operation of said Sec. 151, extending to them the authority of provinces
31
and municipalities to levy certain taxes, fees, and charges, cities, such as respondent city
government, may therefore validly levy amusement taxes subject to the parameters set forth under
the law. Based on this authority, the City of Cebu passed, in 1993, its Revised Omnibus Tax
Ordinance, Chapter XI, Secs. 42 and 43 of which reads:
32
CHAPTER XI - Amusement Tax
lessees, or operators of theaters, cinemas, concert halls, circuses, boxing stadia and other places of
admission fees. 33
Then, after almost a decade of cities reaping benefits from this imposition, Congress, through RA
9167, amending Section 140 of the LGC, among others, transferred this income from the cities and
34
municipalities in Metropolitan Manila and highly urbanized and independent component cities, such
as respondent City of Cebu, to petitioner FDCP, which proceeds will ultimately be rewarded to the
producers of graded films. We reproduce anew Secs. 13 and 14 of RA 9167, thus:
Council pursuant to Sections 11 and 12 of this Act shall be entitled to the following privileges: a.
Amusement tax reward. - A grade "A" or "B" film shall entitle its producer to an incentive equivalent
pursuant to Sections 140 to 151 of Republic Act No. 7160 at the following rates:
1. For grade "A" films - 100% of the amusement tax collected on such film; and
2. For grade "B" films - 65% of the amusement tax collected on such films. The remaining
thirty-five (35%) shall accrue to the funds of the Council.
Section 14. Amusement Tax Deduction and Remittance. -All revenue from the amusement tax on the
graded film which may otherwise accrue to the cities and municipalities in Metropolitan Manila and
highly urbanized and independent component cities in the Philippines pursuant to Section 140 of
the amount due for each month of delinquency which shall be paid to the Council.
Considering the amendment, the present rule is that ALL amusement taxes levied by covered cities
and municipalities shall be 2iven by proprietors, operators or lessees of theatres and cinemas to
FDCP, which shall then reward said amount to the producers of graded films in this wise:
1. For grade "A" films, ALL amusement taxes collected by ALL covered LGUs on said films
shall be given to the producer thereof. The LGU, therefore, is entitled to NOTHING from its
own imposition.
2. For grade "B" films, SIXTY FIVE PERCENT (65%) of ALL amusement taxes derived by
ALL covered LGUs on said film shall be given to the producer thereof. In this case, however,
the LGU is still NOT entitled to any portion of the imposition, in view of Sec. 16 of RA 9167
which provides that the remaining 35% may be expended for the Council's operational
expenses. Thus: Section 16. Funding. - The Executive Secretary shall immediately include in
the Office of the President's program the implementation of this Act, the funding of which
shall be included in the annual General Appropriations Act.
To augment the operational expenses of the Council, the Council may:
a. Utilize the remaining thirty-five (35%) percent of the amusement tax collected during the period of
grade "B" film is exhibited, as provided under Sections 13 and 14 hereof x x x.
For petitioner, the amendment is a valid legislative manifestation of the intention to remove from the
grasp of the taxing power of the covered LGUs all revenues from amusement taxes on grade "A" or
"B" films which would otherwise accrue to them. An evaluation of the provisions in question,
however, compels Us to disagree.
RA 9167, Sec. 14 states:
Section 14. Amusement Tax Deduction and Remittance. - All revenue from the amusement tax on
A reading of the challenged provision reveals that the power to impose amusement taxes was NOT
removed from the covered LGUs, unlike what Congress did for the taxes enumerated in Sec. 133,
Article X of the LGC, which lays down the common limitations on the taxing powers of LGUs. Thus:
35
Section 133. Common Limitations on the Taxing Powers of Local Government Units. -Unless
otherwise provided herein, the exercise of the taxing powers of provinces, cities, municipalities, and
barangays shall not extend to the levy of the following:
(a) Income tax, except when levied on banks and other financial institutions;
(b) Documentary stamp tax;

(c) Taxes on estates, inheritance, gifts, legacies and other acquisitions mortis causa, except
as otherwise provided herein;
(d) Customs duties, registration fees of vessel and wharfage on wharves, tonnage dues, and
all other kinds of customs fees, charges and dues except wharfage on wharves constructed
and maintained by the local government unit concerned;
(e) Taxes, fees, and charges and other impositions upon goods carried into or out of, or
passing through, the territorial jurisdictions of local government units in the guise of charges
for wharfage, tolls for bridges or otherwise, or other taxes, fees, or charges in any form
whatsoever upon such goods or merchandise;
(f) Taxes, fees or charges on agricultural and aquatic products when sold by marginal
farmers or fishermen;
(g) Taxes on business enterprises certified to by the Board of Investments as pioneer or non-
pioneer for a period of six (6) and four (4) years, respectively from the date of registration;
(h) Excise taxes on articles enumerated under the national Internal Revenue Code, as
amended, and taxes, fees or charges on petroleum products;
(i) Percentage or value-added tax (VAT) on sales, barters or exchanges or similar

transactions on goods or services except as otherwise provided herein;
(j) Taxes on the gross receipts of transportation contractors and persons engaged in the
transportation of passengers or freight by hire and common carriers by air, land or water,
except as provided in this Code;
(k) Taxes on premiums paid by way or reinsurance or retrocession;
(l) Taxes, fees or charges for the registration of motor vehicles and for the issuance of all
kinds of licenses or permits for the driving thereof, except tricycles;
(m) Taxes, fees, or other charges on Philippine products actually exported, except as
otherwise provided herein;
(n) Taxes, fees, or charges, on Countryside and Barangay Business Enterprises and
cooperatives duly registered under R.A. No. 6810 and Republic Act Numbered Sixty-nine
hundred thirty-eight (R.A. No. 6938) otherwise known as the "Cooperative Code of the
Philippines" respectively; and
(o) Taxes, fees or charges of any kind on the National Government, its agencies and
instrumentalities, and local government units. (emphasis ours)
From the above, the difference between Sec. 133 and the questioned amendment of Sec. 140 of the
LGC by RA 9167 is readily revealed. In Sec. · 133, what Congress did was to prohibit the levy by
LGUs of the enumerated taxes. For RA 9167, however, the covered LGUs were deprived of the
income which they will otherwise be collecting should they impose amusement taxes, or, in
petitioner's own words, "Section 14 of [RA 9167] can be viewed as an express and real intention on
the part of Congress to remove from the LGU's delegated taxing power, all revenues from the
amusement taxes on graded films which would otherwise accrue to [them] pursuant to Section 140
of the [LGC]."36
In other words, per RA 9167, covered LGUs still have the power to levy amusement taxes, albeit at
the end of the day, they will derive no revenue therefrom. The same, however, cannot be said for
FDCP and the producers of graded films since the amounts thus levied by the LGUs which should
rightfully accrue to them, they being the taxing authority-will be going to their coffers. As a matter of
fact, it is only through the exercise by the LGU of said power that the funds to be used for the
amusement tax reward can be raised. Without said imposition, the producers of graded films will
receive nothing from the owners, proprietors and lessees of cinemas operating within the territory of
the covered LGU.
Taking the resulting scheme into consideration, it is apparent that what Congress did in this instance
was not to exclude the authority to levy amusement taxes from the taxing power of the covered
LGUs, but to earmark, if not altogether confiscate, the income to be received by the LGU from the
taxpayers in favor of and for transmittal to FDCP, instead of the taxing authority. This, to Our mind, is
in clear contravention of the constitutional command that taxes levied by LGUs shall accrue
exclusively to said LGU and is repugnant to the power of LGUs to apportion their resources in line
with their priorities.
It is a basic precept that the inherent legislative powers of Congress, broad as they may be, are
limited and confined within the four walls of the Constitution. Accordingly, whenever the legislature
37
exercises its power to enact, amend, and repeal laws, it should do so without going beyond the
parameters wrought by the organic law.
In the case at bar, through the application and enforcement of Sec. 14 of RA 9167, the income from
the amusement taxes levied by the covered LGUs did not and will under no circumstance accrue to
them, not even partially, despite being the taxing authority therefor. Congress, therefore, clearly
overstepped its plenary legislative power, the amendment being violative of the fundamental law's
guarantee on local autonomy, as echoed in Sec. 130(d) of the LGC, thus: Section 130. Fundamental
Principles. - The following fundamental principles shall govern the exercise of the taxing and other
revenue-raising powers of local government units:
xxxx
(d) The revenue collected pursuant to the provisions of this Code shall inure solely to the benefit of,
and be subject to the disposition by, the local government unit levying the tax, fee, charge or other
imposition unless otherwise specifically provided herein x x x.
Moreover, in Pimentel, the Court elucidated that local fiscal autonomy includes the power of LGUs
38
to allocate their resources in accordance with their own priorities. By earmarking the income on
amusement taxes imposed by the LGUs in favor of FDCP and the producers of graded films, the
legislature appropriated and distributed the LGUs' funds-as though it were legally within its control-
under the guise of setting a limitation on the LGUs' exercise of their delegated taxing power. This,
undoubtedly, is a usurpation of the latter's exclusive prerogative to apportion their funds, an
impermissible intrusion into the LGUs' constitutionally-protected domain which puts to naught the
guarantee of fiscal autonomy to municipal corporations enshrined in our basic law.
Grant of amusement tax reward incentive:
not a tax exemption

It was argued that subject Sec. 13 is a grant by Congress of an exemption from amusement taxes in
favor of producers of graded films. Without question, this Court has previously upheld the power of
Congress to grant exemptions over the power of LGUs to impose taxes. This amusement tax
39
reward, however, is not, as the lower court posited, a tax exemption. Exempting a person or entity
from tax is to relieve or to excuse that person or entity from the burden of the imposition. Here,
however, it cannot be said that an exemption from amusement taxes was granted by Congress to
the producers of graded films. Take note that the burden of paying the amusement tax in question is
on the proprietors, lessors, and operators of the theaters and cinemas that showed the graded films.
Thus, per City Ordinance No. LXIX: CHAPTER XI - Amusement Tax
lessees, or operators of theaters, cinemas, concert halls,, circuses, boxing stadia and other places of
admission fees.
Similarly, the LGC provides as follows:
Section 140. Amusement Tax. –
(a) The province may levy an amusement tax to be collected from the proprietors, lessees, or
operators of theaters, cinemas, concert halls, circuses, boxing stadia, and other places of
amusement at a rate of not more than thirty percent (30%) of the gross receipts from
admission fees.
(b) In the case of theaters or cinemas, the tax shall first be deducted and withheld by their
proprietors, lessees, or operators and paid to the provincial treasurer before the gross
receipts are divided between said proprietors, lessees, or operators and the distributors of
the cinematographic films.
Simply put, both the burden and incidence of the amusement tax are borne by the proprietors,
lessors, and operators, not by the producers of the graded films. The transfer of the amount to the
film producers is actually a monetary reward given to them for having produced a graded film, the
funding for which was taken by the national government from the coffers of the covered LGUs.
Without a doubt, this is not an exemption from payment of tax.
Declaration by the RTC, Branch 5 of the

entire RA 9167 as unconstitutional
Noticeably, the RTC, Branch 5, in its September 25, 2012 Decision in Colon Heritage v. FDCP, ruled
against the constitutionality of the entire law, not just the assailed Sec. 14. The fallo of the judgment
reads:
follows:

extinguished;
In this regard, it is well to emphasize that if it appears that the rest of the law is free from the taint of
unconstitutionality, then it should remain in force and effect if said law contains a separability clause.
A separability clause is a legislative expression of intent that the nullity of one provision shall not
invalidate the other provisions of the act. Such a clause is not, however, controlling and the courts, in
spite of it, may invalidate the whole statute where what is left, after the void part, is not complete and
workable. 40
In this case, not only does RA 9167 have a separability clause, contained in Section 23 thereof
which reads:
Section 23. Separability Clause. -If, for any reason, any provision of this Act, or any part thereof, is
declared invalid or unconstitutional, all other sections or provisions not affected thereby shall remain
in force and effect.
it is also true that the constitutionality of the entire law was not put m question in any of the said
cases.
Moreover, a perusal of RA 9167 easily reveals that even with the removal of Secs. 13 and 14 of the
law, the remaining provisions can survive as they mandate other matters like a cinema evaluation
system, an incentive and reward system, and local and international film festivals and activities that
"will promote the growth and development of the local film industry and promote its participation in
both domestic and foreign markets," and to "enhance the skills and expertise of Filipino talents." 41
Where a part of a statute is void as repugnant to the Constitution, while another part is valid, the
valid portion, if separable from the invalid, may stand-and be enforced. The exception to this is when
the parts of a statute are so mutually dependent and connected, as conditions, considerations,
inducements, or compensations for each other, as to warrant a belief that the legislature intended
them as a whole, in which case, the nullity of one part will vitiate the rest.42
Here, the constitutionality of the rest of the provisions of RA 9167 was never put in question. Too,
nowhere in the assailed judgment of the RTC was it explicated why the entire law was being
declared as unconstitutional.
It is a basic tenet that courts cannot go beyond the issues in a case, which the RTC, Branch 5 did
43
when it declared RA 9167 unconstitutional. This being the case, and in view of the elementary rule
that every statute is presumed valid, the declaration by the R TC, Branch 5 of the entirety of RA
44
9167 as unconstitutional, is improper.
Amounts paid by Colon Heritage

need not be returned
Having ruled that the questioned provisions are unconstitutional, the RTC, Branch 5, in Colon
Heritage v. FDCP, ordered the return of all amounts paid by respondent Colon Heritage to FDCP by
way of amusement tax. Thus:
follows:
extinguished;
As regards the refund, the Court cannot subscribe to this position.
It is a well-settled rule that an unconstitutional act is not a law; it . confers no rights; it imposes no
duties; it affords no protection; it creates no office; it is inoperative as if it has not been passed at all.
Applying this principle, the logical conclusion would be to order the return of all the amounts remitted
to FDCP and given to the producers of graded films, by all of the covered cities, which actually
amounts to hundreds of millions, if not billions. In fact, just for Cebu City, the aggregate deficiency
claimed by FDCP is ONE HUNDRED FIFTY NINE MILLION THREE HUNDRED SEVENTY SEVEN
THOUSAND NINE HUNDRED EIGHTY-EIGHT PESOS AND FIFTY FOUR CENTAVOS
(₱159,377,988.54). Again, this amount represents the unpaid amounts to FDCP by eight cinema
operators or proprietors in only one covered city.
An exception to the above rule, however, is the doctrine of operative fact, which applies as a matter
of equity and fair play. This doctrine nullifies the effects of an unconstitutional law or an executive act
by recognizing that the existence of a statute prior to a determination of unconstitutionality is an
operative fact and may have consequences that cannot always be ignored. It applies when a
declaration of unconstitutionality will impose an undue burden on those who have relied on the
invalid law.45
In Hacienda Luisita v. PARC, the Court elucidated the meaning and scope of the operative fact
doctrine, viz:
The "operative fact" doctrine is embodied in De Agbayani v. Court of Appeals, wherein it is stated
that a legislative or executive act, prior to its being declared as unconstitutional by the courts, is valid
and must be complied with, thus:
xxx xxx xxx
This doctrine was reiterated in the more recent case of City of Makati v. Civil Service Commission,
wherein we ruled that:
Moreover, we certainly cannot nullify the City Government's order of suspension, as we have no
reason to do so, much less retroactively apply such nullification to deprive private respondent of a
compelling and valid reason for not filing the leave application. For as we have held, a void act
though in law a mere scrap of paper nonetheless confers legitimacy upon past acts or omissions
done in reliance thereof. Consequently, the existence of a statute or executive order prior to its being
adjudged void is an operative fact to which legal consequences are attached. It would indeed be
ghastly unfair to prevent private respondent from relying upon the order of suspension in lieu of a
formal leave application.
The applicability of the operative fact doctrine to executive acts was further explicated by this Court
in Rieta v. People, thus:
Petitioner contends that his arrest by virtue of Arrest . Search and Seizure Order (ASSO) No. 4754
was invalid, as the law upon which it was predicated-General Order No. 60, issued by then President
Ferdinand E. Marcos - was subsequently declared by the Court, in Tanada v. Tuvera, 33 to have no
force and effect. Thus, he asserts, any evidence obtained pursuant thereto is inadmissible in
evidence.
We do not agree. In Tanada, the Court addressed the possible effects of its declaration of the
invalidity of various presidential issuances. Discussing therein how such a declaration might affect
1a\^/phi1
acts done on a presumption of their validity, the Court said:
" ... In similar situations in the past this Court had taken the pragmatic and realistic course set forth in
Chicot County Drainage District vs. Baxter Bank to wit:
'The courts below have proceeded on the theory that the Act of Congress, having been found to be
unconstitutional, was not a law; that it was inoperative, conferring no rights and imposing no duties,
and hence affording no basis for the challenged decree. . . . It is quite clear, however, that such
broad statements as to the effect of a determination of unconstitutionality must be taken with
qualifications. The actual existence of a statute, prior to [the determination of its invalidity], is an
operative fact and may have consequences which cannot justly be ignored. The past cannot always
be erased by a new judicial declaration. The effect of the subsequent ruling as to invalidity may have
to be considered in various aspects – with respect to particular conduct, private and official.
Questions of rights claimed to have become vested, of status, of prior determinations deemed to
have finality and acted upon accordingly, of public policy in the light of the nature both of the statute
and of its previous application, demand examination. These questions are among the most difficult of
those which have engaged the attention of courts, state and federal, and it is manifest from
numerous decisions that an all-inclusive statement of a principle of absolute retroactive invalidity
cannot be justified.'
xxx xxx xxx
"Similarly, the implementation/ enforcement of presidential decrees prior to their publication in the
Official Gazette is 'an operative fact which may have consequences which cannot be justly ignored.
The past cannot always be erased by a new judicial declaration ... that an all-inclusive statement of a
principle of absolute retroactive invalidity cannot be justified."
The Chicot doctrine cited in Tanada advocates that, prior to the nullification of a statute, there is an
imperative necessity of taking into account its actual existence as an operative fact negating the
acceptance of "a principle of absolute retroactive invalidity." Whatever was done while the legislative
or the executive act was in operation should be duly recognized and presumed to be valid in all
respects. The ASSO that was issued in 1979 under General Order No. 60 - long before our Deeision
n Taiiada and the arrest of petitioner - is an operative fact that can no longer be disturbed or simply
ignored. (citations omitted; emphasis in the original.)
Bearing in mind that PARC Resolution No. 89-12-2-an executive act-was declared invalid in the
instant case, the operative fact doctrine is clearly applicable.46
Here, to order FDCP and the producers of graded films which may have already received the
amusement tax incentive reward pursuant to the questioned provisions of RA 9167, to return the
amounts received to the respective taxing authorities would certainly impose a heavy, and possibly
crippling, financial burden upon them who merely, and presumably in good faith, complied with the
legislative fiat subject of this case. For these reasons, We are of the considered view that the
application of the doctrine of operative facts in the case at bar is proper so as not to penalize FDCP
for having complied with the legislative command in RA 9167, and the producers of graded films who
have already received their tax cut prior to this Decision for having produced top-quality films.
With respect to the amounts retained by the cinema proprietors due to petitioner FDCP, said
proprietors are required under the law to remit the same to petitioner. Obeisance to the rule of law
must always be protected and preserved at all times and the unjustified refusal of said proprietors
cannot be tolerated. The operative fact doctrine equally applies to the non-remittance by said
proprietors since the law produced legal effects prior to the declaration of the nullity of Secs. 13 and
14 in these instant petitions. It can be surmised, however, that the proprietors were at a loss whether
or not to remit said amounts to FDCP considering the position of the City of Cebu for them to remit
the amusement taxes directly to the local government. For this reason, the proprietors shall not be
liable for surcharges.
In view of the declaration of nullity of unconstitutionality of Secs. 13 and 14 of RA 9167, all

amusement taxes remitted to petitioner FDCP prior to the date of the finality of this decision shall
remain legal and valid under the operative fact doctrine. Amusement taxes due to petitioner but
unremitted up to the finality of this decision shall be remitted to petitioner within thirty (30) days from
date of finality. Thereafter, amusement taxes previously covered by RA 9167 shall be remitted to the
local governments.
WHEREFORE, premises considered, the consolidated petitions are hereby PARTIALLY GRANTED.
The questioned Decision of the RTC, Branch 5 of Cebu City in Civil Case No. CEB-35601 dated
September 25, 2012 and that of the R TC, Branch 14, Cebu City in Civil Case No. CEB-35529 dated
October 24, 2012, collectively declaring Sections 13 and 14 of Republic Act No. 9167 invalid and
unconstitutional, are hereby AFFIRMED with MODIFICATION.
As modified, the decisions of the lower courts shall read:
1. Civil Case No. CEB-35601 entitled Colon Heritage Realty Corp. v. Film Development Council of
the Philippines:
WHEREFORE, in view of all the foregoing, Judgment is hereby rendered in favor of Colon Heritage
Realty Corp. and against the Film Development council of the Philippines, as follows: 1. Declaring
Sections 13 and 14 of Republic Act No. 9167 otherwise known as an Act Creating the Film
Development Council of the Philippines, Defining its Powers and Functions, Appropriating Funds
therefor arid for other purposes, as invalid and unconstitutional;
2. Declaring that the Film Development Council of the Philippines cannot collect under
Sections 13 and 14 of R.A. 9167 as of the finality of the decision in G.R. Nos. 203754 and
204418;
3. Declaring that Colon Heritage Realty Corp. has the obligation to remit the amusement
taxes withheld on graded cinema films to FDCP under Sections 13 and 14 of R.A. 9167 for
taxes due prior to the finality of this Decision, without surcharges;
4. Declaring that upon the finality of this decision, all amusement taxes withheld and those
which may be collected by Colon Heritage Realty Corp. on graded films shown in its cinemas
in Cebu City shall be remitted to Cebu City pursuant to City Ordinance LXIX, Chapter XI,
Section 42.
2. Civil Case No. CEB-35529 entitled City of Cebu v. Film Development Council of the Philippines:
WHEREFORE, in view of all the disquisitions, judgment is rendered in favor of the City of Cebu
against the Film development Council of the Philippines, as follows:
1. Declaring Sections 13 and 14 of Republic Act No. 9167 otherwise known as an Act
Creating the Film Development Council of the Philippines, Defining its Powers and
Functions, Appropriating Funds therefor and for other purposes, void and unconstitutional;
2. Declaring that the Film Development Council of the Philippines cannot collect under
Sections 13 and 14 of R.A. 9167 as of the finality of this Decision;
3. Declaring that Intervenor SM Cinema Corporation has the obligation to remit the
amusement taxes, withheld on graded cinema films to respondent FDCP under Sections 13
and 14 of R.A. 9167 for taxes due prior to the finality of this Decision, without surcharges;
4. Declaring that after the finality of this Decision, all amusement taxes withheld and those
which may be collected by Intervenor SM on graded films shown in SM Cinemas in Cebu
City shall be remitted to petitioner Cebu City pursuant to City Ordinance LXIX, Chapter XI,
Section 42.
As to the sum of PhP 76,836,807.08 remitted by the Intervenor SM to petitioner City of Cebu, said
amount shall be remitted by the City of Cebu to petitioner FDCP within thirty (30) days from finality of
this decision in G.R. Nos. 203754 and 204418 without interests and surcharges. Since Sections 13
and 14 of Republic Act No. 9167 were declared void and unconstitutional, all remittances of
amusement taxes pursuant to said Sections 13 and 14 of said law prior to the date of finality of this
Decision shall remain valid and legal. Cinema proprietors who failed to remit said amusement taxes
to petitioner FDCP prior to the date of finality of this Decision are obliged to remit the same, without
surcharges, to petitioner FDCP under the doctrine of operative fact.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Baguio City
FIRST DIVISION
G.R. No. 197937 April 3, 2013

vs.
SM PRIME HOLDINGS, INC., Respondent.
DECISION
VILLARAMA, JR., J.:
Petitioner appeals the Orders1 dated February 21, 2011 and July 25, 2011 of the Regional Trial Court
(RTC) of Pasig City, Branch 166 which granted respondent's motion to dismiss on the ground of litis
pendentia.
The factual antecedents:
Respondent SM Prime Holdings, Inc. is the owner and operator of cinema houses at SM Cebu in
Cebu City. Under Republic Act (R.A.) No. 7160 otherwise known as the Local Government Code of
1991, owners, proprietors and lessees of theaters and cinema houses are subject to amusement tax
as provided in Section 140, Book II, Title One, which reads:
SECTION 140. Amusement Tax-
(a) The province may levy an amusement tax to be collected from the proprietors, lessees, or
operators of theaters, cinemas, concert halls, circuses, boxing stadia, and other places of
amusement at a rate of not more than thirty percent (30%) of the gross receipts from admission fees.
(b) In the case of theaters or cinemas, the tax shall first be deducted and withheld by their
proprietors, lessees, or operators and paid to the provincial treasurer before the gross receipts are
divided between said proprietors, lessees, or operators and the distributors of the cinematographic
films.
xxxx
(d) The sangguniang panlalawigan may prescribe the time, manner, terms and conditions for the
payment of tax. In case of fraud or failure to pay the tax, the sangguniang panlalawigan may impose
such surcharges, interest and penalties as it may deem appropriate.
On June 21, 1993, the Sangguniang Panglunsod of Cebu City approved City Tax Ordinance No.
LXIX2 pursuant to Section 140, in relation to Section 151 3 of the Local Government Code of 1991.
Chapter XI of said ordinance provides:
CHAPTER XI
Amusement Tax
SECTION 42. Rate of Tax. – There shall be paid to the Office of the City Treasurer by the
proprietors, lessees, or operators of theaters, cinemas, concert halls, circuses, boxing stadia and
other places of amusement an amusement tax at the rate of thirty percent (30%) of the gross
receipts from admission fees.
SECTION 43. Manner of Payment. – In the case of theaters or cinemas, the tax shall first be
deducted and withheld by their proprietors, lessee, or operators and paid to the city treasurer before
the gross receipts are divided between said proprietors, lessee, operators and the distributors of the
xxxx
SECTION 45. Time of Payment. – The tax shall be due and payable within the first twenty (20) days
of the succeeding month.
On June 7, 2002, Congress approved R.A. No. 9167 4 which created the Film Development Council
of the Philippines, herein petitioner. Petitioner’s mandate includes the development and
implementation of "an incentive and reward system for the producers based on merit to encourage
the production of quality films." 5 The Cinema Evaluation Board (CEB) was established to review and
grade films in accordance with criteria and standards and procedures it shall formulate subject to the
approval of petitioner.
Films reviewed and graded favorably by the CEB are given the following privileges:
Council pursuant to Sections 11 and 12 of this Act shall be entitled to the following privileges:
a. Amusement tax reward. - A grade "A" or "B" film shall entitle its producer to an incentive equivalent
pursuant to Sections 140 and 151 of Republic Act No. 7160 at the following rates:
1. For grade "A" films - 100% of the amusement tax collected on such films; and
2. For grade "B" films. - 65% of the amusement tax collected on such films. The remaining thirty-five
(35%) shall accrue to the funds of the Council.
For the purpose of implementing the above incentive system, R.A. No. 9167 mandates the
remittance of the proceeds of the amusement tax collected by the local government units (LGUs) to
petitioner.
Section 14. Amusement Tax Deduction and Remittances. - All revenue from the amusement tax on
the amount due for each month of delinquency which shall be paid to the Council. (Emphasis
supplied.)
To ensure enforcement of the above provision, the law empowered petitioner not only to impose
administrative fines and penalties but also to cause or initiate criminal or administrative prosecution
to the violators.6
On January 27, 2009, petitioner through the Office of the Solicitor General (OSG) sent a demand
letter to respondent for the payment of the sum of P76,836,807.08 representing the amusement tax
rewards due to producers of 89 films graded "A" and "B" which were shown at SM cinemas from
September 11, 2003 to November 4, 2008.7
Sometime in May 2009, the City of Cebu filed in the RTC of Cebu City (Cebu City RTC) a
petition8 for declaratory relief with application for a writ of preliminary injunction against the petitioner,
docketed as Civil Case No. CEB-35529. The City of Cebu sought to declare Section 14 of R.A. No.
9167 as invalid and unconstitutional on grounds that: (1) it violates the basic policy on local
autonomy; (2) it constitutes an undue limitation of the taxing power of LGUs; (3) it unduly deprives
LGUs of the revenue from the amusement tax imposed on theatre owners and operators; and (4) it
amounts to technical malversation since revenue from the collection of amusement taxes that would
otherwise accrue to and form part of the general fund of the LGU concerned would now be directly
awarded to a private entity – the producers of graded films – bypassing the budget process of the
LGU and without the proper appropriation ordinance from the sanggunian. 9
A temporary restraining order (TRO) was issued by the Cebu City RTC enjoining petitioner and its
duly constituted agents from collecting the amusement tax incentive award from the owners,
proprietors or lessees of theaters and cinema houses within the City of Cebu; imposing surcharge on
the unpaid amount; filing any case or suit of whatever kind or nature due to or arising from the failure
to deduct, withhold and remit the amusement tax incentives award on the graded films of petitioner;
and initiating administrative or criminal prosecution against the said owners, proprietors or lessees. 10
On October 16, 2009, petitioner sued the respondent for the payment of P76,836,807.08
representing the unpaid amusement tax incentive reward (with 5% surcharge for each month of
delinquency) due to the producers of 89 graded films which were shown at SM Cinemas in Cebu
City from September 11, 2003 to November 4, 2008, plus a 5% surcharge for each month of
delinquency until fully paid. Said collection suit was docketed as Civil Case No. 72238 of the RTC of
Pasig City (Pasig City RTC), Branch 166.11
Petitioner filed a Comment (In Lieu of Answer) 12 in Civil Case No. CEB-35529 praying for the
dismissal of the petition filed by the City of Cebu.
Meanwhile, respondent filed a Motion to Dismiss 13 in Civil Case No. 72238 arguing that petitioner’s
complaint merits outright dismissal considering that its claim had already been extinguished by
respondent’s prior payment or remittance of the subject amusement taxes to the City of Cebu.
Respondent called attention to Section 26 of the Implementing Rules and Regulations (IRR) of R.A.
No. 9167 which directed petitioner to execute a Memorandum of Agreement (MOA) with proprietors,
operators and lessees of theaters and cinemas as well as movie producers, on the systems and
procedures to be followed for the collection, remittance and monitoring of the amusement taxes
withheld on graded films. In the apparent absence of such MOA and the "general
procedure/process" duly adopted by all proprietors, operators and lessees of theaters or cinemas,
respondent has been withholding such taxes and remitting the same to the City of Cebu pursuant to
Cebu City Tax Ordinance No. LXIX, as shown by the Certification 14 dated February 5, 2009 issued by
the Office of the Treasurer of Cebu City stating that respondent "had religiously remitted their
monthly amusement taxes due to the Cebu City Government." Respondent pointed out that even the
Cebu City Government recognizes that when it receives the amusement taxes collected or withheld
by the owners, operators and proprietors of theaters and cinema houses on graded films, it is
mandated to forward the said taxes to petitioner.
In its Comment15 on the motion to dismiss, petitioner argued that Section 14 of R.A. No. 9167 is valid
and constitutional. As to respondent’s defense of prior payment, petitioner asserted that the
execution of a MOA with the proprietors, owners and lessees of theaters and cinema houses is not a
condition sine qua non for a valid enforcement of the provisions of R.A. No. 9167. The IRR cited by
respondent cannot prevail over the clear import of the law on which it is based, and hence
respondent cannot invoke it to excuse non-payment of the amusement tax incentive rewards due to
the producers of graded films which should have been remitted to petitioner in accordance with
Section 14 of R.A. No. 9167. Petitioner pointed out that from the time R.A. No. 9167 took effect up to
the present, all the cities and municipalities in Metropolitan Manila and highly urbanized and
independent component cities in the Philippines, with the sole exception of Cebu City and a number
of theater establishments therein, have unanimously acceded to and have faithfully complied with
the mandate of said law notwithstanding the absence of a MOA.
Respondent filed its Reply16 to petitioner’s Comment maintaining that its remittance of the
amusement tax incentive reward to the City of Cebu extinguished its obligation to petitioner, and
arguing that the case should be dismissed on the additional ground of litis pendentia.
On August 13, 2010, respondent filed in Civil Case No. CEB-35529 a Motion for Leave to File and
Admit Attached Comment-in-Intervention.17 In its Comment-in-Intervention With Interpleader,
respondent prayed that the judgment on the validity and constitutionality of Sections 13 and 14 of
R.A. No. 9167 include a pronouncement on its rights and duties as a consequence of such
judgment, as it clearly has a legal interest in the success of either party in the case. 18 On October 21,
2010, the Cebu City RTC granted respondent’s motion for intervention.19
On February 21, 2011, the Pasig City RTC issued the assailed order granting the motion to dismiss,
holding that the action before the Cebu City RTC (Civil Case No. CEB-35529) is the appropriate
vehicle for litigating the issues between the parties in Civil Case No. 72238. Moreover, said court
found all the elements of litis pendentia present and accordingly dismissed the complaint.
Petitioner’s motion for reconsideration was likewise denied. In a direct recourse to this Court,
petitioner advances the following questions of law:
THE RTC, BRANCH 166, OF PASIG CITY UTTERLY IGNORED AND DISREGARDED THE WELL-
SETTLED RULE THAT UNLESS AND UNTIL A SPECIFIC PROVISION OF LAW IS DECLARED
INVALID AND UNCONSTITUTIONAL, THE SAME IS ENTITLED TO OBEDIENCE AND RESPECT.
II
THE RTC, BRANCH 166, OF PASIG CITY ERRED IN DISMISSING THE COMPLAINT IN CIVIL
CASE NO. 72238 ON THE GROUND OF LITIS PENDENTIA.20
Petitioner reiterates that every law has in its favor the presumption of constitutionality, and unless
and until a specific provision of law is declared invalid and unconstitutional, the same is valid and
binding for all intents and purposes. In dismissing the complaint, the Pasig City RTC abdicated its
solemn duty and jurisdiction to rule on the constitutional issues raised by respondent in Civil Case
No. 72238 upon the mistaken assumption that only the Cebu City RTC in Civil Case No. CEB-35529
can directly determine the constitutionality of Sections 13 and 14 of R.A. No. 9167 and the
indispensability of a MOA in the remittance to petitioner of amusement tax rewards due to the
producers of graded films. Petitioner further contends that, contrary to the ruling of the Pasig City
RTC, the principle of judicial courtesy is not applicable because a judgment in Civil Case No. CEB-
35529 will not result in rendering moot the issues brought before the Pasig City RTC in Civil Case
No. 72238.
The petition has no merit.
We do not subscribe to petitioner’s view that the dismissal of the complaint in Civil Case No. 72238
amounts to an abdication of the Pasig City RTC’s concurrent jurisdiction to settle constitutional
questions involving a statute or its implementing rules. The 1997 Rules of Civil Procedure, as
amended, provides for specific grounds for the dismissal of any complaint in civil cases including
those where the trial court has competence and authority to hear and decide the issues raised and
relief sought. One of these grounds is litis pendentia.
Litis pendentia, as a ground for the dismissal of a civil action, refers to a situation where two actions
are pending between the same parties for the same cause of action, so that one of them becomes
unnecessary and vexatious.21 It is based on the policy against multiplicity of suits 22 and authorizes a
court to dismiss a case motu proprio.23
Section 1(e), Rule 16 of the 1997 Rules of Civil Procedure, as amended, thus provides:
Within the time for but before filing the answer to the complaint or pleading asserting a claim, a
motion to dismiss may be made on any of the following grounds:SECTION 1. Grounds.
xxxx
(e) That there is another action pending between the same parties for the same cause.
The requisites in order that an action may be dismissed on the ground of litis pendentia are: (a) the
identity of parties, or at least such as representing the same interest in both actions; (b) the identity
of rights asserted and relief prayed for, the relief being founded on the same facts, and (c) the
identity of the two cases such that judgment in one, regardless of which party is successful, would
amount to res judicata in the other.24
Petitioner submits that while there is identity of parties in Civil Case Nos. CEB-35529 and 72238, the
second and third requisites are absent. It points out that in the former, it is not claiming any monetary
award but merely prayed for the dismissal of the declaratory relief petition. Moreover, since the
issues raised in the former case are purely legal, petitioner is not necessarily called upon to present
testimonial or documentary evidence to prove factual matters. Petitioner thus concludes that the
judgment in former case would not amount to res judicata in the latter case. Petitioner further notes
that when a judgment dismissing the former case is appealed and the assailed provisions of R.A.
No. 9167 are declared constitutional by this Court, petitioner will not be automatically awarded the
unpaid amusement taxes it is claiming against respondent in Civil Case No. 72238.
Petitioner’s submissions fail to persuade.
The underlying principle of litis pendentia is the theory that a party is not allowed to vex another
more than once regarding the same subject matter and for the same cause of action. This theory is
founded on the public policy that the same subject matter should not be the subject of controversy in
courts more than once, in order that possible conflicting judgments may be avoided for the sake of
the stability of the rights and status of persons, 25and also to avoid the costs and expenses incident to
numerous suits.26
Among the several tests resorted to in ascertaining whether two suits relate to a single or common
cause of action are: (1) whether the same evidence would support and sustain both the first and
second causes of action; and (2) whether the defenses in one case may be used to substantiate the
complaint in the other.27
The determination of whether there is an identity of causes of action for purposes of litis pendentia is
inextricably linked with that of res judicata, each constituting an element of the other. In either case,
both relate to the sound practice of including, in a single litigation, the disposition of all issues
relating to a cause of action that is before a court.28
In this case, what petitioner failed to take into account is that the Cebu City RTC allowed respondent
to intervene in Civil Case No. CEB-35529 by way of an interpleader action as to which government
entity – whether petitioner or the Cebu City Government – should have remitted the amusement
taxes it collected from the admission fees of graded films shown in respondent’s cinemas in Cebu
City. It must be noted that since 1993 when City Tax Ordinance No. LXIX was enforced, respondent
had been faithfully remitting amusement taxes to the City of Cebu and because of the collection suit
filed by petitioner, such defense of prior payment and evidence to prove it which respondent could
have presented at the trial in Civil Case No. 72238 would be the same defense and evidence
necessary to sustain respondent’s interpleader action in Civil Case No. CEB-35529 before the Cebu
City RTC. Also, in both cases, respondent had raised the matter of conflicting provisions of R.A. No.
9167 and Local Government Code of 1991, while petitioner pleaded and argued the constitutionality
and validity of Sections 13 and 14 of R.A. No. 9167.
The interpleader action of respondent/intervenor, anchored on its defense of prior payment, would
be considered by the Cebu City RTC in its final determination of the parties’ rights and interests as it
resolves the legal questions. The Pasig City RTC is likewise confronted with the legal and
constitutional issues in the collection suit, alongside with respondent’s defense of prior payment. It is
evident that petitioner’s claim against the respondent hinges on the correct interpretation of the
conflicting provisions of the Local Government Code of 1991 and R.A. No. 9167. There could be no
doubt that a judgment in either case would constitute res judicata to the other. Sound practice thus
dictates that the common factual and legal issues be resolved in a single proceeding.
We also find no reversible error in the Pasig City RTC’s ruling that Civil Case No. CEB-35529 is the
appropriate vehicle for litigating the issues raised by petitioner and respondent in Civil Case No.
72238.
Under the established jurisprudence on litis pendentia, the following considerations predominate in
the ascending order of importance in determining which action should prevail: (1) the date of filing,
with preference generally given to the first action filed to be retained; (2) whether the action sought
to be dismissed was filed merely to preempt the later action or to anticipate its filing and lay the basis
for its dismissal; and (3) whether the action is the appropriate vehicle for litigating the issues
between the parties.29
Moreover, considering the predicament of respondent, we also find relevant the criterion of the
consideration of the interest of justice we enunciated in Roa v. Magsaysay. 30 In applying this
standard, what was asked was which court would be "in a better position to serve the interests of
justice," taking into account (a) the nature of the controversy, (b) the comparative accessibility of the
court to the parties and (c) other similar factors.31
In this case, all things considered, there can be no doubt Civil Case No. CEB-35529 is the
appropriate vehicle to determine the rights of petitioner and respondent. In that declaratory relief
case instituted by the City of Cebu, to which respondent had been remitting the subject amusement
taxes being claimed by petitioner in Civil Case No. 72238, the issue of validity or constitutionality of
Sections 13 and 14 of R.A. No. 9167 was directly pleaded and argued between petitioner and the
City of Cebu, with subsequent inclusion of respondent as intervenor. Moreover, the presence of City
of Cebu as party plaintiff would afford proper relief to respondent in the event the Cebu City R TC
renders judgment sustaining the validity of the said provisions. Respondent had vigorously asserted
in both courts that it had remitted the amusement taxes in good faith to the City of Cebu which had
threatened sanctions for non-compliance with City Tax Ordinance No. LXIX, and that it should not be
made to pay once again the same taxes to petitioner. As equally dire consequences for non-
compliance with the demand for payment having been made by petitioner, such defense of good
faith is best ventilated in Civil Case No. CEB-35529 where the City of Cebu is a party.
Petitioner's insistence that the Pasig City RTC proceed with trial notwithstanding the pendency of
Civil Case No. CEB-35529 before the Cebu City RTC is thus untenable. To allow the parties to
litigate the same issues upon the same evidence and defenses will only defeat the public policy
reasons behind litis pendentia, which, like the rule on forum shopping, aims to prevent the
unnecessary burdening of our courts and undue taxing of the manpower and financial resources of
the judiciary; to avoid the situation where co-equal courts issue conflicting decisions over the same
cause; and to preclude one party from harassing the other party through the filing of an unnecessary
or vexatious suit.32
WHEREFORE, the petition for review on certiorari is DENIED. The Orders dated February 21, 2011
and July 25, 2011 of the Regional Trial Court of Pasig City, Branch 166 are hereby AFFIRMED.
No pronouncement as to costs.
SO ORDERED.
THIRD DIVISION
G.R. No. 190814, October 09, 2013
MICHELLE LANA BROWN-ARANETA, FOR HERSELF AND REPRESENTING HER MINOR DAUGHTERS,
ARABELLA MARGARITA B. ARANETA AND AVANGELINA MYKAELA B. ARANETA, Petitioners, v. JUAN
IGNACIO ARANETA, Respondent.
DECISION
VELASCO JR., J.:
The Case
Assailed and sought to be set aside in this Petition for Review on Certiorari under Rule 45 are the May 11,
2009 Decision1 of the Court of Appeals (CA) in CA-G.R. SP No. 105442 and its Resolution 2 of December 28,
2009 denying petitioner’s motion for reconsideration of said decision.
The assailed decision ordered the dismissal of Civil Case No. 08-023 of the Regional Trial Court (RTC),
Branch 207 in Muntinlupa City and nullified all the issuances it made in that case, a petition for protection
order under Republic Act No. (RA) 9262, otherwise known as the Anti-Violence Against Women and Their
Children Act of 2004, commenced by petitioner Michelle Lana Brown-Araneta (Michelle) against respondent
Juan Ignacio Araneta (Juan Ignacio) before that court.
The Facts
On April 14, 2000, Juan Ignacio and Michelle were married in Las Vegas, Nevada, USA. The union produced
two (2) children, namely: Arabella Margarita (Ara) and Avangelina Mykaela (Ava), born on February 22,
2003 and April 15, 2005, respectively. After a little over seven years of disharmonious relationship, husband
and wife separated. Since the couple’s estrangement and de facto separation, Ara and Ava have remained in
Michelle’s custody.
In November 2007 before the RTC of Makati City, Juan Ignacio filed, pursuant to A.M. No. 03-04-04-
SC3or The Rule on Custody of Minors and Writ of Habeas Corpus in Relation to Custody of Minors (Rule on
Custody of Minors), a Petition for the Custody of the Minors Arabella Margarita Araneta and
Avangelina Mykaela Araneta (Petition for Custody), with prayer for visitation rights against Michelle and
her mother, Glenda B. Santos (Santos). Docketed as SP PROC. Case No. M-6543, this petition was
eventually raffled to Branch 60 of the Makati City RTC (Makati RTC), presided over by Judge Marissa
Macaraig-Guillen (Judge Macaraig-Guillen).
Juan Ignacio invoked, as main basis for his petition, his right as father of Ava and Ara to have custody of
and to exercise parental authority over them, albeit both were below seven (7) years of age. In this regard,
he claimed that, apart from refusing to communicate with him, both Michelle and Santos have completely
barred him from seeing or getting in touch with his daughters despite repeated requests. He thus prayed the
court to:
chanroblesvirtualawlibrary
1. Immediately issue a Provisional Order granting [him] visitation rights with respect to the minors [Ava and
Ara] x x x during the pendency of these proceedings;
2. Immediately issue an ex parte Hold Departure Order preventing the departure of [both] minors x x x
from the country; and
3. After appropriate proceedings, render judgment granting [him] joint custody, or alternatively, granting
him permanent visitation rights, over [both] his legitimate children x x x. 4
To facilitate service of summons, Juan Ignacio, via a Motion and Urgent Manifestation of November 27,
2007, would inform the Makati RTC that Michelle and Santos may have transferred to No. 408 Anonas
Street, Ayala Alabang Village, Muntinlupa City (Anonas residence), an address different from what he
provided in his basic petition, referring to the Molave Drive residence in the same village. In her Officer’s
Return dated December 10, 2007,5 process server Linda Fallorin stated the following: (1) she initially
attempted to serve the summons upon Michelle and Santos on December 7, 2007 at the Anonas residence,
only to be told by one Roberto Anonas, who refused to receive the summons, that both were out at that
time; and (2) on December 10, 2007, she was finally able to serve the summons upon Michelle and Santos
by substituted service through the driver of Santos’ husband.
In her Answer,6 Santos disclaimed knowledge of Michelle’s present address, or her whereabouts, adding in
this regard that the adverted Molave Drive residence was being rented out. As to be expected, Santos
traversed Juan Ignacio’s insinuation that she has conspired with Michelle to keep Ara and Ava out of his
reach, or worse, hide them from him. And in an obvious bid to deny Juan Ignacio of visitation rights, Santos
raised the question of the court’s jurisdiction over Michelle and then rattled off negative habits and character
traits of Juan Ignacio as husband and father.
On December 18, 2007, Juan Ignacio moved for the issuance of provisional visitorial order. After a hearing
on this motion, the Makati RTC issued on December 21, 2007 an Order 7 allowing Juan Ignacio to visit her
daughters on Christmas Day and New Year’s Day. The visiting grant came after the court, taking stock of
the Officer’s Return, declared that it has acquired jurisdiction over the person of Michelle, but despite being
given the opportunity to file a responsive pleading, she has failed to do so.
Christmas and New Year’s Day 2008 came and went, but Juan Ignacio was unable to see his little girls in
those days for reasons of little materiality to this narration.
On January 2, 2008, Michelle filed in SP PROC. Case No. M-6543 a Motion to Admit Answer and
an Answer (with Affirmative Defenses and With Very Urgent Ex-Parte Motion for Issuance of
Protection Order).8 cralawlibrary
In her Motion to Admit Answer, Michelle acknowledged learning from her mother about the delivery of the
summons and a copy of the petition for custody to their Anonas Residence. She, however, disregarded said
summons thinking, so she claimed, that it was improperly served upon her person. It was, she added, only
upon learning of the issuance of the provisional order of visitation rights that she gathered enough courage
to come out to present her side.9 cralawlibrary
In her Answer, on the other hand, Michelle owned up sole responsibility for the decision not to allow her
husband to see their daughters. In support of her plea for the dismissal of his petition for custody, the denial
of visitation rights pendente lite, and in the meanwhile the ex parte issuance in her favor of a temporary
protection order (TPO),10 she recounted in lurid details incidents characterizing the painful life she and her
children allegedly had to endure from her husband whom she tagged as a drug user, sexual pervert,
emotionally unstable and temperamental, among other names. In her words, Juan Ignacio’s “wild, decadent,
irresponsible lifestyle makes him unfit to exercise parental authority and even enjoy visitation rights.” 11 cralawlibrary
During the January 4, 2008 hearing on Michelle’s prayer for a TPO, Judge Macaraig-Guillen expressed her
bent to maintain her jurisdiction over SP PROC. Case No. M-6543 and her disinclination to issue the desired
TPO. In her Order of even date, she directed that the ensuing observations she earlier made be entered into
the records: chanroblesvirtualawlibrary
1. She is not inclined to issue a [TPO] in favor of respondent at this time because she initially questioned the
jurisdiction of this Court over her person and only resorted to this Urgent Ex-Parte Motion for a Protective
Order after she realized that the Court had every intention of maintaining jurisdiction over this case x x x. It
was emphasized that the Court does not issue Protective Orders over a person who has not bothered to
appear in Court x x x. Until the respondent herself shows up in order to recognize the jurisdiction of this
Court over her and in order to substantiate the allegations in her Urgent Motion, there is no basis for this
Court to address the matters contained in the said Urgent Ex-Parte Motion.
2. Secondly, x x x even assuming for the sake of argument that the petitioner is, as respondent described
him to be, temperamental, violent, a habitual drug user and a womanizer, these qualities cannot, per se,
prevent him from exercising visitation rights over his children because these are rights due to him
inherently, he being their biological father.12
During the same hearing, the Makati RTC granted Juan Ignacio visitation rights on one (1) Saturday and
Sunday in January 2008 considering that he was unable to see his children on the days granted under the
December 21, 2007 Order.
Subsequently, by its Order of January 21, 2008, as would later be effectively reiterated by another
Order13 of March 7, 2008, the Makati RTC resolved to deny admission of Michelle’s answer to the petition for
custody and declared her in default, pertinently disposing thusly: chanroblesvirtualawlibrary
WHEREFORE, in view of the foregoing, respondent Araneta’s Motion to Admit Answer of January 2, 2008 is
herein DENIED for lack of merit.
Because of respondent Araneta’s failure to file her responsive pleading within the reglementary period, x x x
respondent Araneta is herein declared in DEFAULT in this proceedings.
As a consequence of this ruling, x x x the petitioner is allowed to present evidence ex-parte to substantiate
the allegation in his Petition x x x. 14
On January 21, 2008 also, Michelle interposed a Motion to Withdraw Urgent Ex-Parte Motion for Protective
Order, there pointing out that no right of Juan Ignacio, if any, will be affected if the said urgent motion is
withdrawn or expunged from her answer. And obviously to sway the Makati RTC’s mind of the resulting
insignificance of such withdrawal, if approved, Michelle cited the ensuing observation thus made by the court
during the hearing on January 4, 2008: chanroblesvirtualawlibrary
COURT: chanroblesvirtualawlibrary
Well, I agree, she should really appear but whether or not she should really appear here and substantiate
her allegations for the issuance of a protective order as far as I am concerned is irrelevant insofar as the
enforcement of petitioner’s visitation rights are concerned, this case is for custody, this is not a case for the
issuance of protective orders that is only a counter manifestation that she is seeking. 15
It is upon the foregoing set of events and proceedings that Michelle, on March 25, 2008, instituted, pursuant
to RA 9262, a Petition For Temporary and Permanent Protection Order 16 (Petition for Protection Order)
before the RTC in Muntinlupa City, docketed as Civil Case No. 08-023. Thereat, Michelle claimed, among
other things, that in the course of their marriage, Juan Ignacio made her and their children engage in sexual
acts inimical to their emotional, physical and psychological development and well-being; that he engaged in
perverted sexual acts with friends, victimizing her and the children; that he has consistently failed and
refused to support their family; and that he has a violent temper and was consistently harassing and
threatening her to get sole custody of the children. Michelle volunteered the information that, per her
therapist, she is suffering from Battered Woman’s Syndrome. 17 cralawlibrary
In the verification portion of her petition for protection order, Michelle stated that “[t]here is x x x a pending
petition for the custody of our children in the [RTC] Br. 60, Makati City, x x x Civil Case No. M-6543.” 18 cralawlibrary
The following events and proceedings then transpired: chanroblesvirtualawlibrary
1. On March 31, 2008, the Muntinlupa RTC granted Michelle’s prayer for a TPO which, at its most basic,
ordered Juan Ignacio (1) to stay away at a specified distance from Michelle and the children, inclusive of
their present residence and other places they frequent; and (2) to desist from calling or otherwise
communicating with Michelle.
(2) On April 14, 2008, Juan Ignacio filed in Civil Case No. M-6543 a “Motion to Dismiss [Petition] with
Prayer to Lift [TPO]”19 anchored on several grounds, foremost of which are the following: (a) litis
pendentia, Juan Ignacio noting in this regard that the Makati RTC is competent to grant in its SP PROC. Case
No. M-6543 the very same reliefs Michelle seeks in Civil Case No. M-6543, pursuant to Sections 17 and 18 of
the Rule on Custody of Minors;20 (b) in view of item (a) above, the Makati RTC, having first assumed
jurisdiction over identical subject matters, issues and parties, does so to the exclusion of the Muntinlupa
RTC; and (c) Michelle’s act of filing her petition for protection order before the Muntinlupa RTC constitutes,
under the premises, forum shopping, a practice proscribed owing to the possibility of different courts
arriving at conflicting decisions. Juan Ignacio would in fact stress that the TPO thus issued by the Muntinlupa
RTC directing him to stay at least a kilometer away from his children already conflicted with the Makati RTC-
issued provisional orders granting him visitation rights over them.
(3) By Order of May 12, 2008, the Muntinlupa RTC, conceding the exclusionary effect of the assumption at
the first instance by the Makati RTC of jurisdiction on the issue of custody on Ava and Ara and the likelihood
of the issuance by either court of clashing decisions, partially granted Juan Ignacio’s motion to dismiss and
accordingly modified the TPO issued on March 31, 2008. As thus modified, the protection order, or to be
precise, the reliefs provided in favor of Michelle in said TPO shall exclude from its coverage the orders issued
by the Makati RTC in the exercise of its jurisdiction on the pending custody case.
In another Order of June 30, 2008, the Muntinlupa RTC denied Juan Ignacio’s Motion for Reconsideration of
the earlier May 12, 2008 Order on the ground that such a motion is a prohibited pleading. 21 cralawlibrary
(4) Meanwhile, Michelle, in connection with certain orders of the Makati RTC in the custody case, denying
her motion to admit answer and its jurisdictional issue pronouncements, went to the CA on certiorari via a
petition docketed as CA-G.R. SP No. 103392.
On August 28, 2008, in CA-G.R. SP No. 103392, the CA rendered a judgment finding partly for Michelle,
as petitioner, it being the appellate court’s determination that the substituted service of summons upon her
in the custody suit was defective and irregular. Accordingly, the period within which Michelle was to file an
answer, so the CA declared, did not start to run and, hence, the denial by the Makati RTC of her motion to
admit answer in the custody case and corollarily, its holding that she is in default, by virtue of its Orders
dated January 21, 2008 and March 7, 2008, were unwarranted and ought to be nullified. Neither of the
parties appealed the foregoing Decision. The CA Decision, thus, became final. The fallo of the said CA
Decision reads: chanroblesvirtualawlibrary
WHEREFORE, the foregoing considered, the instant petition is hereby PARTLY GRANTED. Accordingly, the
assailed Orders of 21 January 2008 and 7 March 2008 are REVERSED and SET ASIDE while the Orders of
29 February 2008 and 31 March 2008, in so far as the denial of petitioner’s Motion for Inhibition is
concerned, are AFFIRMED. No costs.
SO ORDERED.22
Partly, the CA wrote: chanroblesvirtualawlibrary
x x x [T]he pivotal issue x x x is whether the [Makati RTC] had acquired jurisdiction over the person of the
petitioner, and if so, whether the disposition of the respondent [Makati RTC] judge in declaring her in default
has factual and legal basis. Admittedly, the summons and the copy of the petition were not personally
served upon the petitioner as explicitly required under Section 5 of A.M. No. 03-04-04-SC x x x.
Indeed, the records would show that the summons and the petition were served upon the petitioner x x x by
substituted service as they were received by x x x a certain Nilo Santos at said Anonas residence, an
address belatedly supplied by private respondent himself. However, x x x petitioner had actually been
informed of such substituted service sometime in the second week of December 2007 and that she had
opted to simply disregard the same since she had thought that such service is invalid x x x.
Despite the fact that she had known of the existence of the petition a quo and the fact that the service of
summons had been made upon her by substituted service, petitioner made a decision whether it be an
informed one or not, not to move for its dismissal on the ground of lack of jurisdiction over her person x x x.
It was only upon the issuance of the Provisional Order that she had opted to participate in the proceeding by
filing her responsive pleading to the petition. Unfortunately though, the respondent [Makati RTC] judge
denied her motion to admit and declared her in default on the basis of its disquisition that the failure of the
petitioner to file her responsive pleading is not due to excusable negligence or other circumstances beyond
her control.
Still and all, it cannot be denied that the trial court, previous to or at the time the petitioner had filed her
responsive pleading, has yet to acquire jurisdiction over the person of the latter. The Rule on Custody of
Minors specifically requires that service of summons be made personally on the respondent and
yet the trial court served the same upon the person of the petitioner by substituted service without proof of
exhaustion of means to personally serve the same or the impossibility thereof to warrant the extraordinary
method of substituted service.
Surely, while the Rule on Custody of Minors provides that the Rules of Court shall apply suppletorily in
custody proceedings, the express provision requiring personal service and the very nature of custody cases
should have caused the respondent judge x x x to adhere to the evident intention of the rules, that is to
have both parties in a custody case participate therein.
Regrettably, the respondent judge, relying on the Officer’s Return x x x, precipitately declared x x x that the
trial court had already acquired jurisdiction over the person of the petitioner. x x x
Sadly though, respondent judge, in grave abuse of discretion, assumed jurisdiction over the person of the
petitioner and proceeded to act on the petition. Worse, x x x the respondent judge denied the motion to
admit filed by the petitioner and declared the latter in default. While the petitioner had already
submitted herself to the jurisdiction of the trial court by way of her voluntary act of filing a responsive
pleading to the petition a quo, the period to file said responsive pleading, as already stated, in so far as the
petitioner is concerned has yet to commence, and thus, the filing of her motion to admit answer cannot
plausibly be considered as to have been filed beyond the reglementary period. In this light, the denial of
said motion and the issuance of the default order are unwarranted and are reversible errors of jurisdiction x
x x.23 (Emphasis added.)
(5) From the adverse May 12, 2008 and June 30, 2008 Orders of the Muntinlupa RTC in Civil Case No. M-
6543, Juan Ignacio also repaired to the CA on a petition for certiorari. Docketed as CA-G.R. SP. No.
105442, the petition prayed that the Muntinlupa RTC be enjoined from further taking cognizance of
Michelle’s protection order petition as the said case will infringe or intrude upon the Makati RTC’s disposition
of the custody case.24cralawlibrary
Michelle opposed and sought the dismissal of the certiorari petition on the ground that it is a prohibited
pleading under Sec. 22(j) of RA 9262.
Eventually, the CA issued, on May 11, 2009, the assailed Decision which, on one hand, found Michelle guilty
of forum shopping, a sufficient cause for summary dismissal of a case, but viewed, on the other, Juan
Ignacio’s petition for certiorari as a prohibited pleading which, ordinarily, would then render it dismissible. In
the veritable clash under the premises of the effects of forum shopping and the rule on prohibited pleading,
the CA nonetheless ruled for Juan Ignacio, as petitioner, pertinently disposing as follows: chanroblesvirtualawlibrary
ACCORDINGLY, the petition is GIVEN DUE COURSE. Civil Case No. 08-023 is ORDERED
DISMISSED and all issuances made by [RTC], Branch 207, Muntinlupa City, are declared void. The [RTC]
Branch 60, Makati City is DIRECTED to proceed with the case with dispatch.25
The CA extricated itself from the foregoing legal bind on the basis of the following ratiocination and the
plausible suppositions interjected thereat: chanroblesvirtualawlibrary
In resolving the present petition, the Court had to consider two (2) things. First, pursuant to Section 22 (j)
of A.M. No. 04-10-11-SC, a petition for certiorari against any interlocutory order issued by a family court is
a prohibited pleading. Accordingly, if this Court were to strictly follow [said] Section 22 (j) x x x, then the
present petition for certiorari must be dismissed. Second, the Private Respondent had first moved that the
Makati RTC issue a TPO and that when her motion was denied, she filed a petition before the Muntinlupa
RTC asking that the said court issue a TPO. In short, the Private Respondent committed forum-shopping.
And when forum-shopping is committed, the case(s) must be dismissed with prejudice.
Thus, it falls upon this Court to balance the conflict.
This Court notes that the Muntinlupa RTC tried to balance out the conflicting jurisdictional issues with the
Makati RTC by stating in its first assailed Order that the reliefs provided in favor of [herein private
respondent] in the [TPO] x x x are modified, to exclude from its coverage those Orders issued by
the Makati Court in the exercise of its jurisdiction on the pending custody case. Be that as it may,
the Muntinlupa RTC itself recognized the jurisdiction of the Makati RTC and that the case before it would, in
fact, impinge upon the jurisdiction of the latter court when it stated that the disposition on the matter by
this Court may result in the possibility of conflicting decisions/orders. In short, the Muntinlupa
RTC itself acknowledges the fact that any future issuances, including its eventual decision on the
petition before it, would affect the custody case pending before the Makati RTC and might even
result to conflicting decisions. Thus, in the interest of judicial stability, it is incumbent upon this Court to
ensure that this eventuality will not come to pass.
xxxx
To test the argument that a petition for certiorari is an absolutely prohibited pleading, let us push the
present case to its logical extreme.
What if a woman claiming to be a battered wife leaves one of her children with her parents and another with
a sibling of hers? She then went to another place, transferred residency, and filed a petition for TPO. Her
parents [and sibling], who reside in another locality, likewise files a petition for TPO in behalf of the
grandchild [and nephew/niece entrusted] in their custody. x x x What if the family courts refuse
consolidation? Is the man devoid of any remedy and would have to spend his time shuttling between three
(3) localities since a petition for certiorari is a prohibited pleading?
What if the woman went to another locality purposely in order to find a friendly venue x x x? Again, if we
are to strictly construe Section 22 (j) of A.M. No. 04-10-11-SC that man would just have to bear the
consequences since he cannot seek the extraordinary writ of certiorari. Or, what if both of the spouses do
not reside within the court’s jurisdiction, but the judge refuses to grant a motion to dismiss due to his zeal?
What remedy would a man have since he cannot resort to a petition for certiorari?
The rules are not sacrosanct. If they go in the way of the smooth and orderly administration of justice, then
magistrates should apply their best judgment. If not, courts would be so hideously bound or captives to the
stern and literal provisions of the law that they themselves would, wittingly or otherwise, become
administrators of injustice.
On the one hand, this Court hereby notes that Private Respondent herself recognizes the
jurisdiction of the Makati RTC to issue a TPO. It was only after the Makati RTC denied her prayer
for a TPO when she filed a petition before the Muntinlupa RTC asking for the issuance of a TPO. It
is thus highly disturbing that the Private Respondent sought another forum in order to try to obtain a
favorable judgment. Thus, as aptly pointed out by the Petitioner, some sort of forum-shopping was
committed.
On the other hand, if the Court were to dismiss the present petition on the ground that a petition for
certiorari is a prohibited pleading, it would have to close its eyes to the fact that the Private Respondent
wilfully committed forum-shopping. To dismiss the present petition would, in effect, “reward” her for this
negative act. This, the Court cannot countenance.
xxxx
Accordingly, x x x Civil Case No. 08-023 must not be allowed to proceed any further. Imperatively, to
ensure that the jurisdiction of the Makati RTC remains unshackled, all of the issuances of the Muntinlupa
RTC should, by all means, be nullified.26 (Emphasis added.)
The CA denied Michelle’s motion for reconsideration per its equally assailed Resolution of December 28,
2009.
Aggrieved, Michelle, for herself and for her minor daughters, filed the instant recourse, her submissions
revolving on the twin issues of forum shopping and the prohibition under Sec. 22 of the Rule on Violence
Against Women and Children27 against the filing of petitions for certiorari to defeat TPOs issued to promote
the protection of victims of violence against women and their children.
Michelle presently argues that the assailed Decision of the CA is based on an erroneous appreciation of the
facts of the case. To her, there was no forum shopping when she filed her Petition for Protection Order in the
Muntinlupa RTC while the custody case was pending in the Makati RTC. Her stated reason: the absence in
both cases of identity of parties and rights asserted, on top of which the reliefs sought and prayed for are
different and not founded on the same set of facts.
To downplay the application of the litis pendentia principle, she argues that it was impossible for her to
apply for and secure a protective order under RA 9262 in the custody case before the Makati RTC
being, first, a respondent, not a petitioner in the Makati case; and second, the venue for an application for
protection order is, under RA 9262, the place where the woman or the offended party resides, which in her
case is Muntinlupa.28cralawlibrary
Michelle would invite attention to her having withdrawn her motion for protective order in the custody case
before the Makati RTC before she filed her Petition for Protective Order with the Muntinlupa RTC.
Additionally, she points to the CA’s Decision of August 28, 2008 in CA-G.R. SP No. 103392 (2008 CA
Decision), which held that the Makati RTC did not acquire jurisdiction over her so that all issuances of the
Makati RTC were void. All these, Michelle claims, argue against the existence of litis pendentia.
The Issue
The issue to be resolved in this case is whether or not petitioner, in filing her Petition for Protection Order
before the Muntinlupa RTC, violated the rule on forum shopping, given the pendency of the respondent’s
Petition for Custody before the Makati RTC and considering incidentally that she filed said petition for
protection order after the Makati RTC had denied her application for protection order in the custody case.
The Court’s Ruling
Before anything else, however, the Court wishes to point out disturbing developments in this proceeding
which ought not to be swept under the rug on the simplistic pretext that they may not be determinative of
the outcome of this case. But first, some basic premises on record.
First, as correctly stated in this petition, Michelle withdrew her Ex Parte Motion for Issuance of Protective
Order in the custody case prior to her filing of her Petition for Protection Order with the Muntinlupa RTC. It
should be made clear, however, that she filed said motion to withdraw on January 21, 2008, or afterthe
Makati RTC, in its Order dated January 4, 2008, had, for all intents and purposes, denied the said ex
parte motion. To recapitulate, the Makati RTC judge made it of record that she was not inclined to issue a
protective order in favor of a person, i.e., petitioner Michelle, who has not bothered to appear in court, even
assuming, she adds, that the person against whom the protection order is directed, i.e., Juan Ignacio, is
prone to violence, a drug user and a womanizer.
Second, there is absolutely nothing in the 2008 CA Decision declaring that all issuances of the Makati RTC
were void. In order to bolster her position that the rule against forum shopping was not breached in this
case, Michelle matter-of-factly alleged in this recourse that since in the 2008 CA Decision it was ruled that
the Makati RTC did not acquire jurisdiction over her person due to the irregularity in the service of
summons, then “all the issuances or orders of [the Makati RTC in the custody case] were void;” 29 and
“[t]herefore, there was no litis pendentia to begin with since the RTC of Makati City Branch 60 had no
jurisdiction from the start.”30 cralawlibrary
For perspective, the 2008 CA Decision did not rule that the Makati RTC did not acquire jurisdiction over
Michelle. Quite the contrary. As a matter of record, the CA in that disposition found and thus declared
Michelle to have voluntarily submitted herself to the jurisdiction of the Makati RTC when she filed her
Answer in SP. PROC. Case No. 6543 on January 2, 2008. But to be precise about things, the CA in that 2008
Decision found, as having been tainted with of grave abuse of discretion, only that part of the Makati RTC’s
disposition denying Michelle’s motion to admit answer for belated filing and the consequent default order.
Along this line, the CA merely nullified the Makati RTC’s Orders dated January 21, 2008 and March 7, 2008
which declared Michelle in default and denied her motion for reconsideration, respectively. The ensuing
excerpts of the 2008 CA Decision speak for themselves: chanroblesvirtualawlibrary
Sadly though, respondent judge, in grave abuse of discretion, assumed jurisdiction over the person of the
petitioner and proceeded to act on the petition. Worse, without due regard to the plain intention of the rule
in ensuring the adjudication of the controversy surrounding a custody case based on its merits, the
respondent judge denied the motion to admit filed by the petitioner and declared the latter in default. While
the petitioner had already submitted herself to the jurisdiction of the trial court by way of her
voluntary act of filing a responsive pleading to the petition a quo, the period to file said
responsive pleading, as already stated, in so far as the petitioner is concerned has yet to
commence, and thus, the filing of her motion to admit answer cannot plausibly be considered as
to have been filed beyond the reglementary period. In this light, the denial of said motion and
the issuance of the default order are unwarranted and are reversible errors of jurisdiction,
therefore correctible by a writ of certiorari. (Emphasis supplied.)
xxxx
WHEREFORE, the foregoing considered, the instant petition is hereby PARTLY GRANTED. Accordingly, the
assailed Orders of 21 January 2008 and 7 March 2008 are REVERSED and SET ASIDE while the Orders of
29 February 2008 and 31 March 2008, in so far as the denial of petitioner’s Motion for Inhibition is
concerned, are AFFIRMED. No costs.
SO ORDERED.31
Withal, the Court finds it downright offensive and utterly distasteful that petitioner raised the following as
one of the issues in this appellate proceeding: chanroblesvirtualawlibrary
Whether or not the petitioners are guilty of forum-shopping when the Petition for Custody of private
respondent Araneta was dismissed by the Court of Appeals on the ground that the RTC of Makati City
Branch 60 did not acquire jurisdiction because the summons was not served personally upon herein
Petitioner Michelle Lana Brown Araneta.32 (Emphasis supplied.)
Petitioner’s above posture smacks of bad faith, taken doubtless to deceive and mislead the Court. Indeed,
nothing in either the body or the fallo of the 2008 CA Decision would yield the conclusion that the petition
for custody is being dismissed, as petitioner unabashedly would have the Court believe.
Was there forum shopping? Did petitioner forum shop?
A circumstance of forum shopping occurs when, as a result or in anticipation of an adverse decision in one
forum, a party seeks a favorable opinion in another forum through means other than appeal or certiorari by
raising identical causes of action, subject matter and issues. Stated a bit differently, forum shopping is the
institution of two or more actions involving the same parties for the same cause of action, either
simultaneously or successively, on the supposition that one or the other court would come out with a
favorable disposition.33 An indicium of the presence of, or the test for determining whether a litigant violated
the rule against, forum shopping is where the elements of litis pendentia are present or where a final
judgment in one case will amount to res judicata in the other case.34 cralawlibrary
Litis pendentia,35 as a ground for the dismissal of a civil suit, refers to that situation wherein another action
is pending between the same parties for the same cause of action, such that the second action becomes
vexatious and unnecessary.36 For the bar of litis pendentia to be invoked, the concurring requisites must be
present: (1) identity of parties, or at least such parties as represent the same interests in both actions; (2)
identity of rights asserted and relief prayed for, the relief being founded on the same facts; and (3) the
identity of the two preceding particulars is such that any judgment rendered in the pending case, regardless
of which party is successful would amount to res judicata in the other.37 cralawlibrary
Thus, it has been held that there is forum shopping (1) whenever as a result of an adverse decision in one
forum, a party seeks a favorable decision (other than by appeal or certiorari) in another; or (2) if, after he
has filed a petition before the Supreme Court, a party files another before the CA since in such case said
party deliberately splits appeals “in the hope that even as one case in which a particular remedy is sought is
dismissed, another case (offering a similar remedy) would still be open”; or (3) where a party attempts to
obtain a preliminary injunction in another court after failing to obtain it from the original court. 38 cralawlibrary
The evil sought to be avoided by the rule against forum shopping is the rendition by two competent tribunals
of two separate and contradictory decisions. Unscrupulous party litigants, taking advantage of a variety of
competent tribunals, may repeatedly try their luck in several different fora until a favorable result is
reached. To avoid the resultant confusion, the Court adheres to the rules against forum shopping, and a
breach of these rules results in the dismissal of the case. 39 cralawlibrary
Considering the above doctrinal pronouncements on forum shopping, We find all the badges of this
deplorable, docket-clogging practice present in this case.
As a result or in anticipation of an adverse ruling of the Makati RTC, petitioner sought the
favorable opinion of the Muntinlupa RTC
As discussed above, the presiding judge of the Makati RTC, in the custody case, made of record that she
was not inclined to issue a protection order in favor of Michelle because she did not bother to appear in
Court and that the allegations against Juan Ignacio cannot, per se, prevent him from exercising visitation
rights over his children. After this adverse ruling, Michelle sought the favorable opinion of the Muntinlupa
RTC by filing an independent Petition for Protection Order.
The cases have identical parties
Clearly, the Petition for Custody and the Petition for Protection Order have the same parties who represent
the same interests. The fact that Ava and Ara, who are parties in the Petition for Protection Order, are not
impleaded in the Petition for Custody is of no moment because they are precisely the very subjects of the
Petition for Custody and their respective rights are represented by their mother, Michelle. In a long line of
cases on forum shopping, the Court has held that absolute identity of the parties is not required, it being
enough that there is substantial identity of the parties40 or at least such parties represent the same interests
in both actions. It does not matter, as here, that in the Petition for Custody, Juan Ignacio is the petitioner
and Michelle is the respondent while in the Petition for Protection Order, their roles are reversed. That a
party is the petitioner in one case and at the same time, the respondent in the other case does not, without
more, remove the said cases from the ambit of the rules on forum shopping. So did the Court hold, for
example in First Philippine International Bank v. Court of Appeals, that forum shopping exists even in cases
like this where petitioners or plaintiffs in one case were impleaded as respondents or defendants in
another.41 Moreover, this Court has constantly held that the fact that the positions of the parties are
reversed, i.e., the plaintiffs in the first case are the defendants in the second case or vice versa, does not
negate the identity of parties for purposes of determining whether the case is dismissible on the ground
of litis pendentia.42
cralawlibrary
The rights asserted and reliefs prayed for are based on the same facts
Further, the rights asserted and reliefs prayed for in Civil Case No. 08-023 are practically based on the same
facts and are so intertwined with that in SP. PROC. Case No. 6543, such that any judgment rendered in the
pending cases, regardless of which party is successful, will amount to res judicata.
In the custody case, Juan Ignacio mainly asserted his right, as father, to visit his children and enjoy joint
custody over them. He prayed for a judgment granting him joint custody, or alternatively, permanent
visitation rights over Ava and Ara.
In disposing of the custody case, the Makati RTC is expected, following the rationale behind the issuance of
the Rule on Custody of Minors, to consider, among others, the best interest of the children, 43 any threat or
danger of physical, mental, sexual or emotional violence which endangers their safety and best interest,
their health, safety and welfare,44 any history of child or spousal abuse by the person seeking
custody,45 habitual use of alcohol, dangerous drugs or regulated substances, 46 marital misconduct,47and the
most suitable physical, emotional, spiritual, psychological and educational environment for the holistic
development and growth of the minor.48 cralawlibrary
Michelle’s answer and motion for issuance of protection order in the custody case contained allegations of
psychological, sexual, emotional and economic abuse she and her children suffered at the hands of Juan
Ignacio to defeat his asserted right to have joint custody over Ava and Ara and as argument that the grant
of visitation rights in his favor will not be in the best interest of the children. These allegations of abuse were
in substance the very same ones she made in her Petition for Protection Order.
Juan Ignacio’s rights and reliefs prayed for are dependent on and, to be sure, would be predicated on the
question of whether or not granting him the desired custody or at least visitations rights over the children
are in their best interest. In deciding this issue, the Makati RTC will definitely have to reckon with and make
a finding on Michelle’s allegations of psychological, sexual, emotional and economic abuse.
Similarly, the Muntinlupa RTC must necessarily consider and make a determination based on the very same
facts and allegations on whether or not Michelle shall be entitled to the relief she prayed for in her own
petition, in particular, a permanent protection order against Juan Ignacio.
Elements of litis pendentia are present and any judgment in the pending cases would amount
to res judicata
Any judgment rendered in the pending cases, regardless of which party is successful, would amount to res
judicata. Consider: If the Makati RTC were to grant Juan Ignacio’s petition for custody, this would
necessarily mean that it would be in the best interest of the children if he were allowed to visit and spend
time with them and that granting Juan Ignacio visitation rights would not pose any danger or threat to the
children.
On the other hand, a grant by the Muntinlupa RTC of Michelle’s prayer for a permanent protection order
would presuppose at the minimum that it would be to the children’s best interest if Juan Ignacio is directed
to keep away from them, necessary implying that he is unfit even to visit Ara and Ava. Conversely, if Juan
Ignacio’s Petition for Custody were denied, then it would mean that the Makati RTC gave weight and
credence to Michelle’s allegations of abuse and found them to be in the best interest of the children to bar
Juan Ignacio from visiting them. Thus, the Muntinlupa RTC should have no ground to deny Michelle’s Petition
for Protection Order pending before it.
The evil sought to be avoided by the rule against forum shopping is present in this case
The grave mischief sought to be avoided by the rule against forum shopping, i.e., the rendition by two
competent tribunals of two separate and contradictory decisions, is well-nigh palpable in this case. If the
Muntinlupa RTC were to rule that Michelle was entitled to a Protection Order, this would necessarily conflict
with any order or decision from the Makati RTC granting Juan Ignacio visitation rights over Ava and Ara. As
aptly pointed out by Juan Ignacio in his Comment such a conflict had already occurred, as the TPO issued by
the Muntinlupa RTC actually conflicted with the Orders issued by the Makati RTC granting Juan Ignacio
temporary visitation rights over his children. There now exists an Order from the Muntinlupa RTC which,
among others, directed Juan Ignacio to stay at least one (1) kilometer away from Ava and Ara, even as the
Makati RTC recognized, in two (2) separate Orders, that he had the right, albeit temporarily to see his
children.49
cralawlibrary
In fact, Michelle was very much aware of the possible conflicts between the orders of Makati RTC and
Muntinlupa RTC. In her Opposition (to Urgent Motion for Immediate Enforcement of Visitation Orders dated
December 21, 2007 and January 4, 2008), she recognized that the granting of visitation rights in favor of
Juan Ignacio would conflict the TPO and, therefore, the Makati Court would be rendering a conflicting
decision with that of the Muntinlupa RTC, viz: chanroblesvirtualawlibrary
x x x There is therefore, no conflict of jurisdiction in this case but since the petitioner filed a Petition for
Certiorari in the Court of Appeals, which includes the issue of custody, we submit that the matter of
custody pendente lite including visitation, should not and can not be resolved by this Honorable
Court without conflicting with the Temporary Protection Order of a co-equal court, the RTC of
Muntinlupa City. x x x
xxxx
If the petitioner is granted visitation rights, the Honorable Court, with due respect would be allowing him to
violate the TPO against him; the Honorable Court would then be rendering a conflicting
decision.50 (Emphasis supplied.)
No less than the Muntinlupa RTC itself recognized the resulting aberration of its orders conflicting with
that/those of the Makati RTC. As it were, the former, in its Order of May 12, 2008, resolving Juan Ignacio’s
Motion to Dismiss with Prayer to Lift Temporary Protection Order, categorically stated that there may be
orders in the protection order case that would possibly conflict with the orders issued by the Makati RTC in
the custody case. So it was that to address these possible conflicts, the Muntinlupa RTC partially granted
Juan Ignacio’s Motion to Dismiss by modifying the reliefs provided under the TPO by excluding from its
coverage those orders issued by the Makati RTC in the exercise of its jurisdiction over the custody case.
Pursuant to the foregoing Order of the Muntinlupa RTC, the December 21, 2007 and January 4, 2008 Orders
of the Makati RTC, granting Juan Ignacio visitation rights on Christmas Day and New Year’s Day and one (1)
Saturday and Sunday in January 2008, are not covered by the reliefs under the TPO. Hence, despite the
TPO directing Juan Ignacio to stay at least one (1) kilometer away from Ava and Ara, Juan Ignacio would
still have the right to see his children by virtue of the orders issued by the Makati RTC granting him
temporary visitation rights. The said Muntinlupa RTC Order reads: chanroblesvirtualawlibrary
Based on the pleadings filed, this (Muntinlupa) Court holds that since the Makati Court first acquired
jurisdiction over the issue of custody, the latter continues to exercise it, so that any disposition on the
matter by this Court may result in the possibility of conflicting decisions/orders.
Wherefore, this Court partially grants respondent’s Motion to Dismiss insofar as those matters covered by
A.M. No. 03-04-04-SC, Rule on Custody of Minors and Writ of Habeas corpus in Relation to Custody of
Minors are concerned, which are within the jurisdiction of the Makati Court, but continues to take cognizance
on matters not included therein (A.M. No. 03-04-04-SC) but within the protective mantle of R.A. No. 9262.
Consequently, the reliefs provided in favor of the petitioner in the Temporary Protection Order dated March
31, 2008 are modified, to exclude from its coverage those Orders issued by the Makati Court in the exercise
of its jurisdiction on the pending custody case.
The motions to lift the temporary protection order (except on those matter stated above) and to cite
petitioner in contempt of court are denied for lack of merit. 51 (Emphasis supplied.)
Verily, the Muntinlupa RTC was aware that its issuances and its eventual final disposition on the Petition for
Protection Order would affect the custody case before the Makati RTC, if not totally clash with the latter
court’s decision. We agree with the CA’s ensuing observation: chanroblesvirtualawlibrary
This Court notes that the Muntinlupa RTC tried to balance out the conflicting jurisdictional issues with the
Makati RTC by stating in its first assailed Order that the reliefs provided in favor of [herein private
respondent] in the [TPO] dated March 31, 2008 are modified, to exclude from its coverage those
Orders issued by the Makati Court in the exercise of its jurisdiction on the pending custody case.
Be that as it may, the Muntinlupa RTC itself recognized the jurisdiction of the Makati RTC and that the case
before it would, in fact, impinge upon the jurisdiction of the latter court when it stated that the disposition
on the matter by this Court may result in the possibility of conflicting decisions/orders. In
short, the Muntinlupa RTC itself acknowledges the fact that any future issuances, including its
eventual decision on the petition before it, would affect the custody case pending before the
Makati RTC and might even result to conflicting decisions. Thus, in the interest of judicial stablility, it
is incumbent upon this Court to ensure that this eventuality will not come to pass. 52
Civil Case No. 08-023 should, thus, be dismissed with prejudice for being a clear case of forum shopping.
WHEREFORE, premises considered, the appealed May 11, 2009 Decision and the December 28, 2009
Resolution of the Court of Appeals in CA-G.R. SP. No. 105442, particularly insofar as these ordered the
dismissal of subject Civil Case No. 08-023 and the nullification of the orders made in that case, are
hereby AFFIRMED.
G.R. No. 173331 December 11, 2013
FLORPINA BENAVIDEZ, Petitioner,

vs.
NESTOR SALVADOR, Respondent.
DECISION
MENDOZA, J.:
This is a petition for review on certiorari assailing the November 22, 2005 Decision and the June 8,
1
2006 Amended Decision of the Court of Appeals (CA). in CA-G.R. CV No. 73487, which affirmed
2
and modified the June 1, 2001 Decision of the Regional Trial Court. Branch 74, Anti polo City (RTC-
3
Antipolo) in Civil Case No. 00-5660.
The Facts:
Sometime in February 1998, pet1t1oner Florpina Benavidez (Benavidez) approached and asked
respondent Nestor Salvador (Salvador) for a loan that she would use to repurchase her property in
Tanay, Rizal which was foreclosed by the Farmers Savings and Loan Bank, Inc. (Farmers Savings).
After inspecting the said property, Salvador agreed to lend the money subject to certain conditions.
To secure the loan, Benavidez was required to execute a real estate mortgage, a promissory note
and a deed of sale. She was also required to submit a special power of attorney (SPA) executed and
signed by Benavidez’s daughter, Florence B. Baning (Baning), whom she named as the vendee in
the deed of absolute sale of the repurchased property. In the SPA, Baning would authorize her
mother to obtain a loan and to constitute the said property as security of her indebtedness to
Salvador.
Pursuant to the agreement, Salvador issued a manager’s check in favor of Benavidez in the amount
of One Million Pesos (₱1,000,000.00) and released Five Hundred Thousand Pesos (₱500,000.00) in
cash. For the loan obtained, Benavidez executed a promissory note, dated March 11, 1998.
Benavidez, however, failed to deliver the required SPA. She also defaulted in her obligation under
the promissory note. All the postdated checks which she had issued to pay for the interests were
dishonored. This development prompted Salvador to send a demand letter with a corresponding
statement of account, dated January 11, 2000. Unfortunately, the demand fell on deaf ears which
constrained Salvador to file a complaint for sum of money with damages with prayer for issuance of
preliminary attachment.
On May 4, 2000, Benavidez filed a motion to dismiss on the ground of litis pendentia. She averred
that prior to the filing of the case before the RTC-Antipolo, she had filed a Complaint for Collection
for Sum of Money, Annulment of Contract and Checks with Prayer for Preliminary Injunction and
Temporary Restraining Order against Salvador; his counsel, Atty. Nepthalie Segarra; Almar
Danguilan; and Cris Marcelino, before the Regional Trial Court, Branch 80, Morong, Rizal (RTC-
Morong). The motion to dismiss, however, was denied by RTC-Antipolo on July 31, 2000. On
September 15, 2000, Benavidez filed her answer with counterclaim. A pre-trial conference was
scheduled on May 2, 2001 but she and her counsel failed to appear despite due notice. Resultantly,
upon motion, Salvador was allowed by the trial court to present evidence ex parte.
On June 1, 2001, RTC-Antipolo decided the subject case for Salvador. It found that indeed
Benavidez obtained a loan from Salvador in the amount of ₱1,500,000.00. It also noted that up to
the time of the rendition of the judgment, she had failed to settle her obligation despite having
received oral and written demands from Salvador. Also, the trial court pointed out that the evidence
had shown that as of January 11, 2000, Benavidez’s obligation had already reached the total amount
of ₱4,810,703.21. Thus, the fallo of the said decision reads:
4
WHEREFORE, in view of the foregoing premises, defendant is hereby directed to pay plaintiff the
following:
1. The amount of ₱4,810,703.21, covering the period from June 11, 1998 to January 11,
2000, exclusive of interest and penalty charges until the said amount is fully paid;
2. The amount of ₱50,000.00 as exemplary damages;
3. The sum of 25% of the total obligation as and by way of attorney’s fees; and,
4. Cost of suit.
SO ORDERED. 5
Benavidez filed a motion for reconsideration but unfortunately for her, RTC-Antipolo, in its August 10,
2001 Order, denied her motion for lack of merit.
6
Frustrated, Benavidez appealed the June 1, 2001 Decision and the August 10, 2001 Order of RTC-
Antipolo to the CA. She argued, in chief, that early on, the trial court should have dismissed the
complaint for collection of sum of money filed by Salvador on grounds of litis pendentia and
erroneous certification against forum shopping. She claimed that prior to the filing of the said
complaint against her, she had already filed a complaint for the annulment of the promissory note
evidencing her obligation against Salvador. According to her, there was substantial identity in the
causes of action and any result of her complaint for annulment would necessarily affect the
complaint for collection of sum of money filed against her. She added that Salvador never informed
RTC-Antipolo about the pending case before RTC-Morong, rendering his certification on forum
shopping erroneous. 7
Benavidez also argued that RTC-Antipolo erred in refusing to re-open the case for pre-trial
conference and disallowing her to present evidence. She added that the absence of her counsel on
the scheduled pre-trial conference caused her substantial prejudice. Though she was not unmindful
of the general rule that a client was bound by the mistake or negligence of her counsel, she insisted
that since the incompetence or ignorance of her counsel was so great and the error committed was
so serious as it prejudiced her and denied her day in court, the litigation should have been reopened
to give her the opportunity to present her case.8
The CA was not moved.
The CA reasoned out that RTC-Antipolo did not err in allowing Salvador to present his evidence ex-
parte in accordance with Section 5, Rule 18 of the 1997 Rules of Court. Benavidez and her counsel
9
failed to show a valid reason for their non-appearance at the pre-trial and so their absence was not
excusable. Her counsel’s negligence, as Benavidez cited, was not among the grounds for new trial
or reconsideration as required under Section 1, Rule 37 of the Rules of Civil Procedure. The CA
emphasized that well-entrenched was the rule that negligence of counsel bound his client. She was
bound by the action of his counsel in the conduct of the trial. The appellate court also took note that
she herself was guilty of negligence because she was also absent during the pre-trial despite due
notice. Thus, Benavidez’s position that the trial court should have reopened the case was
untenable. 10
With regards to the grounds of litis pendentia and forum shopping cited by Benavidez, the CA wrote
that there was no identity of the rights asserted in the cases filed before RTC-Morong and RTC-
Antipolo. The reliefs prayed for in those cases were different. One case was for the annulment of the
promissory note while the other one was a complaint for sum of money. There could be identity of
the parties, but all the other requisites to warrant the dismissal of the case on the ground of litis
pendentia were wanting. Thus, on November 22, 2005, the CA affirmed in toto the decision of RTC-
11
Antipolo.12
Feeling aggrieved by the affirmance, Benavidez filed a motion for reconsideration on the ground that
the same was contrary to law and jurisprudence; that litis pendentia existed which resultantly made
his certification on non-forum shopping untruthful; and, that her absence during the pre-trial was
justified.
On June 08, 2006, the CA issued the Amended Decision, holding that the motion was partly
meritorious. Accordingly, it modified its earlier decision by deleting the award of exemplary damages
and attorney’s fees because the award thereof was not supported by any factual, legal and equitable
justification. Thus, the decretal portion of the Amended Decision reads:
WHEREFORE, the motion for reconsideration is PARTIALLY GRANTED. The Decision dated
November 22, 2005 is MODIFIED by DELETING the award of exemplary damages and attorney’s
fees.
SO ORDERED. 13
Still unsatisfied, Benavidez comes before the Court via a petition for review under Rule 45 of the
Rules of Court, raising the following issues:
14
1. Whether or not the present case is barred by Civil Case No. 00-05660 which is
pending before the RTC-Morong, Rizal.
2. Whether or not the case is dismissible because the certification against forum
shopping was defective.
3. Whether or not the executed promissory note is void for being unconscionable and
shocking to the conscience.
4. Whether or not the CA erred in holding that the order allowing respondent to
present evidence ex-parte and submitting the case for decision is valid despite the
fact that default judgment is looked upon with disfavor by this Court.
In fine, the core issue is whether or not the present case should have been dismissed on the ground
of litis pendentia.
Benavidez argues that the outcome of the case, before RTC-Morong, where the annulment of the
promissory note was sought, would have been determinative of the subject case before RTC-
Antipolo where the enforcement of the promissory note was sought. If RTC-Morong would rule that
the promissory note was null and void, then the case with RTC-Antipolo would have no more leg to
stand on. He concludes that the requisites of litis pendentia were indeed present: first, both
Benavidez and Salvador were parties to both complaints; second, both complaints were concerned
with the promissory note; and third, the judgment in either of the said complaints would have been
determinative of the other.
15
Benavidez further claims that the case should have been dismissed because the certification on
forum shopping which accompanied Salvador’s complaint was defective. He declared therein that he
was not aware of any pending case before any court similar to the one he was filing, when in truth
and in fact, there was one. This fact could not be denied because summons in the case before RTC-
Morong was served on him and he even filed his answer to the said complaint. 16
Benavidez also pushes the argument that RTC-Antipolo committed an error of law when it allowed
Salvador to present evidence ex-parte and eventually decided the case without waiting to hear her
side. The trial court should have been more lenient. If there was any one to be blamed for her
predicament, it should have been his counsel, Atty. Rogelio Jakosalem (Jakosalem). His counsel
was negligent in his duties when he did not bother to file the necessary pre-trial brief and did not
even appear at the pre-trial conference. He did not assist her either in filing a motion for
reconsideration. Benavidez explains that Atty. Jakosalem did not appear on the scheduled pre-trial
conference because he got mad at her when she refused to heed his advice to settle when the trial
court granted Salvador’s motion for issuance of preliminary attachment. Under the circumstances,
she should have been exempted from the rule that the negligence of counsel binds the client. 17
For her part, she failed to appear because she was then suffering from illness. Contrary to the
finding of the CA, her medical certificate was not belatedly submitted. She submitted it within a
reasonable period after she received the order allowing Salvador to present evidence ex-parte and
considering the case for resolution thereafter. 18

In litis pendentia, there is no
hard and fast rule in
determining which of the two
actions should be abated
Litis pendentia is a Latin term, which literally means "a pending suit" and is variously referred to in
some decisions as lis pendens and auter action pendant. As a ground for the dismissal of a civil
action, it refers to the situation where two actions are pending between the same parties for the
same cause of action, so that one of them becomes unnecessary and vexatious. It is based on the
policy against multiplicity of suits.
19
Litis pendentia exists when the following requisites are present: identity of the parties in the two
actions; substantial identity in the causes of action and in the reliefs sought by the parties; and the
identity between the two actions should be such that any judgment that may be rendered in one
case, regardless of which party is successful, would amount to res judicata in the other. 20
On the other hand, forum shopping exists when, as a result of an adverse decision in one forum, or
in anticipation thereof, a party seeks a favorable opinion in another forum through means other than
appeal or certiorari.21
There is forum shopping when the elements of litis pendentia are present or where a final judgment
in one case will amount to res judicata in another. 22
In the present controversy, the Court is of the view that litis pendentia exists. All the elements are
present: first, both Benavidez and Salvador are parties in both cases; second, both complaints are
concerned with the same promissory note; and third, the judgment in either case would be
determinative of the other.
With the foregoing, which case then should be dismissed? At first glance, it would seem that Civil
Case No. 00-5660 or the complaint filed with RTC-Antipolo should have been dismissed applying the
"priority-in-time rule." This rule, however, is not ironclad. The rule is not applied if the first case was
filed merely to pre-empt the later action or to anticipate its filing and lay the basis for its dismissal. A
crucial consideration is the good faith of the parties. In recent rulings, the more appropriate case is
preferred and survives. In Spouses Abines v. BPI, it was written:
23
There is no hard and fast rule in determining which of the actions should be abated on the ground
of litis pendentia, but through time, the Supreme Court has endeavored to lay down certain criteria to
guide lower courts faced with this legal dilemma. As a rule, preference is given to the first action filed
to be retained. This is in accordance with the maxim Qui prior est tempore, potior est jure. There are,
however, limitations to this rule. Hence, the first action may be abated if it was filed merely to pre-
empt the later action or to anticipate its filing and lay the basis for its dismissal. Thus, the bona fides
or good faith of the parties is a crucial element. A later case shall not be abated if not brought to
harass or vex; and the first case can be abated if it is merely an anticipatory action or, more
appropriately, an anticipatory defense against an expected suit – a clever move to steal the march
from the aggrieved party.
Another exception to the priority in time rule is the criterion of the more appropriate action. Thus, an
action, although filed later, shall not be dismissed if it is the more appropriate vehicle for litigating the
issues between the parties. [Underscoring supplied]
In the relatively recent case of Dotmatrix Trading v. Legaspi, the Court had the occasion to
24
extensively discuss the various rules and consideration in determining which case to dismiss in such
situations. It included its analysis of Abines. Thus:
Early on, we applied the principle of Qui prior est tempore, potior est jure (literally, he who is before
in time is better in right) in dismissing a case on the ground of litis pendentia. This was exemplified in
the relatively early case of Del Rosario v. Jacinto where two complaints for reconveyance and/or
recovery of the same parcel of land were filed by substantially the same parties, with the second
case only impleading more party-plaintiffs. The Court held that "parties who base their contention
upon the same rights as the litigants in a previous suit are bound by the judgment in the latter case."
Without expressly saying so in litis pendentia terms, the Court gave priority to the suit filed earlier.
In Pampanga Bus Company, Inc. v. Ocfemia, complaints for damages arising from a collision of a
cargo truck and a bus were separately filed by the owners of the colliding vehicles. The complaint of
the owners of the cargo truck prevailed and the complaint of the owners of the bus had to yield, as
the cargo truck owners first filed their complaint. Notably, the first and prevailing case was far
advanced in development, with an answer with counterclaim and an answer to the counterclaim
having been already filed, thus fully joining the issues.
In Lamis Ents. v. Lagamon, the first case was a complaint for specific performance of obligations
under a Memorandum of Agreement, while the second case was a complaint for sums of money
arising from obligations under a promissory note and a chattel mortgage, and damages. We
dismissed the second case because the claims for sums of money therein arose from the
Memorandum of Agreement sued upon in the first case.
Ago Timber Corporation v. Ruiz offered an insightful reason after both parties had each pleaded the
pendency of another action between the same parties for the same cause. The Court ruled that the
second action should be dismissed, "not only as a matter of comity with a coordinate and co-equal
court (Laureta & Nolledo, Commentaries & Jurisprudence on Injunction, p. 79, citing Harrison v.
Littlefield, 57 Tex. Div. A. 617, 619, 124 SW 212), but also to prevent confusion that might seriously
hinder the administration of justice. (Cabigao, et al. v. Del Rosario, et al., 44 Phil. 182)."
In all these cases, we gave preference to the first action filed to be retained. The "priority-in-time
rule," however, is not absolute.
In the 1956 case of Teodoro v. Mirasol, we deviated from the "priority-in-time rule" and applied the
"more appropriate action test" and the "anticipatory test."
The "more appropriate action test" considers the real issue raised by the pleadings and the
ultimate objective of the parties; the more appropriate action is the one where the real issues
raised can be fully and completely settled. In Teodoro, the lessee filed an action for declaratory
relief to fix the period of the lease, but the lessor moved for its dismissal because he had
subsequently filed an action for ejectment against the lessee. We noted that the unlawful detainer
suit was the more appropriate action to resolve the real issue between the parties - whether or not
the lessee should be allowed to continue occupying the land under the terms of the lease contract;
this was the subject matter of the second suit for unlawful detainer, and was also the main or
principal purpose of the first suit for declaratory relief.
In the "anticipatory test," the bona fides or good faith of the parties is the critical element. If the
1âwphi1
first suit is filed merely to preempt the later action or to anticipate its filing and lay the basis
for its dismissal, then the first suit should be dismissed. In Teodoro, we noted that the first
action, declaratory relief, was filed by the lessee to anticipate the filing of the second action, unlawful
detainer, considering the lessor's letter informing the lessee that the lease contract had expired.
We also applied the "more appropriate action test" in Ramos v. Peralta. In this case, the lessee filed
an action for consignation of lease rentals against the new owner of the property, but the new owner
moved to dismiss the consignation case because of the quieting of title case he had also filed
against the lessee. Finding that the real issue between the parties involved the right to
occupy/possess the subject property, we ordered the dismissal of the consignation case, noting that
the quieting of title case is the more appropriate vehicle for the ventilation of the issues between
them; the consignation case raised the issue of the right to possession of the lessee under the lease
contract, an issue that was effectively covered by the quieting of title case which raised the issue of
the validity and effectivity of the same lease contract.
In University Physician Services, Inc. v. Court of Appeals, we applied both the "more appropriate
action test" and "anticipatory test." In this case, the new owner of an apartment sent a demand letter
to the lessee to vacate the leased apartment unit. When the lessee filed an action for damages and
injunction against the new owner, the new owner moved for the dismissal of the action for damages
on account of the action for ejectment it had also filed. We noted that ejectment suit is the more
appropriate action to resolve the issue of whether the lessee had the right to occupy the apartment
unit, where the question of possession is likewise the primary issue for resolution. We also noted
that the lessee, after her unjustified refusal to vacate the premises, was aware that an ejectment
case against her was forthcoming; the lessee's filing of the complaint for damages and injunction
was but a canny and preemptive maneuver intended to block the new owner's action for ejectment.
We also applied the "more appropriate action test" in the 2003 case Panganiban v. Pilipinas Shell
Petroleum Corp., where the lessee filed a petition for declaratory relief on the issue of renewal of the
lease of a gasoline service station, while the lessor filed an unlawful detainer case against the
lessee. On the question of which action should be dismissed, we noted that the interpretation of a
provision in the lease contract as to when the lease would expire is the key issue that would
determine the lessee's right to possess the gasoline service station. The primary issue – the physical
possession of the gasoline station - is best settled in the ejectment suit that directly confronted the
physical possession issue, and not in any other case such as an action for declaratory relief.
A more recent case - Abines v. Bank of the Philippine Islands in 2006 - saw the application of both
the "priority-in-time rule" and the "more appropriate action test." In this case, the respondent filed a
complaint for collection of sum of money against the petitioners to enforce its rights under the
promissory notes and real estate mortgages, while the petitioners subsequently filed a complaint for
reformation of the promissory notes and real estate mortgages. We held that the first case, the
collection case, should subsist because it is the first action filed and the more appropriate vehicle for
litigating all the issues in the controversy. We noted that in the second case, the reformation case,
the petitioners acknowledged their indebtedness to the respondent; they merely contested the
amounts of the principal, interest and the remaining balance. We observed, too, that the petitioners'
claims in the reformation case were in the nature of defenses to the collection case and should be
asserted in this latter case.
Under this established jurisprudence on litis pendentia, the following considerations predominate in
the ascending order of importance in determining which action should prevail: (1) the date of filing,
with preference generally given to the first action filed to be retained; (2) whether the action sought
to be dismissed was filed merely to preempt the later action or to anticipate its filing and lay the basis
for its dismissal; and (3) whether the action is the appropriate vehicle for litigating the issues
between the parties. [Underscoring supplied]
25
In the complaint filed before RTC-Morong, Benavidez alleged, among others, that it was defendant
Atty. Nepthalie Segarra (Atty. Segarra) who arranged the loan in the amount of ₱1,500,000.00 for
her at his own initiative; that he was the one who received the amount for her on or about March 10,
1998 from defendant Salvador; that he paid Farmers Bank the amount of ₱1,049,266.12 leaving a
balance of more than ₱450,000.00 in his possession; and that he made her sign a promissory note.
Benavidez prayed, among others, that Atty. Segarra be ordered to give her the balance of the
amount loaned and that the promissory note that Salvador allegedly executed be declared null and
void because she was just duped into signing the said document through machinations and that the
stipulated interest therein was shocking to the conscience. Salvador, on the other hand, filed the
subject case for the collection of a sum of money before RTC-Antipolo to enforce his rights under the
promissory note.
Considering the nature of the transaction between the parties, the Court believes that the case for
collection of sum of money filed before RTC-Antipolo should be upheld as the more appropriate case
because the judgment therein would eventually settle the issue in the controversy - whether or not
Benavidez should be made accountable for the subject loan. In the complaint that she filed with
RTC- Morong, Benavidez never denied that she contracted a loan with Salvador. Under her second
cause of action, she alleged:
SECOND CAUSE OF ACTION
11. Defendant Atty. Nepthalie Segarra arranged a loan in the amount of ONE MILLION AND
FIVE HUNDRED THOUSAND (₱1,500,000.00) PESOS for plaintiff at his own initiative;
12. Defendant Atty. Nepthalie Segarra received the ₱1,500,000.00 on or about March 10,
1998 from defendant Nestor Salvador in behalf of and for delivery to plaintiff;
13. Defendant Atty. Nepthalie Segarra paid Farmers Bank the amount of ₱1,049,266.12
leaving a balance of more than ₱450,000.00 in his possession. A copy of the receipt
evidencing payment is herewith attached as Annex "A" and made an integral part hereof;
14. Defendant Atty. Nepthalie Segarra made plaintiff sign a Promissory Note evidencing the
loan of ₱1,500,000.00. A copy of said Promissory Note is herewith attached as Annex "B"
and made an integral part hereof; [Underscoring supplied]
26
From the foregoing, it is clear that there was an amount of money borrowed from Salvador which
was used in the repurchase of her foreclosed property. Whether or not it was Atty. Segarra who
arranged the loan is immaterial. The fact stands that she borrowed from Salvador and she benefited
from it. Her insistence that the remaining balance of ₱450,000.00 of the money loaned was never
handed to her by Atty. Segarra is a matter between the two of them. As far as she and Salvador are
concerned, there is admittedly an obligation. Whether the promissory note was void or not could
have been proven by her during the trial but she forfeited her right to do so when she and her lawyer
failed to submit a pre-trial brief and to appear at the pre-trial as will be discussed hereafter.
At this point, to dismiss Civil Case No. 00-5660 would only result in needless delay in the resolution
of the parties' dispute and bring them back to square one. This consequence will defeat the public
policy reasons behind litis pendentia which, like the rule on forum shopping, aim to prevent the
unnecessary burdening of our courts and undue taxing of the manpower and financial resources of
the Judiciary; to avoid the situation where co-equal courts issue conflicting decisions over the same
cause; and to preclude one party from harassing the other party through the filing of an unnecessary
or vexatious suit.27
The failure of a party to file a

pre-trial brief or to appear at a
pre-trial conference shall be
cause to allow the other party
to present evidence ex parte.
Benavidez basically contends that she should not be made to suffer the irresponsibility of her former
counsel, Atty. Jakosalem, and that the trial court should have relaxed the application of the Rules of
Court, reopened the case and allowed her to present evidence in her favor.
The Court is not moved.
Section 4, Rule 18 of the Rules of Court provides that it is the duty of the parties and their counsel to
appear at the pre-trial conference. The effect of their failure to appear is provided by Section 5 of the
same rule where it states:
Sec. 5. Effect of failure to appear.- The failure of the plaintiff to appear when so required pursuant
to the next preceding section shall be cause for dismissal of the action. The dismissal shall be with
prejudice, unless otherwise ordered by the court. A similar failure on the part of the defendant
shall be cause to allow the plaintiff to present his evidence ex parte and the court to render
judgment on the basis thereof. [Emphasis supplied]
Furthermore, Section 6 thereof provides:
Sec. 6. Pre-trial brief.-The parties shall file with the court and serve on the adverse party, in such
manner as shall ensure their receipt thereof at least three (3) days before the date of the pre-trial,
their respective pre-trial briefs which shall contain, among others:
xxx
Failure to file the pre-trial brief shall have the same effect as failure to appear at the pre-trial.
From the foregoing, it is clear that the failure of a party to appear at the pre-trial has adverse
consequences. If the absent party is the plaintiff, then his case shall be dismissed. If it is the
defendant who fails to appear, then the plaintiff is allowed to present his evidence ex parte and the
court shall render judgment on the basis thereof. Thus, the plaintiff is given the privilege to present
his evidence without objection from the defendant, the likelihood being that the court will decide in
favor of the plaintiff, the defendant having forfeited the opportunity to rebut or present its own
evidence. 28
RTC-Antipolo then had the legal basis to allow Salvador to present evidence ex parte upon motion.
Benavidez and her counsel were not present at the scheduled pre-trial conference despite due
notice. They did not file the required pre-trial brief despite receipt of the Order. The rule explicitly
provides that both parties and their counsel are mandated to appear thereat except for: (1) a valid
excuse; and (2) appearance of a representative on behalf of a party who is fully authorized in writing
to enter into an amicable settlement, to submit to alternative modes of dispute resolution, and to
enter into stipulations or admissions of facts and documents. In this case, Benavidez’s lawyer was
29
already negligent, but she compounded this by being negligent herself. She was aware of the
scheduled pre-trial conference, but she did not make any move to prevent the prejudicial
consequences of her absence or that of her counsel. If she knew that her lawyer would not appear
and could not because she was ill, she should have sent a representative in court to inform the judge
of her predicament.
Also, her failure to file the pre-trial brief warranted the same effect because the rules dictate that
failure to file a pre-trial brief shall have the same effect as failure to appear at the pre-trial. Settled is
the rule that the negligence of a counsel binds his clients. Neither Benavidez nor her counsel can
30
now evade the effects of their misfeasance.
Stipulated interest should be

reduced for being iniquitous
and unconscionable.
This Court is not unmindful of the fact that parties to a loan contract have wide latitude to stipulate on
any interest rate in view of the Central Bank Circular No. 905 s. 1982 which suspended the Usury
Law ceiling on interest effective January I, 1983. It is, however, worth stressing that interest rates
whenever unconscionable may still be declared illegal. There is nothing in said circular which grants
lenders carte blanche authority to raise interest rates to levels which will either enslave their
borrowers or lead to a hemorrhaging of their assets. In Menchavez v. Bermudez, the interest rate
31 32
of 5% per month, which when summed up would reach 60% per annum, is null and void for being
excessive, iniquitous, unconscionable and exorbitant, contrary to morals, and the law. 33
Accordingly, in this case, the Court considers the compounded interest rate of 5% per month as
iniquitous and unconscionable and void and inexistent from the beginning. The debt is to be
considered without the stipulation of the iniquitous and unconscionable interest rate. In line with the
34
ruling in the recent case of Nacar v. Gallery Frames, the legal interest of 6% per annum must be
35
imposed in lieu of the excessive interest stipulated in the agreement.
WHEREFORE, the petition is DENIED. The November 22, 2005 Decision and the June 8, 2006
Amended Decision of the Court of Appeals are AFFIRMED with MODIFICATION. The interest rate of
5% per month which was the basis in computing Benavidez's obligation is reduced to 6% per
annum.
SO ORDERED.
G.R. No. 104019 January 25, 1993
VICTRONICS COMPUTERS, INC., Petitioner, vs. REGIONAL

TRIAL COURT, BRANCH 63, MAKATI, presided by JUDGE
JULIO R. LOGARTA, PANORAMA ENTERPRISES, INC., PASIG
TOURIST DEVELOPMENT CORP., GALACTIC SPACE
DEVELOPMENT CORP., MALATE TOURIST DEVELOPMENT
CORP., CALOOCAN TOURIST DEVELOPMENT CORP.,
BARRIENTOS & CO., INC., KARL C. VELHAGEN and
ARCHIMEDES R. KING, who operate business under the
names VICTORIA COURT, GMT CONSOLIDATED COMPANY
and VICTORIA GROUP OF COMPANIES, Respondents.
Paras & Reynes Law Office for petitioner. chanrobles virtual law library
Ernest S. Ang for respondents.
DAVIDE, JR., J.:
This is a petition for review on certiorari under Rule 45 of the Rules

of Court. Petitioner seeks to set aside, for being inconsistent with
law and jurisprudence, the 22 January 1992 Order of respondent
Branch 63 of the Regional Trial Court (RTC) of Makati, Metro Manila
which, among others, denied a motion for reconsideration of its
earlier dismissal, on the ground of lis pendens, of a collection suit
docketed as Civil Case No. 91-2069 filed against private
respondents Karl C. Velhagen and Archimedes R. King, alleged
operators of a business under the names VICTORIA COURT, GMT
CONSOLIDATED COMPANY and VICTORIA GROUP OF COMPANIES.
Petitioner further asks this Court, in the exercise of its supervisory
power over lower courts, to direct the respondent Court to issue
alias summonses to the respondent corporations which were
impleaded as additional defendants in the amended complaint filed
in said Civil Case No. 91-2069, and to order the consolidation of this
case in Branch 63 with Civil Case No. 91-2192 pending before
Branch 150 of the said court.chanroblesvirtualawlibrarychanrobles virtual law library
The records disclose the following antecedents: chanrobles virtual law library
Petitioner Victronics Computers, Inc., a domestic corporation

engaged in the sale of computer systems and peripherals,
submitted a quotation for office systems to service the networking
requirements of various Victoria Court branches. chanroblesvirtualawlibrarychanrobles virtual law library
Satisfied with the said quotations, private respondents Velhagen

and King placed an order with the petitioner in a Purchase
Order 1form on which is written "GMT CONSOLIDATED" above the
printed word COMPANY, and the address 2129 Pasong Tamo St.,
Makati, Metro Manila below it. The private respondents ordered six
(6) sets of 80 DATA 386 computer system with peripherals for the
net consideration, after deducting a P7,000.00 discount, of
P767,000.00, subject to the following terms:
a) Payment - 50% down, 50% COD upon completion of delivery.

library
chanroblesvirtualawlibrarychanrobles virtual law
b) Delivery - within 30 calendar days upon receipt of P.O. and 50%

down payment. chanroblesvirtualawlibrarychanrobles virtual law library
c) Penalty - 1% of total P.O. amount per day of delay.
These systems were to be delivered to the parties therein indicated,

namely: VCAD, VCCU, VCHI, VCNE, VCMA and VCES. Per the
delivery receipts, these acronyms stand for Victoria Court drive-in
motels located in different places. chanroblesvirtualawlibrarychanrobles virtual law library
The fifty per cent (50%) downpayment agreed upon was duly paid.
Thereupon, petitioner delivered on 22 May 1991 three (3)of the six
(6) sets to Victoria Court/North EDSA, Victoria Court/Adriatico and
Victoria Court/Cuneta. 2 The remaining sets were delivered on 20
June 1991 to Victoria Court/Hillcrest, Victoria Court/Panorama and
Victoria Court/McArthur. 3 chanrobles virtual law library
As revealed in the complaint in Civil Case No. 91-2192, each of the

aforementioned establishments is owned by the herein six (6)
respondent corporations which, however, decided sometime in 1986
"to band together for their mutual interest and benefit, under the
trade name and style of the Victoria Court Group of Companies." 4 chanrobles virtual law library
As further revealed in the Comment of these corporations, they

operate under a common management team wherein respondents
Velhagen and King are the General Manager and Chief Executive
Officer, respectively. 5 chanrobles virtual law library
Only fifty per cent (50%) of the purchase price of each of the sets
delivered to the different establishments was paid by the said
corporations. 6 The outstanding balance not having been paid within
and even after the period stipulated in the Purchase Order despite
demands for its payment made on Velhagen and King, the petitioner
filed, on 26 July 1991, with the RTC of Makati a Complaint 7 for a
sum of money and damages against:
KARL C. VELHAGEN and ARCHIE R. KING, who operate business
under the names VICTORIA COURT, GMT CONSOLIDATED
COMPANY, and VICTORIA GROUP OF COMPANIES.
The case was docketed as Civil Case No. 91-2069 and was raffled
off to Branch 63 of the said court, presided over by herein
respondent Judge Julio R. Logarta. chanroblesvirtualawlibrarychanrobles virtual law library
Defendants Velhagen and King, herein private respondents, were

each served with a summons and a copy of the complaint on 8
August 1991. 8
The following day, 9 August 1991, the six (6) respondent

corporations9filed with the RTC of Makati a Complaint, dated 7
August 1991, 10 for the nullification of the abovementioned Purchase
Order and for damages against the herein petitioner and one
Teodorico B. Kabigting. It is prayed for in the complaint that:
. . . judgment be rendered for the plaintiffs and against the

defendants declaring the contract to purchase the aforementioned
computer equipment null and void for fraud and undue influence,
and ordering defendants, jointly or severally, to pay plaintiffs: chanrobles virtual law library
1. The sum of P383,500.00 plus reasonable interest of at least 2%

per month from the month of May 1991 until the amount is actually
paid, as compensary (sic) or actual damages; chanrobles virtual law library
2. The sum of P500,000.00 as exemplary damages; chanrobles virtual law library
3. The sum of P100,000.00 and a per appearance fee of P1,000.00

as and by way of attorney's fees; chanrobles virtual law library
4. The cost of the suit.
The case was docketed as Civil Case No. 91-2192 and was raffled
off to Branch 150 of the said court. chanroblesvirtualawlibrarychanrobles virtual law library
Four (4) causes of action are alleged in this complaint. In the first,
the corporations claim that defendant Kabigting, then the Manager
of the Management Information Services of the Victoria Court Group
of Companies who was instructed to canvass or conduct a price
survey of computer equipment supplied by different companies,
connived with Victor Mariano, the petitioner's General Manager and
the latter's old and close friend, in consideration of an alleged
promise of a substantial commission, to falsify the price survey
report and recommend the purchase of the computer equipment
from the petitioner corporation. A routine check of the transaction
likewise disclosed an overpricing of the equipment by at least
P200,000.00 while an audit revealed that the equipment sold was
among the surplus stock of the petitioner. In the second cause of
action, they allege that they forthwith informed the petitioner's Mr.
Mariano about the fraud and sought an audience with him for an
amicable solution to the controversy, but that the petitioner failed to
respond and instead referred the matter to its attorney who in turn
wrote a letter of demand for the payment of the balance of the
purchase price. Reacting, they also referred the matter to their
lawyer who wrote the petitioner a letter informing it that the
contract was being voided due to fraud and undue influence and
demanding that the fifty per cent (50%) downpayment be returned
with a reasonable interest at the rate of two per cent (2%) per
month in exchange for the return of "all computer equipment
purchased from defendant (herein petitioner) in the same condition
as they were received." 11 Upon the petitioner's failure to respond
positively to this offer, they filed the complaint. In the third cause of
action, they allege bad faith and a fraudulent intent on the part of
the defendants and ask for P500,000.00 as exemplary damages.
The fourth cause of action is for attorney's and appearance fees. chanroblesvirtualawlibrarychanrobles virtual law library
No copy of any document whatsoever is attached to the complaint

in said Civil Case No. 91-2192. chanroblesvirtualawlibrarychanrobles virtual law library
On 22 August 1991, private respondents Velhagen and King,

represented by counsel of record for the six (6) corporations in Civil
Case No. 91-2192 - the law firm of ANG, CADIZ and ASSOCIATES -
filed in Civil Case No.
91-2069 a Motion To Dismiss and/or To Suspend Proceedings based
on the following grounds: (a) plaintiff (petitioner herein) failed to
verify the complaint. (b) plaintiff failed to sue the proper parties and
(c) there is a prejudicial question or a pending incident before
another court. In support of these grounds, they allege that (a)
verification is a formal requirement under Section 6, Rule 7 of the
Rules of Court; (b) the transaction in question was not entered into
by them in their personal capacities - they acted for and on behalf
of the corporations they represent; hence, the latter, who chose not
to honor the contract, are the real parties in interest; moreover,
"Victoria Court, GMT Consolidated Company and Victoria Group of
Companies . . . are mere tradenames" 12- none of these named
companies really exist; and (c) Civil Case No. 91-2192 (erroneously
written as 91-2191) for the nullification of the subject purchase
order has been filed against the petitioner and is pending before
Branch 150 of the trial court; accordingly, "[A]t the very least, the
Honorable Court (Branch 63) should suspend all proceedings in this
case because of the existence of a prejudicial question or a pending
incident before another court." Elaborating thereon, said movants
state:
There is a situation wherein two suits were filed for different causes
of action but involving the same transaction or contract. One case,
the one pending before this Honorable Court, is for the enforcement
of the contract, or more specifically, for the collection of the balance
or sum of money as provided for in the contract. In the other case
before another court, what is being sought is the nullification or the
voiding of the same contract for alleged fraud and undue influence.
There is no debate that the more basic question is before the other
court, as the very validity of the contract sought to be enforced is at
issue there.chanroblesvirtualawlibrarychanrobles virtual law library
It is clear therefore that the second case is prejudicial to the

determination of the first case. Whether or not the suit pending
before this Honorable Court will prosper depends entirely on how
the case in the other court will fare. If for example the other court
should determine that there is (sic) sufficient grounds to nullify the
contract, then the collection suit before this Honorable Court must
necessarily fail. It is only after the other court should determined
(sic) that the questioned contract is valid can this Honorable Court
proceed with the collection case. chanroblesvirtualawlibrarychanrobles virtual law library
Suspension of the proceedings before this Honorable Court is
therefore the prudent thing to do. This will avoid the absurd
situation wherein one court will find for one party in one case, and
the other court will find for the adverse party in the second case. It
is also an act of courtesy to a co-equal branch of the same court. 13
virtual law library
chanrobles
They then end with an alternative prayer, thus:
WHEREFORE, premises considered, it is respectfully prayed that the

instant Complaint be dismissed for all or any of the grounds
aforecited. On the alternative, it is prayed that the proceedings
before the Honorable Court be at least suspended until the final
resolution of the other case before Branch 150 of the Regional Trial
Court of Makati. 14 chanrobles virtual law library
Meanwhile, on 5 September 1991, the herein petitioner filed in Civil

Case No. 91-2192 a Special Appearance and Motion To
Dismiss 15 asking the trial court to dismiss the said case on grounds
of improper service of summons and lack of jurisdiction over it as
defendant therein. chanroblesvirtualawlibrarychanrobles virtual law library
On 16 September 1991, Branch 63 of the Makati RTC, through

respondent Judge Julio Logarta, issued an order dismissing Civil
Case No.
91-2069 because of litis pendentia. 16 The court gave the following
reasons, quoted verbatim, in support of its ruling:
. . . Clearly, the elements of litis pendentia, as a ground for a

motion to dismiss is present, to wit:
1. Identity of parties or at least such as representing the same

interests in both actions; chanrobles virtual law library
2. Identity of rights asserted and prayed for, the reliefs being

founded on the same facts; chanrobles virtual law library
3. The identity of the presiding particulars should be such that any

judgment which may be rendered on the other action will regardless
of which party is successful amount to res judicata in the action
under consideration (FEU - Dr. Nicanor Reyes Medical Foundation
vs. Trajano 152 SCRA 453 (1987); Lopez vs. Villaruel, G.R. No.
54323, 1988).
Further, it was held that "the Rule does not require as a ground for
dismissal of a complaint that there is a prior action, but only
pending action (Teodoro vs. Mirasol 53 O.G., 8088 99 Phil. 150)."
Thus, the contention of plaintiff that the case before this Branch is
123 days older than Civil Case No. 91-2192 before Branch 150,
hence, the one lodged with Branch 150 should be the one dismissed
by litis pendentia is untenable. Moreover, "inclusion of additional
parties in second case is no obstacle to its dismissal on the ground
of litis pendentia" (Investors Finance Corp. vs. Judge Ebarle, G.R.
No. 70640, June 29, 1988). 17 chanrobles virtual law library
On 19 September 1991, petitioner filed in Civil Case No. 91-2069 a

contempt charge against respondents Velhagen and King for forum-
shopping, 18 claiming that after having respectively received the
summons and a copy of the complaint, both respondents did not file
an answer with compulsory counterclaim. Instead, "using the names
of certain corporations that represent the same interests they
advance, [they] filed a separate action one day later - before
Branch 150 of the Makati Regional Trial Court in Civil Case No.
91-2192" 19 - which arose from the same transaction or occurrence
as that obtaining in Civil Case No. 91-2069; as a matter of fact, the
complaint in the former reads like an answer with compulsory
counterclaim to the complaint in the latter. Hence, both are guilty of
forum-shopping, double dealing, trifling with the court and abusing
its processes. 20
chanrobles virtual law library
Meanwhile, acting on the petitioner's motion to dismiss Civil Case

No. 91-2192, Branch 150 of the court below, per Judge Zeus
Abrogar, handed down an order, on 25 September 1991, directing -
in order to remove any doubt on the propriety of the service of
summons - the re-service of summons on the petitioner." 21 chanrobles virtual law library
On 4 October 1991, after allegedly accidentally learning of the 16

September 1991 Order of dismissal of Civil Case No. 91-2069,
petitioner requested, and thereafter obtained, a photocopy of the
said order which was not, unfortunately, served on the petitioner's
counsel until then. 22 chanrobles virtual law library
On 9 October 1991, petitioner filed in Civil Case No. 91-2069 an Ex
Abundante Cautela Motion To Refer Forum-Shopping Charge to
Executive Judge. 23 On the same date, petitioner filed a Motion For
Reconsideration24 of the said order of dismissal. chanroblesvirtualawlibrarychanrobles virtual law library
On 14 October 1991, after proper service of summons to it,

petitioner filed a Motion To Dismiss 25 Civil Case No. 91-2192 on the
grounds of litis pendentia and forum shopping. chanroblesvirtualawlibrarychanrobles virtual law library
Thereupon, on 11 December 1991, petitioner filed in Civil Case No.

91-2069 a motion for the consolidation 26 of the two (2) cases
before Branch 63 where the prior case was filed; on 6 January
1992, it also filed in the same case a Manifestation Pro Hac
Vice 27 wherein it stated that "there was technically no pending
action before" Branch 150 as it had not yet acquired jurisdiction
over the person of the petitioner (due to improper service of
summons) as evidenced by the 25 September 1991 Order of Judge
Abrogar himself. chanroblesvirtualawlibrarychanrobles virtual law library
In the meantime, however, petitioner filed in Civil Case No. 91-2192

an Answer with Compulsory Counterclaim 28 dated 20 January 1992.
One of the Special and Affirmative Defenses averred therein is the
pendency in Branch 63 of Civil Case No. 91-2069. Also on 20
January 1992, petitioner filed in Civil Case No. 91-2069 an
Amended Complaint impleading therein, as additional defendants,
the six (6) corporations which sued as plaintiffs in Civil Case No. 91-
2192. 29chanrobles virtual law library
On 7 February 1992, the Clerk of Court of Branch 63 sent the

petitioner, by registered mail, 30 a copy of the 22 January 1992
Order in Civil Case No.
91-2069 31 which resolved the various motions filed by the latter.
The said order reads:
Consequently, the Motion for Consolidation filed by plaintiff on

December 11, 1991, perforce, should also be DENIED for being
moot and academic. chanroblesvirtualawlibrarychanrobles virtual law library
WHEREFORE, premises considered, the Motion for Reconsideration

dated October 7, 1991; the Contempt Charge for Forum-Shopping;
the Motion to Refer the Contempt Charge to the Executive Judge;
the Motion for Consolidation; and, Manifestation Pro Hac Vice are
hereby DENIED, and the order dated September 16, 1991,
dismissing the
above-entitled case is hereby REITERATED.
Anent the particular issue of forum shopping, the lower court held
that the same "is negated by the move of defendants (private
respondents Velhagen and King) to dismiss the case filed before this
court [Civil Case No. 91-2069], to give way to that which pends
before Branch 150 [Civil Case No. 91-2192]." And, on the matter
of litis pendentia, it reiterated its ruling that the filing of one action
ahead of another is not decisive on the issue of which of the two (2)
identical actions in two (2) separate courts of concurrent jurisdiction
should be dismissed. chanroblesvirtualawlibrarychanrobles virtual law library
As a consequence of this 22 January 1992 Order, respondent Court,

in Civil Case No. 91-2069, issued on 20 February 1992 an order
denying the petitioner's motion for the issuance of an alias
summons. 32 chanrobles virtual law library
Hence, the instant petition wherein the petitioner claims that the
respondent Court erred:
(1) in equating respondents' ground of "pending incident before

another court" to ask for suspension of proceedings with litis
pendentia under Rule 16 when respondents' grounds to ask for
dismissal were only (a) lack of verification: and (b) not having
initially impleaded respondent corporations as proper parties -
grounds not found in Rule 16; chanrobles virtual law library
(2) in ruling, with precipitate haste, and in insisting, despite a

chance to reconsider, that there was another pending action at the
time of dismissal when technically there was none since Branch 150
was still trying to acquire jurisdiction over petitioner's person and to
notify petitioner by new summons some 2 weeks later about the
filing of the second; chanrobles virtual law library
(3) in preferring to maintain the second action over the first, which
(a) was 123 cases (sic) older than the second; (b) was the one
pending when the second one was just filed; and (c) was meant to
collect the unpaid balance of close to half a million pesos that
respondents still owe and which in substantial justice was entitled to
be heard if not preferentially over the second, at least jointly with
the second upon consolidation; chanrobles virtual law library
(4) in disregarding the Supreme Court's rulings in vda. de Tolentino

v. de Guzman, Pambusco v. Ocfemia, Ramos v. CIR, and other
applicable decisions;chanrobles virtual law library
(5) in not finding, by itself or through the executive judge, that the
institution of the second action was a specie of forum shopping, in
the light of DBP v. IAC, given that (a) the second action came 2
weeks later after the first complaint; (b) the second complaint was
filed after respondents had already received a copy of the first; c)
respondents' complaint reads like an answer with compulsory
counterclaim to petitioner's complaint; and (d) the second action
arose from the same transaction, facts, and circumstances identical
to those in an already pending proceeding; chanrobles virtual law library
(6) in totally ignoring the existence of the amended complaint; and

law library
chanrobles virtual
(7) in releasing an order on February 7, 1992 that did not conform

with the prevailing state of affairs of the action as of that time and
with applicable Supreme Court decisions since (a) the amended
complaint had already rendered the first complaintfunctus
oficio along with resolutions that attached to it; (b) the motion for
alias summons should have been granted as a matter of course;
and (c) consolidation should have afterwards been granted to
promote the Supreme Court's avowed preference for consolidation
as expressed in Active Wood Products v. CA because it is a
"beneficial and desirable" practice. 33 chanrobles virtual law library
On 10 June 1992, 34 after the private respondents filed their

Comment 35to the petition (on 20 April 1992) and the petitioner filed
its Reply 36thereto (on 28 May 1992), We resolved to give due
course to the petition and required the parties to submit their
respective Memoranda, which they subsequently complied with. chanroblesvirtualawlibrarychanrobles virtual law library
The pivotal issues raised in the instant petition are: (1) whether or
not the respondent Court erred in dismissing, on the ground of litis
pendentia, Civil Case No. 91-2069 which has priority with respect to
the time of filing, and (2) whether or not the private respondents
are guilty of forum-shopping. chanroblesvirtualawlibrarychanrobles virtual law library
It is a rule that for litis pendentia to be invoked as a ground for the

abatement or dismissal of an action, the concurrence of the
following requisites is necessary: (a) identity of parties, or at least
such as representing the same interest 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 (2) cases should be
such that the judgment that may be rendered in the pending case
would, regardless of which party is successful, amount to res
judicata in the other. 37 chanrobles virtual law library
The presence of all the foregoing requisites with respect to Civil

Case No. 91-2069 and Civil Case No. 91-2192 is not controverted
by the parties. As a matter of fact, both invoked these identities in
their respective motions to dismiss. chanroblesvirtualawlibrarychanrobles virtual law library
As to the first requirement, it is quite evident that the petitioner is a

party in both cases. There is, however, an initial confusion as to the
personalities of the defendants in Civil Case No. 91-2069 and the
plaintiffs in Civil Case No. 91-2192, who are claimed to be natural
persons doing business under the names of "Victoria Court, GMT
Consolidated Company and Victoria Group of Companies" and
juridical persons (the six (6) corporations), respectively. In the light
of the admission by the six (6) corporations that they banded
together for their mutual interest and benefit under the trade name
and style of the Victoria Group of Companies; that they put up a
common management team with respondents Velhagen and King as
General Manager and Chief Executive Officer, respectively; that the
purchase order in question is the official act of the said officers; and
that the computer sets were in fact received by them for which they
each paid a downpayment of fifty per cent (50%) of the purchase
price thereof, there can be no doubt that the defendants in the first
case and the plaintiffs in the second case represent the same
interests.chanroblesvirtualawlibrarychanrobles virtual law library
As regards the second element, a careful reading of the allegations
in the parties' respective complaints and motions to dismiss in the
two (2) civil actions below reveals that both assert rights founded
on an identical set of facts which give rise to one basic issue - the
validity of the contract in question, the purchase order for the
computer equipment. Civil Case No. 91-2069 actually involves an
action for specific performance; it thus upholds the contract and
assumes its validity. Civil Case No. 91-2192, on the other hand, is
for the nullification of the contract on the grounds of fraud and
vitiated consent. While ostensibly the cause of action in one is
opposite to that in the other, in the final analysis, what is being
determined is the validity of the contract. It would not have been
unlikely that in its answer filed in Civil Case No. 91-2192, the
petitioner would merely reiterate its allegations in the complaint in
Civil Case No. 91-2069 sustaining and invoking the validity of the
purchase order and setting up lis pendens as a defense. This is what
it exactly did. It would not have been likewise unlikely that the
defense of the private respondents in Civil Case No. 91-2069 would
be one in pursuit of their theory, as plaintiffs, in Civil Case No. 91-
2192. Thus, the identity of rights asserted cannot be disputed.
Howsoever viewed, it is beyond cavil that regardless of the decision
that would be promulgated in Civil Case No. 91-2069, the same
would constitute res judicata on Civil Case No. 91-2192 and vice-
versa. But which case should be abated? Squarely put, should it be
the second, which was filed fourteen (14) days after the filing of the
first, or should it be the first? chanrobles virtual law library
Like res judicata as a doctrine, litis pendentia as a principle is a

sanction of public policy against multiplicity of suits. 38 Differently
put, "[T]he principle upon which a 'plea of another action pending' is
sustained is that the latter action is deemed unnecessary and
vexatious." 39
There is no hard and fast rule that governs the determination of

which of the actions should be abated. A review of relevant cases
decided by this Court discloses that generally, it is the second case
which is abated. Indeed, it seems that the maxim Qui prior est
tempore, potior est jure 40controls. chanroblesvirtualawlibrarychanrobles virtual law library
To be sure, there are limitations to this rule. At common law, if it
appears to the court that the second action was not brought to
harass or vex the defendant, and is not in fact vexatious, it may
refuse to abate the second action, allow it to stand, and order the
first one to be discontinued on proper terms. The court may also
permit the plaintiff to discontinue the first suit and thereby defeat
the plea in abatement where the second suit is necessary in order to
protect and secure the plaintiff's full rights, or where the abatement
of the second suit is necessary in order to protect and secure the
plaintiff's full rights, or where the abatement of the second would
result impossible loss of substantial rights on the part of the
plaintiff. 41
In our jurisdiction, the law itself 42 does not specifically require that
the pending action which would hold in abatement the other must
be a pending prior action. Thus, in Teodoro vs. Mirasol, 43 this Court
observed:
It is to be noted that the Rules do not require as a ground for

dismissal of a complaint that there is a prior pending action. They
provide that there is a pending action, not a pending prioraction.
The fact that the unlawful detainer suit was of a later date is no bar
to the dismissal of the present action. We find, therefore, no error in
the ruling of the court a quo that plaintiff's action should be
dismissed on the ground of the pendency of another more
appropriate action between the same parties and for the same
cause.
In Roa-Magsaysay vs. Magsaysay, 44 wherein it was the first case

which was abated, this Court ruled:
In any event, since We are not really dealing with jurisdiction but
mainly with venue, considering both courts concerned do have
jurisdiction over the causes of action of the parties herein against
each other, the better rule in the event of conflict between two
courts of concurrent jurisdiction as in the present case, is to allow
the litigation to be tried and decided by the court which, under the
circumstances obtaining in the controversy, would, in the mind of
this Court, be in a better position to serve the interests of justice,
considering the nature of the controversy, the comparative
accessibility of the court to the parties, having in view their peculiar
positions and capabilities, and other similar factors. Without in any
manner casting doubt as to the capacity of the Court of First
Instance of Zambales to adjudicate properly cases involving
domestic relations, it is easy to see that the Juvenile and Domestic
Relations Court of Quezon City which was created in order to give
specialized attention to family problems, armed as it is with
adequate and corresponding facilities not available to ordinary
courts of first instance, would be able to attend to the matters here
in dispute with a little more degree of expertise and experience,
resulting in better service to the interests of justice. A reading of
the causes of action alleged by the contending spouses and a
consideration of their nature, cannot but convince Us that, since
anyway, there is an available Domestic Court that can legally take
cognizance of such family issues, it is better that said Domestic
Court be the one chosen to settle the same as the facts and the law
may warrant.
We made the same pronouncement in Ramos vs. Peralta: 45
Finally, the rule on litis pendentia does not require that the later
case should yield to the earlier case. What is required merely is that
there be another pending action, not a prior pending action.
Considering the broader scope of inquiry involved in Civil Case No.
4102 and the location of the property involved, no error was
committed by the lower court in deferring to the Bataan court's
jurisdiction.
An analysis of these cases unravels the ratio for the rejection of the
priority-in-time rule and establishes the criteria to determine which
action should be upheld and which is to be abated. In Teodoro, this
Court used the criterion of the more appropriate action. We ruled
therein that the unlawful detainer case, which was filed later, was
the more appropriate action because the earlier
case - for specific performance or declaratory relief - filed by the
lessee (Teodoro) in the Court of First Instance (CFI) to seek the
extension of the lease for another two (2) years or the fixing of a
longer term for it, was "prompted by a desire on plaintiff's part to
anticipate the action for unlawful detainer, the probability of which
was apparent from the letter of the defendant to the plaintiff
advising the latter that the contract of lease expired on October 1,
1954." 46 The real issue between the parties therein was whether or
not the lessee should be allowed to continue occupying the leased
premises under a contract the terms of which were also the subject
matter of the unlawful detainer case. Consonant with the doctrine
laid down in Pue vs. Gonzales 47 and Lim Si vs. Lim, 48 the right of
the lessee to occupy the land leased against the lessor should be
decided under Rule 70 of the Rules of Court; the fact that the
unlawful detainer case was filed later then of no moment. Thus, the
latter was the more appropriate action. chanroblesvirtualawlibrarychanrobles virtual law library
The "more appropriate action" criterion was also applied in Ramos

vs. Peralta, 49 Ramos, the lessee of a fishpond located in Pilar,
Bataan, sought to consign with the CFI of Manila the advance
rentals for the fishpond for 15 March 1976 and 15 June 1976 after
its tender was refused by the lessors (Ortañez spouses) 50 and after
he was informed by the vendee of the property, P.R. Roman Inc. -
in its letter of 1 May 1976 - that it had acquired the property and
would take possession thereof on 16 May 1976. Ramos filed the
consignation case, docketed as Civil Case No. 103647, with the
lower court on 2 August 1976. Meanwhile on 13 August 1976, P.R.
Roman Inc. filed with the CFI of Bataan a complaint for quieting of
title against Ramos; this case was docketed as Civil Case No. 4102.
Consequently, P.R. Roman, Inc. filed a motion to dismiss Civil Case
No. 103647 on the ground of, inter alia, lis pendens. The motion
was granted. On appeal, this Court affirmed the lower court's
decision considering the "broader scope of inquiry involved in Civil
Case No. 4102 and the location of the property involved." chanrobles virtual law library
In Roa-Magsaysay, the criterion used was the consideration of

the interest of justice. In applying this standard, what was asked
was which court would be "in a better position to serve the interests
of justice," 51taking into account (a) the nature of the controversy,
(b) the comparative accessibility of the court to the parties and (c)
other similar factors. While such a test was enunciated therein, this
Court relied on its constitutional authority to change venue to avoid
a miscarriage of justice.
chanroblesvirtualawlibrarychanrobles virtual law library
It is interesting to note that in common law, as earlier adverted to,
and pursuant to the Teodoro vs. Mirasol 52 case, the bona fides or
good faith of the parties is a crucial element. In the former, the
second case shall not be abated if not brought to harass or vex; in
the latter, the first case shall be abated if it is merely an
anticipatory action or, more appropriately, an anticipatory defense
against an expected suit - a clever move to steal the march from
the aggrieved party.chanroblesvirtualawlibrarychanrobles virtual law library
In the case at bar, We do not hesitate to rule that the second case,
Civil Case No. 91-2192, was filed not so much upon the inspiration
of unadulterated good faith to seek redress for a genuine wrong
committed but more to vex or harass in another forum the plaintiff
in the first case, the herein petitioner. What cannot escape Our
attention is the undue, if not indecent, haste in the preparation of
the complaint in Civil Case No. 91-2192 by the counsel for the
defendants in Civil Case No. 91-2069. Civil Case No. 91-2192 is for
the nullification of a contract - the purchase order signed by no less
than the authorized officers of the six (6) respondent corporations.
It is, therefore, based upon a written document. Section 7, Rule 8 of
the Rules of Court expressly provides that:
Sec. 7. Action or defense based on document. - Whenever an action

or defense is based upon a written instrument or document, the
substance of such instrument or document shall be set forth in the
pleading, and the original or a copy thereof shall be attached to
the pleading as an exhibit, which shall be deemed to be a part of
the pleading, or said copy may with like effect be set forth in the
pleading. (Emphasis supplied).
There was absolutely no compliance with this requisite as no copy of

the purchase order was set forth in the body of the complaint or
attached to the complaint itself. The non-observance of this simple
yet basic rule cannot be attributed to the ignorance of the lawyers
who, measured by their pleadings in this case, appear to be
experienced and well-versed in the law, but to the frenzied efforts
to file the complaint at the earliest possible time. To make it appear
that the complaint was prepared before service of summons on the
defendants in Civil Case No. 91-2069, it was dated 7 August
1991. 53 It was, however, filed only on 9 August 1991 although the
office of the abovementioned lawyers is located at 2129 Pasong
Tamo St., 54 Makati, Metro Manila, within the same municipality
wherein the court sits. Moreover, all six (6) corporations likewise
have their principal office at the same Pasong Tamo address. 55 The
private respondents' claim in their Comment that:
. . . when undersigned counsel filed Civil Case No. 91-2192, neither

he nor his clients had actual notice of the earlier suit filed by
petitioner. Civil Case No. 91-2192 was filed in good faith. 56 chanrobles virtual law library
is clearly self-serving. Besides, counsel is careful enough to use

"actual notice" thereby admitting, in effect, that some other form of
notice was received. chanroblesvirtualawlibrarychanrobles virtual law library
Being merely vexatious, Civil Case No. 91-2192 is the abatable

case.chanroblesvirtualawlibrarychanrobles virtual law library
Independently of the element of bona fides, the fact remains that

under the peculiar circumstances attending the transaction in
question, the first case - for specific performance - is the more
appropriate action. In the first place, petitioner, the unpaid seller in
the amount of fifty per cent (50%) of the purchase price, had
completely delivered the six (6) computer sets to the
establishments of the six (6) respondent corporations within the
period stipulated in the purchase order. Despite their assertion in
the complaint in Civil Case No. 91-2192 that the equipment was
"outmoded and obsolete," 57 they neither claim the inability to use
the computer sets nor insinuate that they had, at any time, called
upon the petitioner to account under its warranty against hidden
defects. 58 They did not even offer to return the computer
equipment. Thus, in reality, it is the petitioner who has been
aggrieved; in availing of the remedy of specific performance allowed
under Article 1191 of the Civil Code, it was acting well within its
rights. The subsequent action for the annulment of the contract on
grounds of fraud and vitiated consent is nothing but a mere defense
thereto. chanroblesvirtualawlibrarychanrobles virtual law library
Respondents Velhagen and King very well acknowledged the

weakness of the defense of lis pendens. In their Motion to Dismiss
and/or Suspend Proceedings, 59they did not categorically refer to
Civil Case No. 91-2192 as a pending action. In lieu thereof, they
chose the phrase "prejudicial question or a pending incident before
another court;" in consonance therewith, they even prayed that if
Civil Case No. 91-2069 may not be dismissed for any of the grounds
therein invoked, it should be suspended until the final resolution of
Civil Case No. 91-2192. Fortunately for them, respondent Court
read the phrase "prejudicial question or a pending incident" as lis
pendens and thereafter decreed the dismissal of said Civil Case No.
91-2069. This clearly amounted to grave abuse of discretion. chanroblesvirtualawlibrarychanrobles virtual law library
And now on the issue of forum-shopping. chanroblesvirtualawlibrarychanrobles virtual law library
In its Order of 22 January 1992, respondent Court held:
Likewise, the Court finds no basis to cite defendant in contempt of

court, allegedly for engaging in forum-shopping as this allegation is
negated by the move of defendants to dismiss the case filed before
this Court, to give way to that which pends before Branch 150. 60 chanrobles virtual law library
Respondent Court does not seem to have a full grasp of the

underpinnings of forum-shopping. In People vs. Court of
Appeals, 61 We noted that
forum-shopping has its roots in the rule that a party should not be
allowed to pursue simultaneous remedies in two (2) different
forums for it does havoc to the rule on orderly procedure. Later,
in E. Razon Inc. vs. Philippine Port Authority, 62 We specifically
declared that forum-shopping is 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. Thus, the said rule has been formalized in
Section 17 of the Interim Rules and Guidelines issued by this Court
on 11 January 1983 in connection with the implementation of the
Judiciary Reorganization Act (Batas Pambansa Blg. 129). A review
of the cases on forum-shopping reveals, however, that they involve
parties filing two (2) or more suits in different forums. 63The rule
has not been extended to a defendant who, for reasons known only
to him, commences a new action against the plaintiff - instead of
filing a responsive pleading in the other case - setting forth therein,
as causes of action, specific denials, special and affirmative
defenses or even counterclaims. Thus, Velhagen's and King's motion
to dismiss Civil Case No. 91-2069 by no means negates the charge
of forum-shopping as such did not exist in the first place. chanroblesvirtualawlibrarychanrobles virtual law library
IN VIEW OF THE FOREGOING, the instant petition is hereby

GRANTED. The Order of respondent Court of 16 September 1991
dismissing Civil Case No. 91-2069 is SET ASIDE and a new one is
entered DISMISSING instead, on ground of lis pendens, Civil Case
No. 91-2192 of Branch 150 of the Regional Trial Court of Makati,
with costs against the defendants therein. The Order of respondent
Court of 22 January 1992 in Civil Case No. 91-2069 is hereby
MODIFIED by setting aside that portion thereof denying the motion
to reconsider its Order of 16 September 1991 and declaring that
portion denying the motion for consolidation as moot and
academic. chanroblesvirtualawlibrarychanrobles virtual law library
Cost against private respondents. chanroblesvirtualawlibrarychanrobles virtual law library
SO ORDERED.
G.R. Nos. 103442-45 May 21, 1993
NATIONAL POWER CORPORATION, ET AL., petitioners,

vs.
THE COURT OF APPEALS, GAUDENCIO C. RAYO, ET AL., respondents.
The Solicitor General for plaintiff-appellee.
Ponciano G. Hernandez for private respondents.
DAVIDE, JR., J.:

This is a petition for review on certiorari under Rule 45 of the Revised Rules of Court urging this
Court to set aside the 19 August 1991 consolidated Decision of the Court of Appeals in CA.-G.R. CV
Nos. 27290-93 which reversed the Decision of Branch 5 of the then Court of First Instance (now
1
Regional Trial Court) of Bulacan, and held petitioners National Power Corporation (NPC) and
Benjamin Chavez jointly and severally liable to the private respondents for actual and moral
damages, litigation expenses and attorney's fees.
This present controversy traces its beginnings to four (4) separate complaints for damages filed
2
against the NPC and Benjamin Chavez before the trial court. The plaintiffs therein, now private
respondents, sought to recover actual and other damages for the loss of lives and the destruction to
property caused by the inundation of the town of Norzagaray, Bulacan on 26-27 October 1978. The
flooding was purportedly caused by the negligent release by the defendants of water through the
spillways of the Angat Dam (Hydroelectric Plant). In said complaints, the plaintiffs alleged, inter alia,
that: 1) defendant NPC operated and maintained a multi-purpose hydroelectric plant in the Angat
River at Hilltop, Norzagaray, Bulacan; 2) defendant Benjamin Chavez was the plant supervisor at the
time of the incident in question; 3) despite the defendants' knowledge, as early as 24 October 1978,
of the impending entry of typhoon "Kading," they failed to exercise due diligence in monitoring the
water level at the dam; 4) when the said water level went beyond the maximum allowable limit at the
height of the typhoon, the defendants suddenly, negligently and recklessly opened three (3) of the
dam's spillways, thereby releasing a large amount of water which inundated the banks of the Angat
River; and 5) as a consequence, members of the household of the plaintiffs, together with their
animals, drowned, and their properties were washed away in the evening of 26 October and the
early hours of 27 October 1978. 3
In their Answers, the defendants, now petitioners, alleged that: 1) the NPC exercised due care,
diligence and prudence in the operation and maintenance of the hydroelectric plant; 2) the NPC
exercised the diligence of a good father in the selection of its employees; 3) written notices were
sent to the different municipalities of Bulacan warning the residents therein about the impending
release of a large volume of water with the onset of typhoon "Kading" and advise them to take the
necessary precautions; 4) the water released during the typhoon was needed to prevent the collapse
of the dam and avoid greater damage to people and property; 5) in spite of the precautions
undertaken and the diligence exercised, they could still not contain or control the flood that resulted
and; 6) the damages incurred by the private respondents were caused by a fortuitous event or force
majeure and are in the nature and character of damnum absque injuria. By way of special affirmative
defense, the defendants averred that the NPC cannot be sued because it performs a purely
governmental function. 4
Upon motion of the defendants, a preliminary hearing on the special defense was conducted. As a
result thereof, the trial court dismissed the complaints as against the NPC on the ground that the
provision of its charter allowing it to sue and be sued does not contemplate actions based on tort.
The parties do not, however, dispute the fact that this Court overruled the trial court and ordered the
reinstatement of the complaints as against the NPC. 5
Being closely interrelated, the cases were consolidated and trial thereafter ensued.
The lower court rendered its decision on 30 April 1990 dismissing the complaints "for lack of
sufficient and credible evidence." Consequently, the private respondents seasonably appealed
6
therefrom to the respondent Court which then docketed the cases as CA-G.R. CV Nos. 27290-93.
In its joint decision promulgated on 19 August 1991, the Court of Appeals reversed the appealed
decision and awarded damages in favor of the private respondents. The dispositive portion of the
decision reads:
CONFORMABLY TO THE FOREGOING, the joint decision appealed from is hereby
REVERSED and SET ASIDE, and a new one is hereby rendered:
1. In Civil Case No. SM-950, ordering defendants-appellees to pay, jointly and

severally, plaintiffs-appellants, with legal interest from the date when this decision
shall become final and executory, the following:
A. Actual damages, to wit:
1) Gaudencio C. Rayo, Two Hundred Thirty One Thousand Two

Hundred Sixty Pesos (P231,260.00);
2) Bienvenido P. Pascual, Two Hundred Four Thousand Five

Hundred Pesos (P204.500.00);
3) Tomas Manuel, One Hundred Fifty Five Thousand Pesos

(P155,000.00);
4) Pedro C. Bartolome, One Hundred Forty Seven Thousand Pesos

(P147,000.00);.
5) Bernardino Cruz, One Hundred Forty Three Thousand Five

Hundred Fifty Two Pesos and Fifty Centavos (P143,552.50);
6) Jose Palad, Fifty Seven Thousand Five Hundred Pesos

(P57,500.00);
7) Mariano S. Cruz, Forty Thousand Pesos (P40,000.00);
8) Lucio Fajardo, Twenty nine Thousand Eighty Pesos (P29,080.00);

and
B. Litigation expenses of Ten Thousand Pesos (P10,000.00);
2. In Civil case No. SM-951, ordering defendants-appellees to pay jointly and

severally, plaintiff-appellant, with legal interest from the date when this decision shall
have become final and executory, the following :
A. Actual damages of Five Hundred Twenty Thousand Pesos

(P520,000.00);.
B. Moral damages of five hundred Thousand Pesos (P500,000.00);

and.
C. Litigation expenses of Ten Thousand Pesos (P10,000.00);.
3. In Civil Case No. SM-953, ordering defendants-appellees to pay, jointly and

severally, with legal interest from the date when this decision shall have become final
and executory;
A. Plaintiff-appellant Angel C. Torres:
1) Actual damages of One Hundred Ninety Nine Thousand One Hundred Twenty
Pesos (P199,120.00);
2) Moral Damages of One Hundred Fifty Thousand Pesos (P150,000.00);
B. Plaintiff-appellant Norberto Torres:
1) Actual damages of Fifty Thousand Pesos (P50,000.00);
2) Moral damages of Fifty Thousand Pesos (P50,000.00);
C. Plaintiff-appellant Rodelio Joaquin:
1) Actual damages of One Hundred Thousand Pesos (P100,000.00);
2) Moral damages of One Hundred Thousand Pesos (P100,000.00);

and
D. Plaintifsf-appellants litigation expenses of Ten Thousand Pesos (P10,000.00);
4. In Civil case No. SM-1247, ordering defendants-appellees to pay, jointly and

severally, with legal interest from the date when this decision shall have become final
and executory :
A. Plaintiffs-appellants Presentacion Lorenzo and Clodualdo Lorenzo:
1) Actual damages of Two Hundred Fifty Six Thousand Six Hundred

Pesos (P256,600.00);
B. Plaintiff-appellant Consolacion Guzman :
1) Actual damages of One Hundred forty Thousand Pesos

(P140,000.00);
C. Plaintiff-appellant Virginia Guzman :
1) Actual damages of Two Hundred Five Hundred Twenty Pesos

(205,520.00); and
D. Plaintiffs-appellants litigation expenses of Ten Thousand Pesos (10,000.00).
In addition, in all the four (4) instant cases, ordering defendants-appellees to pay,
jointly and severally, plaintiffs-appellants attorney fees in an amount equivalent to
15% of the total amount awarded.
No pronouncement as to costs. 7
The foregoing judgment is based on the public respondent's conclusion that the petitioners were
guilty of:
. . . a patent gross and evident lack of foresight, imprudence and negligence . . . in

the management and operation of Angat Dam. The unholiness of the hour, the extent
of the opening of the spillways, And the magnitude of the water released, are all but
products of defendants-appellees' headlessness, slovenliness, and carelessness.
The resulting flash flood and inundation of even areas (sic) one (1) kilometer away
from the Angat River bank would have been avoided had defendants-appellees
prepared the Angat Dam by maintaining in the first place, a water elevation which
would allow room for the expected torrential rains. 8
This conclusion, in turn, is anchored on its findings of fact, to wit:
As early as October 21, 1978, defendants-appellees knew of the impending

onslaught of and imminent danger posed by typhoon "Kading". For as alleged by
defendants-appellees themselves, the coming of said super typhoon was bannered
by Bulletin Today, a newspaper of national circulation, on October 25, 1978, as
"Super Howler to hit R.P." The next day, October 26, 1978, said typhoon once again
merited a headline in said newspaper as "Kading's Big Blow expected this afternoon"
(Appellee's Brief, p. 6). Apart from the newspapers, defendants-appellees learned of
typhoon "Kading' through radio announcements (Civil Case No. SM-950, TSN,
Benjamin Chavez, December 4, 1984, pp. 7-9).
Defendants-appellees doubly knew that the Angat Dam can safely hold a normal
maximum headwater elevation of 217 meters (Appellee's brief, p. 12; Civil Case No.
SM-951, Exhibit "I-6"; Civil Case No. SM-953, Exhibit "J-6"; Civil Case No. SM-1247,
Exhibit "G-6").
Yet, despite such knowledge, defendants-appellees maintained a reservoir water

elevation even beyond its maximum and safe level, thereby giving no sufficient
allowance for the reservoir to contain the rain water that will inevitably be brought by
the coming typhoon.
On October 24, 1978, before typhoon "Kading" entered the Philippine area of
responsibility, water elevation ranged from 217.61 to 217.53, with very little opening
of the spillways, ranging from 1/2 to 1 meter. On October 25, 1978, when typhoon
"Kading" entered the Philippine area of responsibility, and public storm signal number
one was hoisted over Bulacan at 10:45 a.m., later raised to number two at 4:45 p.m.,
and then to number three at 10:45 p.m., water elevation ranged from 217.47 to
217.57, with very little opening of the spillways, ranging from 1/2 to 1 meter. On
October 26, 1978, when public storm signal number three remained hoisted over
Bulacan, the water elevation still remained at its maximum level of 217.00 to 218.00
with very little opening of the spillways ranging from 1/2 to 2 meters, until at or about
midnight, the spillways were suddenly opened at 5 meters, then increasing swiftly to
8, 10, 12, 12.5, 13, 13.5, 14, 14.5 in the early morning hours of October 27, 1978,
releasing water at the rate of 4,500 cubic meters per second, more or less. On
October 27, 1978, water elevation remained at a range of 218.30 to 217.05 (Civil
Case No. SM-950, Exhibits "D" and series, "L", "M", "N", and "O" and Exhibits "3"
and "4"; Civil Case No. SM-951, Exhibits "H" and "H-1"; Civil Case No. SM-953,
Exhibits "I" and "I-1"; Civil Case No. SM 1247, Exhibits "F" and "F-1").
xxx xxx xxx
From the mass of evidence extant in the record, We are convinced, and so hold that
the flash flood on October 27, 1978, was caused not by rain waters (sic), but by
stored waters (sic) suddenly and simultaneously released from the Angat Dam by
defendants-appellees, particularly from midnight of October 26, 1978 up to the
morning hours of October 27,
1978.9
The appellate court rejected the petitioners' defense that they had sent "early warning written
notices" to the towns of Norzagaray, Angat, Bustos, Plaridel, Baliwag and Calumpit dated 24 October
1978 which read:
TO ALL CONCERN (sic):
Please be informed that at present our reservoir (dam) is full and that we have been
releasing water intermittently for the past several days.
With the coming of typhoon "Rita" (Kading) we expect to release greater (sic) volume
of water, if it pass (sic) over our place.
In view of this kindly advise people residing along Angat River to keep alert and stay
in safe places.
BENJA
MIN L.
CHAVE
Z
Power
Plant
Superin
tendent
1
because:
Said notice was delivered to the "towns of Bulacan" on October 26, 1978 by
defendants-appellees driver, Leonardo Nepomuceno (Civil Case No. SM-950, TSN,
Benjamin Chavez, December 4, 1984, pp. 7-11 and TSN, Leonardo Nepomuceno,
March 7, 1985, pp. 10-12).
Said notice is ineffectual, insufficient and inadequate for purposes of the opening of
the spillway gates at midnight of October 26, 1978 and on October 27, 1978. It did
not prepare or warn the persons so served, for the volume of water to be released,
which turned out to be of such magnitude, that residents near or along the Angat
River, even those one (1) kilometer away, should have been advised to evacuate.
Said notice, addressed "TO ALL CONCERN (sic)," was delivered to a policeman
(Civil Case No. SM-950, pp. 10-12 and Exhibit "2-A") for the municipality of
Norzagaray. Said notice was not thus addressed and delivered to the proper and
responsible officials who could have disseminated the warning to the residents
directly affected. As for the municipality of Sta. Maria, where plaintiffs-appellants in
Civil Case No. SM-1246 reside, said notice does not appear to have been served. 11
Relying on Juan F. Nakpil & Sons vs. Court of Appeals, public respondent rejected the petitioners'
12
plea that the incident in question was caused by force majeure and that they are, therefore, not liable
to the private respondents for any kind of damage — such damage being in the nature of damnum
absque injuria.
The motion for reconsideration filed by the petitioners, as well as the motion to modify judgment filed
by the public respondents, were denied by the public respondent in its Resolution of 27 December
13
1991.14
Petitioners thus filed the instant petition on 21 February 1992.
After the Comment to the petition was filed by the private respondents and the Reply thereto was
filed by the petitioners, We gave due course to the petition on 17 June 1992 and directed the parties
to submit their respective Memoranda, which they subsequently complied with.
15
The petitioners raised the following errors allegedly committed by the respondent Court :
I. THE COURT OF APPEALS ERRED IN APPLYING THE RULING OF NAKPIL &

SONS V. COURT OF APPEALS AND HOLDING THAT PETITIONERS WERE
GUILTY OF NEGLIGENCE.
II. THE COURT OF APPEALS ERRED IN HOLDING THAT THE WRITTEN

NOTICES OF WARNING ISSUED BY PETITIONERS WERE INSUFFICIENT.
III. THE COURT OF APPEALS ERRED IN HOLDING THAT THE DAMAGE

SUFFERED BY PRIVATE RESPONDENTS WAS NOT DAMNUM ABSQUE
INJURIA.
IV. THE COURT OF APPEALS ERRED IN NOT AWARDING THE COUNTERCLAIM

OF PETITIONERS FOR ATTORNEY'S FEES AND EXPENSES OF LITIGATION. 16
These same errors were raised by herein petitioners in G.R. No. 96410, entitled National Power
Corporation, et al., vs. Court of Appeals, et al., which this Court decided on 3 July 1992. The said
17
case involved the very same incident subject of the instant petition. In no uncertain terms, We
declared therein that the proximate cause of the loss and damage sustained by the plaintiffs therein
— who were similarly situated as the private respondents herein — was the negligence of the
petitioners, and that the 24 October 1978 "early warning notice" supposedly sent to the affected
municipalities, the same notice involved in the case at bar, was insufficient. We thus cannot now rule
otherwise not only because such a decision binds this Court with respect to the cause of the
inundation of the town of Norzagaray, Bulacan on 26-27 October 1978 which resulted in the loss of
lives and the destruction to property in both cases, but also because of the fact that on the basis of
its meticulous analysis and evaluation of the evidence adduced by the parties in the cases subject of
CA-G.R. CV Nos. 27290-93, public respondent found as conclusively established that indeed, the
petitioners were guilty of "patent gross and evident lack of foresight, imprudence and negligence in
the management and operation of Angat Dam," and that "the extent of the opening of the spillways,
and the magnitude of the water released, are all but products of defendants-appellees'
headlessness, slovenliness, and carelessness." Its findings and conclusions are biding upon Us,
18
there being no showing of the existence of any of the exceptions to the general rule that findings of
fact of the Court of Appeals are conclusive upon this Court. Elsewise stated, the challenged
19
decision can stand on its own merits independently of Our decision in G.R. No. 96410. In any event,
We reiterate here in Our pronouncement in the latter case that Juan F. Nakpil & Sons vs. Court of
Appeals is still good law as far as the concurrent liability of an obligor in the case of force majeure is
20
concerned. In the Nakpil case, We held:
To exempt the obligor from liability under Article 1174 of the Civil Code, for a breach
of an obligation due to an "act of God," the following must concur: (a) the cause of
the breach of the obligation must be independent of the will of the debtor; (b) the
event must be either unforseeable or unavoidable; (c) the event must be such as to
render it impossible for the debtor to fulfill his obligation in a moral manner; and (d)
the debtor must be free from any participation in, or aggravation of the injury to the
creditor. (Vasquez v. Court of Appeals, 138 SCRA 553; Estrada v. Consolacion, 71
SCRA 423; Austria v. Court of Appeals, 39 SCRA 527; Republic of the Phil. v. Luzon
Stevedoring Corp., 21 SCRA 279; Lasam v. Smith, 45 Phil. 657).
Thus, if upon the happening of a fortuitous event or an act of God, there concurs a
corresponding fraud, negligence, delay or violation or contravention in any manner of
the tenor of the obligation as provided for in Article 1170 of the Civil Code, which
results in loss or damage, the obligor cannot escape liability.
The principle embodied in the act of God doctrine strictly requires that the act must
be one occasioned exclusively by the violence of nature and all human agencies are
to be excluded from creating or entering into the cause of the mischief. When the
effect, the cause of which is to be considered, is found to be in part the result of the
participation of man, whether it be from active intervention or neglect, or failure to
act, the whole occurrence is thereby humanized, as it were, and removed from the
rules applicable to the acts of God. (1 Corpus Juris, pp. 1174-1175).
Thus it has been held that when the negligence of a person concurs with an act of
God in producing a loss, such person is not exempt from liability by showing that the
immediate cause of the damage was the act of God. To be exempt from liability for
loss because of an act of God, he must be free from any previous negligence or
misconduct by which that loss or damage may have been occasioned. (Fish &
Elective Co. v. Phil. Motors, 55 Phil. 129; Tucker v. Milan, 49 O.G. 4379; Limpangco
& Sons v. Yangco Steamship Co., 34 Phil. 594, 604; Lasam v. Smith, 45 Phil. 657). 21
Accordingly, petitioners cannot be heard to invoke the act of God or force majeure to escape liability
for the loss or damage sustained by private respondents since they, the petitioners, were guilty of
negligence. The event then was not occasioned exclusively by an act of God or force majeure; a
human factor — negligence or imprudence — had intervened. The effect then of the force majeure in
question may be deemed to have, even if only partly, resulted from the participation of man. Thus,
the whole occurrence was thereby humanized, as it were, and removed from the laws applicable to
acts of God.
WHEREFORE, for want of merit, the instant petition is hereby DISMISSED and the Consolidated
Decision of the Court of Appeals in CA-G.R. CV Nos. 27290-93 is AFFIRMED, with costs against the
petitioners.
SO ORDERED.
G.R. No. L-45107 November 11, 1991
BENEDICTO RAMOS, petitioner,

vs.
HON. ELVIRO L. PERALTA, Presiding Judge, Branch XVII, Court of First Instance of Manila,
SPOUSES JUVENCIO ORTANEZ and JULIANA S. ORTANEZ, MINDANAO INSURANCE CO.,
INC. and P. R. ROMAN, INC.,respondents.
Angel Suntay, Jr. and Renato M. Coronado for petitioner.
Tolentino, Garcia, Cruz & Reyes for respondents Ortanez.
FERNAN, C.J.:
Put in issue in this petition for review on certiorari is the propriety of the dismissal by the then Court
of First Instance of (CFI) of Manila, Branch XVII of petitioner's action for consignation of the sum of
P70,000.00 representing advance rentals for the 101-hectare Salgado fishpond located in Bo. Balut,
Pilar, Bataan.
Petitioner started occupying the Salgado fishpond in 1964 by virtue of a lease contract executed in
his favor by private respondents spouses Juvencio and Juliana Ortanez. The original lease for a
term of five (5) years from January 1, 1964 to January 1, 1990, was renewed several times, the last
renewal being on June 28, 1974 under a "Kasunduan sa Pag-upa" for a period of three (3) years
starting January 1, 1975 to December 31, 1977.
Unknown to petitioner, title to said property was in the name of Philippine International Surety Co.,
1
Inc., a corporation founded, organized and 99.5%-owned by the Salgado spouses. Later renamed
Mindanao Insurance Co., Inc., said corporation was placed under receivership and liquidation on
2
June 20, 1968 in Civil Case No. Q-10664 of the then CFI of Rizal, Branch IV, Quezon City, upon
application of Insurance Commissioner Gregoria Cruz-Ansaldo who was appointed receiver.
Thereafter on February 23, 1976, respondent P. R. Roman, Inc. purchased from Mindanao
Insurance the Salgado fishpond for P950,000.00. The deed of sale was signed by the receiver and
duly approved by the liquidation court.
Apparently due to this development, the spouses Ortanez refused to accept from petitioner the
advance rentals on the fishpond due on March 15, 1976 in the amount of P30,000.00.
On or about May 1, 1976, petitioner received a letter from Don Pablo R. Roman informing him of the
latter's acquisition of the fishpond and intention to take possession thereof on May 16, 1976. In his
letter-reply, petitioner reminded Mr. Roman of his lease contract over the fishpond and refused to
consent to the intended take over. Notwithstanding petitioner's objection, P. R. Roman, Inc. took over
possession of the fishpond.
On August 2, 1976, petitioner filed before the CFI of Manila the aforesaid complaint, docketed as
Civil Case No. 103647, against private respondents Juvencio and Juliana Ortanez, Mindanao
3
Insurance and P. R. Roman, Inc. for consignation of the sum of P70,000.00 representing advance
rentals on the fishpond in the amounts of P30,000.00 and P40,000.00 respectively due on March 15,
1976 and June 15, 1976, which he had previously tendered to, but refused by the spouses Ortanez
and Pablo Roman.
P. R. Roman, Inc. filed a motion to dismiss on the grounds that venue was improperly laid, the
complaint states no cause of action and the court has no jurisdiction over the subject of the action or
suit. In its motion to dismiss, P. R. Roman, Inc. cited the pendency before the then CFI of Bataan of
Civil Case No 4102 instituted by P.R. Roman, Inc. against petitioner Benedicto Ramos on August 13,
1976 to quiet its title over the Salgado fishpond.
On August 27, 1976, respondent CFI of Manila issued an order dismissing Civil Case No. 103647, 4
stating in part:
Without discussing in detail the grounds mentioned above, the Court really sees that this
case should be dismissed not only insofar as against P. R. Roman, Inc. but also as against
the other defendants mentioned above for the reason, principally, that there is already a case
pending between the same parties and for the same cause in Civil Case No. 4102 of Branch
II of the Court of First Instance of Bataan, entitled P. R. Roman, Inc. vs. Benedicto
Roman, which is precisely for the ownership of the subject matter of the property allegedly
leased to the plaintiff herein (Exhibit "A"-Motion). In the said case, the defendant therein,
Benedicto Ramos, who is the plaintiff in the case at bar, filed a motion for leave to file a third-
party complaint against the spouses surnamed Ortanez and the Mindanao Insurance
Company Inc. All the issues respecting the fishpond, including the lease contract, are
necessarily involved in the case pending now in Bataan. Aside from the above, the Court
cannot decide this case because it cannot pre-empt the Court of Bataan on whether or nor
the P. R. Roman, Inc. is already the owner because if it finds that the said defendant P. R.
Roman, Inc. is really the owner of the fishpond, there is no more lease for which rentals are
to be paid.
Petitioner moved for reconsideration, but was unsuccessful, the court a quo, standing "pat on its
previous order and reiterat(ing) its dismissal of the case, without costs." 5
Hence this petition anchored on the following ascribed errors of law: 6
1. The respondent court erred in not holding that the only issue in consignation of funds is whether the defendant is willing to accept the proffered payment or not.
2. The respondent court erred in not holding that the prerogative of choosing the proper venue belongs to the plaintiff.
3. The respondent court erred in holding that the subsequent filing of Civil Case No. 4102 before the Court of First Instance of Bataan is a bar to the prosecution
of Civil Case No. 103647 before it.
Petitioner contends that the Bataan quieting-of-title Civil Case No. 4102 cannot serve as a bar to his Manila consignation Civil Case No. 103647 because they involve different
issues. Civil Case No. 4102 deals with the question of ownership while the only issue involved in his consignation case is whether or not the defendant is willing to accept the
proffered payment. In fact, petitioner posits, the action to quiet title is a useless futile exercise as he does not question P. R. Roman Inc.'s ownership of the fishpond under
consideration, but merely wishes to assert his leasehold and possessory rights over said property under the "Kasunduan sa Pag-upa." He further contends that compelling him
to litigate before the Bataan court would render nugatory his right as a plaintiff to choose the venue of his action. Besides, Civil Case No. 103647 was filed on August 2, 1976,
ahead of Civil Case No. 4102 which was filed on a much later date, August 13, 1976, after the Manila CFI had already acquired jurisdiction over Civil Case No. 103647.
Private respondents counter that the view taken by petitioner of the Manila consignation case is quite limited and bookish, because while it may be true that theoretically, the
main issue involved in a consignation case is whether or not the defendant is willing to accept the proffered payment, in the consignation case brought by petitioner, other
issues were pleaded by petitioner himself, such as the validity and binding effect of the lease contract and the existence of the supposed obligor-obligee relationship. They
further contend that a plaintiffs right of choice of venue is not absolute, but must invariably how to the dismissal of the case because of litis pendentia which, in refutation of
petitioner's argument, does not require that there is a prior pending action, merely that there is a pending action.
We find for respondents.
Under the rules and jurisprudence, for litis pendentia to be invoked as a ground for the dismissal of an action, the concurrence of the following requisites is necessary: (a) Identity of parties or at least such as represent the same interest 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. 7
These requisites are present in the case at bar. It is worthwhile mentioning that in his basic petition for review, one of the assigned errors of petitioner is that the respondent court erred in not holding that the parties in Civil Case No. 4102 are not the same as the
However, in his brief, no further mention of this assigned error was made; a clear
parties in Civil Case No. 103647. 8
indication of petitioner's admission of the identity of parties in Civil Case No. 4102 and Civil Case No.
103647, particularly as he filed a third party complaint in Civil Case No. 4102 against the spouses
Ortanez and Mindanao Insurance.
Anent the second element, we agree with private respondents' observation that petitioner's approach
to his consignation case is quite constricted. His contention that the only issue in a consignation
case is whether or not the defendant is willing to accept the proffered payment is true only where
there is no controversy with respect to the obligation sought to be discharged by such payment. His
consignation case, however, is not as simple. While ostensibly, the immediate relief sought for in his
consignation case is to compel therein defendants to accept his advance rentals, the ultimate
purpose of such action is to compel the new owner of the fishpond to recognize his leasehold rights
and right of occupation. In the last analysis, therefore, the issue involved in Civil Case No. 103647 is
the right of possession over the fishpond intertwined with the validity and effectivity of the lease
contract.
This is the same issue involved in Civil Case No. 4102. Although an action for quieting of title refers
to ownership, P. R. Roman, Inc. in its
complaint in Civil Case No. 4102 alleged:
9
5. There is a cloud on the aforesaid titles of plaintiff on the said agricultural land, marked
Annexes "A", "B" and "C" hereof, as well as on its right of possession over that real property
by reason of a certain "Kasunduan sa Pagupa" (Contract of Lease) dated June 28, 1974
executed by and between the spouses Jovencio Ortanez and Juliana S. Ortanez purportedly
as "may-ari/Nagpapaupa" (owner/lessor) and the defendant as lessee, which instrument is
apparently valid or effective but in truth and in fact invalid, ineffective, voidable or
unenforceable, and is prejudicial to the said titles of plaintiff as well as to its right of
possession over the same fishpond/agricultural land in Barrio Balut, Pilar, Bataan.
Thus, while the respondent court in the assailed order of dismissal dated August 27, 1976 described
Civil Case No. 4102 as "precisely for the ownership of the subject matter of the property allegedly
leased to the plaintiff herein," its order dated October 22, 1976 denying petitioner's motion for
10
reconsideration, more perceptively stated: 11
In Civil Case No. 4102 of the Court of First Instance of Bataan, entitled P. R. Roman, Inc. vs. Benedicto Ramos one of the principal issues is the possession of
the fishpond subject matter of the lease supposed rents of which are supposed to be consignated in the instant case, plaintiff P. R. Roman, Inc. there, claiming to
be entitled to the possession of said property as owner under a certificate of title and defendant Benedicto Ramos, plaintiff here, anchoring his claim of
possession upon his lease with the Ortanez spouses against whom, on his motion, he filed a third party complaint in which he prayed in the alternative, that
should he lose possession of the fishpond in favor of P. R. Roman, Inc., the Ortanezes should be condemned to reimburse him the rentals he has already paid for
the unexpired portion of the lease. The issue of whether or not the lease subsists even as regards P. R. Roman, Inc., for it is the view of Ramos that it bought the
property with knowledge of the lease, is squarely planted in the case before the Court of First Instance of Bataan, and, consequently, the more appropriate court
with which rents are to be consignated. . . .
That whatever decision may be handed down in Civil Case No. 4102 would constitute res judicata in Civil Case No. 103647 is beyond cavil. Should the Bataan court rule that
the lease contract is valid and effective against P. R. Roman, Inc., the petitioner can compel it to accept his proffered payment of rentals; otherwise, he may not do so.
Petitioner next contends that the dismissal of Civil Case No. 103647 deprived him of his right to choose the venue of his action. Verily, the rules on the venue of personal actions are laid down generally for the convenience of the plaintiff and his witnesses. But, as
observed by private respondents, this right given to the plaintiff is not immutable. It must yield to the greater interest of the orderly administration of justice, which as in this case, may call for the dismissal of an action on the basis of litis pendentia to obviate the
possibility of conflicting decisions being rendered by two different courts. 12
As private respondents would put it, "(T)he Rules of Court are not perfect. It does not pretend to be able to make everyone happy simultaneously or consecutively or all the time. Even the Rules of Court has hierarchy of values; thus, the choice of venue may bow
At any rate, petitioner cannot complain of any inconvenience arising from the
to dismissal of the case because of litis pendentia. 13
dismissal of Civil Case No. 103647. Being the defendant in Civil Case No. 4102, he cannot but
litigate before the Bataan court, and bringing his consignation case before the same court would
actually save him time, effort and litigation expenses.
Finally, the rule on litis pendentia does not require that the later case should yield to the earlier case.
What is required merely is that there be another pending action, not a prior pending action.
Considering the broader scope of inquiry involved in Civil Case No. 4102 and the location of the
property involved, no error was committed by the lower court in deferring to the Bataan court's
jurisdiction.
WHEREFORE, the assailed decision dated August 27, 1976 of the then Court of First Instance of
Manila, Branch XVII, is AFFIRMED in toto. This decision is immediately executory, with costs against
petitioner.
SO ORDERED.
[G.R. No. 122445. November 18, 1997]

DR. NINEVETCH CRUZ, petitioner, vs. COURT OF APPEALS and
LYDIA UMALI, respondents.
DECISION
FRANCISCO, J.:
"Doctors are protected by a special law. They are not guarantors of care. They do not
even warrant a good result. They are not insurers against mishap or unusual
consequences. Furthermore they are not liable for honest mistake of judgment" [1]
The present case against petitioner is in the nature of a medical

malpractice suit, which in simplest term is the type of claim which a victim has
available to him or her to redress a wrong committed by a medical
professional which has cause bodily harm. In this jurisdiction, however, such
[2]
claims are most often brought as a civil action for damages under Article 2176
of the Civil Code, and in some instances, as a criminal case under Article 365
[3]
of the Revised Penal Code with which the civil action for damages is
[4]
impliedly instituted. It is via the latter type of action that the heirs of the
deceased sought redress for the petitioner's alleged imprudence and
negligence in treating the deceased thereby causing her death. The petitioner
and one Dr. Lina Ercillo who was the attending anaesthesiologist during the
operation of the deceased were charged with "reckless imprudence and
negligence resulting to (sic) homicide" in an information which reads:
"That on or about March 23, 1991, in the City of San Pablo, Republic of the
Philippines and within the jurisdiction of this Honorable Court, the accused
abovenamed, being then the attending anaesthesiologist and surgeon, respectively, did
then and there, in a negligence (sic), careless, imprudent, and incompetent manner,
and failing to supply or store sufficient provisions and facilities necessary to meet any
and all exigencies apt to arise before, during and/or after a surgical operation causing
by such negligence, carelessness, imprudence, and incompetence, and causing by such
failure, including the lack of preparation and foresight needed to avert a tragedy, the
untimely death of said Lydia Umali on the day following said surgical operation." [5]
Trial ensued after both the petitioner and Dr. Lina Ercillo pleaded not guilty
to the above-mentioned charge. On March 4, 1994, the Municipal Trial Court
in Cities (MTCC) of San Pablo City rendered a decision, the dispositive
portion of which is hereunder quoted as follows:
"WHEREFORE, the court finds the accused Dr. Lina Ercillo not guilty of the offense
charged for insufficiency of evidence while her co-accused Dra. Ninevetch Cruz is
hereby held responsible for the death of Lydia Umali on March 24, 1991, and
therefore guilty under Art. 365 of the Revised Penal Code, and she is hereby
sentenced to suffer the penalty of 2 months and 1 day imprisonment of arresto mayor
with costs." [6]
The petitioner appealed her conviction to the Regional Trial Court (RTC) which
affirmed in toto the decision of the MTCC prompting the petitioner to file a
[7]
petition for review with the Court of Appeals but to no avail. Hence this petition
for review on certiorari assailing the decision promulgated by the Court of
Appeals on October 24, 1995 affirming petitioner's conviction with modification
that she is further directed to pay the heirs of Lydia Umali P50,000.00 as
indemnity for her death. [8]
In substance, the petition brought before this Court raises the issue of
whether or not petitioner's conviction of the crime of reckless imprudence
resulting in homicide, arising from an alleged medical malpractice, is
supported by the evidence on record.
First the antecedent facts.
On March 22, 1991, prosecution witness, Rowena Umali De Ocampo,
accompanied her mother to the Perpetual Help Clinic and General Hospital
situated in Balagtas Street, San Pablo City, Laguna. They arrived at the said
hospital at around 4:30 in the afternoon of the same day. Prior to March 22,
[9]
1991, Lydia was examined by the petitioner who found a "myoma" in her [10]
uterus, and scheduled her for a hysterectomy operation on March 23, 1991.
Rowena and her mother slept in the clinic on the evening of March 22, 1991
[11]
as the latter was to be operated on the next day at 1:00 o'clock in the
afternoon. According to Rowena, she noticed that the clinic was untidy and
[12]
the window and the floor were very dusty prompting her to ask the attendant
for a rag to wipe the window and the floor with. Because of the untidy state of
[13]
the clinic, Rowena tried to persuade her mother not to proceed with the
operation. The following day, before her mother was wheeled into the
[14]
operating room, Rowena asked the petitioner if the operation could be

postponed. The petitioner called Lydia into her office and the two had a
conversation. Lydia then informed Rowena that the petitioner told her that she
must be operated on as scheduled. [15]
Rowena and her other relatives, namely her husband, her sister and two
aunts waited outside the operating room while Lydia underwent operation.
While they were waiting, Dr. Ercillo went out of the operating room and
instructed them to buy tagamet ampules which Rowena's sister immediately
bought. About one hour had passed when Dr. Ercillo came out again this time
to ask them to buy blood for Lydia. They bought type "A" blood from the St.
Gerald Blood Bank and the same was brought by the attendant into the
operating room. After the lapse of a few hours, the petitioner informed them
that the operation was finished. The operating staff then went inside the
petitioner's clinic to take their snacks. Some thirty minutes after, Lydia was
brought out of the operating room in a stretcher and the petitioner asked
Rowena and the other relatives to buy additional blood for Lydia.
Unfortunately, they were not able to comply with petitioner's order as there
was no more type "A" blood available in the blood bank. Thereafter, a person
arrived to donate blood which was later transfused to Lydia. Rowena then
noticed her mother, who was attached to an oxygen tank, gasping for breath.
Apparently the oxygen supply had run out and Rowena's husband together
with the driver of the accused had to go to the San Pablo District Hospital to
get oxygen. Lydia was given the fresh supply of oxygen as soon as it arrived.
But at around 10:00 o'clock P.M. she went into shock and her blood
[16]
pressure dropped to 60/50. Lydia's unstable condition necessitated her

transfer to the San Pablo District Hospital so she could be connected to a
respirator and further examined. The transfer to the San Pablo City District
[17]
Hospital was without the prior consent of Rowena nor of the other relatives
present who found out about the intended transfer only when an ambulance
arrived to take Lydia to the San Pablo District Hospital. Rowena and her other
relatives then boarded a tricycle and followed the ambulance. [18]
Upon Lydia's arrival at the San Pablo District Hospital, she was wheeled
into the operating room and the petitioner and Dr. Ercillo re-operated on her
because there was blood oozing from the abdominal incision. The attending [19]
physicians summoned Dr. Bartolome Angeles, head of the Obstetrics and

Gynecology Department of the San Pablo District Hospital. However, when Dr.
Angeles arrived, Lydia was already in shock and possibly dead as her blood
pressure was already 0/0. Dr. Angeles then informed petitioner and Dr. Ercillo
that there was nothing he could do to help save the patient. While petitioner
[20]
was closing the abdominal wall, the patient died. Thus, on March 24, 1991,
[21]
at 3:00 o'clock in the morning, Lydia Umali was pronounced dead. Her death
certificate states "shock" as the immediate cause of death and "Disseminated
Intravascular Coagulation (DIC)" as the antecedent cause. [22]
In convicting the petitioner, the MTCC found the following circumstances

as sufficient basis to conclude that she was indeed negligent in the
performance of the operation:
"x x x, the clinic was untidy, there was lack of provision like blood and oxygen to
prepare for any contingency that might happen during the operation. The manner and
the fact that the patient was brought to the San Pablo District Hospital for reoperation
indicates that there was something wrong in the manner in which Dra. Cruz conducted
the operation. There was no showing that before the operation, accused Dr. Cruz had
conducted a cardio pulmonary clearance or any typing of the blood of the patient. It
was (sic) said in medical parlance that the "abdomen of the person is a temple of
surprises" because you do not know the whole thing the moment it was open (sic) and
surgeon must be prepared for any eventuality thereof. The patient (sic) chart which is
a public document was not presented because it is only there that we could determine
the condition of the patient before the surgery. The court also noticed in Exh. "F-1"
that the sister of the deceased wished to postpone the operation but the patient was
prevailed upon by Dra. Cruz to proceed with the surgery. The court finds that Lydia
Umali died because of the negligence and carelessness of the surgeon Dra. Ninevetch
Cruz because of loss of blood during the operation of the deceased for evident
unpreparedness and for lack of skill, the reason why the patient was brought for
operation at the San Pablo City District Hospital. As such, the surgeon should answer
for such negligence. With respect to Dra. Lina Ercillo, the anaesthesiologist, there is
no evidence to indicate that she should be held jointly liable with Dra. Cruz who
actually did the operation." [23]
The RTC reiterated the abovementioned findings of the MTCC and upheld
the latter's declaration of "incompetency, negligence and lack of foresight and
skill of appellant (herein petitioner) in handling the subject patient before and
after the operation." And likewise affirming the petitioner's conviction, the
[24]
Court of Appeals echoed similar observations, thus:
"x x x. While we may grant that the untidiness and filthiness of the clinic may not by
itself indicate negligence, it nevertheless shows the absence of due care and
supervision over her subordinate employees. Did this unsanitary condition permeate
the operating room? Were the surgical instruments properly sterilized? Could the
conditions in the OR have contributed to the infection of the patient? Only the
petitioner could answer these, but she opted not to testify. This could only give rise to
the presumption that she has nothing good to testify on her defense. Anyway, the
alleged "unverified statement of the prosecution witness" remains unchallenged and
unrebutted.
Likewise undisputed is the prosecution's version indicating the following facts: that
the accused asked the patient's relatives to buy Tagamet capsules while the operation
was already in progress; that after an hour, they were also asked to buy type "A" blood
for the patient; that after the surgery, they were again asked to procure more type "A"
blood, but such was not anymore available from the source; that the oxygen given to
the patient was empty; and that the son-in-law of the patient, together with a driver of
the petitioner, had to rush to the San Pablo City District Hospital to get the much-
needed oxygen. All these conclusively show that the petitioner had not prepared for
any unforeseen circumstances before going into the first surgery, which was not
emergency in nature, but was elective or pre-scheduled; she had no ready antibiotics,
no prepared blood, properly typed and cross-matched, and no sufficient oxygen
supply.
Moreover, there are a lot of questions that keep nagging Us. Was the patient given any
cardio-pulmonary clearance, or at least a clearance by an internist, which are standard
requirements before a patient is subjected to surgery. Did the petitioner determine as
part of the pre-operative evaluation, the bleeding parameters of the patient, such as
bleeding time and clotting time? There is no showing that these were done. The
petitioner just appears to have been in a hurry to perform the operation, even as the
family wanted the postponement to April 6, 1991. Obviously, she did not prepare the
patient; neither did she get the family's consent to the operation. Moreover, she did not
prepare a medical chart with instructions for the patient's care. If she did all these,
proof thereof should have been offered. But there is none. Indeed, these are
overwhelming evidence of recklessness and imprudence." [25]
This court, however, holds differently and finds the foregoing

circumstances insufficient to sustain a judgment of conviction against the
petitioner for the crime of reckless imprudence resulting in homicide. The
elements of reckless imprudence are: (1) that the offender does or fails to do
an act; (2) that the doing or the failure to do that act is voluntary; (3) that it be
without malice; (4) that material damage results from the reckless
imprudence; and (5) that there is inexcusable lack of precaution on the part of
the offender, taking into consideration his employment or occupation, degree
of intelligence, physical condition, and other circumstances regarding persons,
time and place.
Whether or not a physician has committed an "inexcusable lack of
precaution" in the treatment of his patient is to be determined according to the
standard of care observed by other members of the profession in good
standing under similar circumstances bearing in mind the advanced state of
the profession at the time of treatment or the present state of medical science.
In the recent case of Leonila Garcia-Rueda v. Wilfred L. Pacasio, et. al.,
[26]
this Court stated that in accepting a case, a doctor in effect represents that,
[27]
having the needed training and skill possessed by physicians and surgeons
practicing in the same field, he will employ such training, care and skill in the
treatment of his patients. He therefore has a duty to use at least the same
level of care that any other reasonably competent doctor would use to treat a
condition under the same circumstances. It is in this aspect of medical
malpractice that expert testimony is essential to establish not only the
standard of care of the profession but also that the physician's conduct in the
treatment and care falls below such standard. Further, inasmuch as the
[28]
causes of the injuries involved in malpractice actions are determinable only in

the light of scientific knowledge, it has been recognized that expert testimony
is usually necessary to support the conclusion as to causation. [29]
Immediately apparent from a review of the records of this case is the

absence of any expert testimony on the matter of the standard of care
employed by other physicians of good standing in the conduct of similar
operations. The prosecution's expert witnesses in the persons of Dr. Floresto
Arizala and Dr. Nieto Salvador, Jr. of the National Bureau of Investigation
(NBI) only testified as to the possible cause of death but did not venture to
illuminate the court on the matter of the standard of care that petitioner should
have exercised.
All three courts below bewail the inadequacy of the facilities of the clinic
and its untidiness; the lack of provisions such as blood, oxygen, and certain
medicines; the failure to subject the patient to a cardio-pulmonary test prior to
the operation; the omission of any form of blood typing before transfusion; and
even the subsequent transfer of Lydia to the San Pablo Hospital and the
reoperation performed on her by the petitioner. But while it may be true that
the circumstances pointed out by the courts below seemed beyond cavil to
constitute reckless imprudence on the part of the surgeon, this conclusion is
still best arrived at not through the educated surmises nor conjectures of
laymen, including judges, but by the unquestionable knowledge of expert
witnesses. For whether a physician or surgeon has exercised the requisite
degree of skill and care in the treatment of his patient is, in the generality of
cases, a matter of expert opinion. The deference of courts to the expert
[30]
opinion of qualified physicians stems from its realization that the latter
possess unusual technical skills which laymen in most instances are
incapable of intelligently evaluating. Expert testimony should have been
[31]
offered to prove that the circumstances cited by the courts below are
constitutive of conduct falling below the standard of care employed by other
physicians in good standing when performing the same operation. It must be
remembered that when the qualifications of a physician are admitted, as in the
instant case, there is an inevitable presumption that in proper cases he takes
the necessary precaution and employs the best of his knowledge and skill in
attending to his clients, unless the contrary is sufficiently established. This
[32]
presumption is rebuttable by expert opinion which is so sadly lacking in the

case at bench.
Even granting arguendo that the inadequacy of the facilities and untidiness
of the clinic; the lack of provisions; the failure to conduct pre-operation tests
on the patient; and the subsequent transfer of Lydia to the San Pablo Hospital
and the reoperation performed on her by the petitioner do indicate, even
without expert testimony, that petitioner was recklessly imprudent in the
exercise of her duties as a surgeon, no cogent proof exists that any of these
circumstances caused petitioner's death. Thus, the absence of the fourth
element of reckless imprudence: that the injury to the person or property was
a consequence of the reckless imprudence.
In litigations involving medical negligence, the plaintiff has the burden of
establishing appellant's negligence and for a reasonable conclusion of
negligence, there must be proof of breach of duty on the part of the
surgeon as well as a casual connection of such breach and the resulting
death of his patient. In Chan Lugay v. St Luke's Hospital, Inc., where the
[33] [34]
attending physician was absolved of liability for the death of the complainant's
wife and newborn baby, this court held that:
"In order that there may be a recovery for an injury, however, it must be shown that
the 'injury for which recovery is sought must be the legitimate consequence of the
wrong done; the connection between the negligence and the injury must be a direct
and natural sequence of events, unbroken by intervening efficient causes.' In other
words, the negligence must be the proximate cause of the injury. For, 'negligence, no
matter in what it consists, cannot create a right of action unless it is the proximate
cause of the injury complained of.' And 'the proximate cause of an injury is that cause,
which, in natural and continuous sequence, unbroken by any efficient intervening
cause, produces the injury, and without which the result would not have
occurred.''' (Underscoring supplied.)
[35]
Dr. Arizala who conducted an autopsy on the body of the deceased

summarized his findings as follows:
"Atty. Cachero:
Q. You mentioned about your Autopsy Report which has been marked as Exh. "A-1-b".
There appears here a signature above the typewritten name Floresto Arizala, Jr.,
whose signature is that?
A. That is my signature, sir.
Q. Do you affirm the truth of all the contents of Exh. "A-1-b"?
A. Only as to the autopsy report no. 91-09, the time and place and everything after the
post mortem findings, sir.
Q. You mentioned on your "Post Mortem Findings" about surgical incision, 14:0 cm.,
infraumbilical area, anterior abdominal area, midline, will you please explain that in
your own language?
A. There was incision wound (sic) the area just below the navel, sir.
Q. And the last paragraph of the postmortem findings which I read: Uterus, pear-
shaped and pale measuring 7.5 x 5.5 x 5.0 cm, with some surface nodulation of
the fundic area posteriorly. Cut-section shows diffusely pale myometrium with
areas of streak induration. The ovaries and adnexal structures are missing with the
raw surfaces patched with clotted blood. Surgical sutures were noted on the
operative site.
Intestines and mesenteries are pale with blood clots noted between the
mesentric folds.
Hemoperitonium: 300 s.s.,
right paracolic gutter,
50 c.c., left paracolic gutter
200 c.c., mesentric area,
100 c.c., right pelvic gutter
stomach empty.
Other visceral organs, pale.',
will you please explain that on (sic) your own language or in ordinary
A. There was a uterus which was not attached to the adnexal structures namely
ovaries which were not present and also sign of previous surgical operation and
there were (sic) clotted blood, sir.
Q. How about the ovaries and adnexal structures?
A. They are missing, sir.
Q. You mean to say there are no ovaries?
A. During that time there are no ovaries, sir.
Q. And there were likewise sign of surgical sutures?
A. Yes, sir.
Q. How about the intestines and mesenteries are place (sic) with blood clots noted
between the mesenteric folds, will you please explain on (sic) this?
A. In the peritoneal cavity, they are mostly perritonial blood.
Q. And what could have caused this blood?
A. Well, ordinarily blood is found inside the blood vessel. Blood were (sic) outside as a
result of the injuries which destroyed the integrity of the vessel allowing blood to
sip (sic) out, sir.
Q. By the nature of the postmortem findings indicated in Exh. A-1-B, can you tell the
court the cause of death?
A. Yes, sir. The cause of death is: Gross findings are compatible with hemorrhagic
shock.
Q. Can you tell the us what could have caused this hemorrhagic shock?
A. Well hemorrhagic shock is the result of blood loss.
Q. What could have the effect of that loss of blood?
A. Unattended hemorrhage, sir.[36] (Underscoring supplied.)
The foregoing was corroborated by Dr. Nieto Salvador:

"Q. And were you able to determine the cause of death by virtue of the examination of
the specimen submitted by Dr. Arizala?
A. Without knowledge of the autopsy findings it would be difficult for me to determine
the cause of death, sir.
Q. Have you examined the post mortem of Dr. Arizala?
A. Yes, sir, and by virtue of the autopsy report in connection with your pathology report.
Q. What could have caused the death of the victim?
A. This pathologic examination are (sic) compatible with the person who died, sir.
Q. Will you explain to us the meaning of hemorrhagic compatible?
A. It means that a person died of blood loss. Meaning a person died of non-
replacement of blood and so the victim before she died there was shock of
diminish of blood of the circulation. She died most probably before the actual
complete blood loss, sir.
Court: Is it possible doctor that the loss of the blood was due on (sic) operation?
A. Based on my pathology findings, sir.
Q. What could have caused this loss of blood?
A. Many, sir. A patient who have undergone surgery. Another may be a blood vessel
may be cut while on operation and this cause (sic) bleeding, or may be set in the
course of the operation, or may be (sic) he died after the operation. Of course
there are other cause (sic).
Atty. Cachero:
Q. Especially so doctor when there was no blood replacement?
A. Yes, sir."[37] (Underscoring supplied.)
The testimonies of both doctors establish hemorrhage or hemorrhagic

shock as the cause of death. However, as likewise testified to by the expert
witnesses in open court, hemorrhage or hemorrhagic shock during surgery
may be caused by several different factors. Thus, Dr. Salvador's elaboration
on the matter:
"Atty. Pascual:
Q. Doctor, among the causes of hemorrhage that you mentioned you said that it could
be at the moment of operation when one losses (sic) control of the presence, is
that correct? During the operation there is lost (sic) of control of the cut vessel?
A. Yes, sir.
Q. Or there is a failure to ligate a vessel of considerable size?
A. Yes, sir.
Q. Or even if the vessel were ligated the knot may have slipped later on?
A. Yes, sir.
Q. And you also mentioned that it may be possible also to some clotting defect, is
that correct?
A. May be (sic)."[38] (Underscoring supplied).
Defense witness, Dr. Bu C. Castro also gave the following expert opinion:
"Q. Doctor even a patient after an operations (sic) would suffer hemorrage what would
be the possible causes of such hemorrage (sic)?
A. Among those would be what we call Intravascular Coagulation and this is the reason
for the bleeding, sir, which cannot be prevented by anyone, it will happen to
anyone, anytime and to any persons (sic), sir.
COURT:
What do you think of the cause of the bleeding, the cutting or the operations done in
the body?
A. Not related to this one, the bleeding here is not related to any cutting or operation
that I (sic) have done.
Q. Aside from the DIC what could another causes (sic) that could be the cause for the
hemorrhage or bleeding in a patient by an operations (sic)?
A. In general sir, if there was an operations (sic) and it is possible that the ligature in
the suture was (sic) become (sic) loose, it is (sic) becomes loose if proven.
xxxxxxxxx
Q. If the person who performed an autopsy does not find any untight (sic) clot (sic)
blood vessel or any suture that become (sic) loose the cause of the bleeding could
not be attributed to the fault of the subject?
A. Definitely, sir."[39] (Underscoring supplied.)
According to both doctors, the possible causes of hemorrhage during an

operation are: (1) the failure of the surgeon to tie or suture a cut blood vessel;
(2) allowing a cut blood vessel to get out of control; (3) the subsequent
loosening of the tie or suture applied to a cut blood vessel; and (4) and a
clotting defect known as DIC. It is significant to state at this juncture that the
autopsy conducted by Dr. Arizala on the body of Lydia did not reveal any
untied or unsutured cut blood vessel nor was there any indication that the tie
or suture of a cut blood vessel had become loose thereby causing the
hemorrhage. Hence the following pertinent portion of Dr. Arizala's testimony:
[40]
"Q: Doctor, in examining these structures did you know whether these were sutured
ligature or plain ligature
A: Ligature, sir.
Q: We will explain that later on. Did you recall if the cut structures were tied by first
suturing it and then tying a knot or the tie was merely placed around the cut
structure and tied?
A: I cannot recall, sir.
Q: As a matter of fact, you cannot recall because you did not even bothered (sic) to
examine, is that correct?
A: Well, I bothered enough to know that they were sutured, sir.
Q: So, therefore, Doctor, you would not know whether any of the cut structures were
not sutured or tied neither were you able to determine whether any loose suture
was found in the peritoneal cavity?
A: I could not recall any loose sutured (sic), sir."[41]
On the other hand, the findings of all three doctors do not preclude the
probability that DIC caused the hemorrhage and consequently, Lydia's death.
DIC which is a clotting defect creates a serious bleeding tendency and when
massive DIC occurs as a complication of surgery leaving raw surface, major
hemorrhage occurs. And as testified to by defense witness, Dr. Bu C. Castro,
[42]
hemorrhage due to DIC "cannot be prevented, it will happen to anyone,

anytime." He testified further:
[43]
"Q. Now, under the circumstance one of the possibility as you mentioned in (sic) DIC?
A. Yes, sir.
Q. And you mentioned that it cannot be prevented?
A. Yes, sir.
Q. Can you even predict if it really happen (sic)?
A. Possible, sir.
Q. Are there any specific findings of autopsy that will tell you whether this patient
suffered among such things as DIC?
A. Well, I did reserve because of the condition of the patient.
Q. Now, Doctor you said that you went through the record of the deceased Lydia Umali
looking for the chart, the operated (sic) records, the post mortem findings on the
histophanic (sic) examination based on your examination of record, doctor, can
you more or less says (sic) what part are (sic) concerned could have been the
caused (sic) of death of this Lydia Umali?
A. As far as the medical record is concern (sic) the caused (sic) of death is
dessimulated (sic) Intra Vascular Coagulation or the DIC which resulted to
hemorrhage or bleedings, sir.
Q. Doctor based on your findings then there is knowing (sic) the doctor would say
whether the doctor her (sic) has been (sic) fault?
ATTY. MALVEDA:
We will moved (sic) to strike out the (sic) based on finding they just read the chart as
well as the other record.
ATTY. PASCUAL:
Precisely based on this examination.
ATTY. MALVEDA:
Not finding, there was no finding made.
COURT:
He is only reading the record.
ATTY. PASCUAL:
Yes, sir.
A. No, sir, there is no fault on the part of the surgeon, sir." [44]
This court has no recourse but to rely on the expert testimonies rendered
by both prosecution and defense witnesses that substantiate rather than
contradict petitioner's allegation that the cause of Lydia's death was DIC
which, as attested to by an expert witness, cannot be attributed to the
petitioner's fault or negligence. The probability that Lydia's death was caused
by DIC was unrebutted during trial and has engendered in the mind of this
Court a reasonable doubt as to the petitioner's guilt. Thus, her acquittal of the
crime of reckless imprudence resulting in homicide. While we condole with the
family of Lydia Umali, our hands are bound by the dictates of justice and fair
dealing which hold inviolable the right of an accused to be presumed innocent
until proven guilty beyond reasonable doubt. Nevertheless, this Court finds the
petitioner civilly liable for the death of Lydia Umali, for while a conviction of a
crime requires proof beyond reasonable doubt, only a preponderance of
evidence is required to establish civil liability. [45]
The petitioner is a doctor in whose hands a patient puts his life and limb.
For insufficiency of evidence this Court was not able to render a sentence of
conviction but it is not blind to the reckless and imprudent manner in which the
petitioner carried out her duties. A precious life has been lost and the
circumstances leading thereto exacerbated the grief of those left behind. The
heirs of the deceased continue to feel the loss of their mother up to the
present time and this Court is aware that no amount of compassion and
[46]
commiseration nor words of bereavement can suffice to assuage the sorrow
felt for the loss of a loved one. Certainly, the award of moral and exemplary
damages in favor of the heirs of Lydia Umali are proper in the instant case.
WHEREFORE, premises considered, petitioner DR. NINEVETCH CRUZ is
hereby ACQUITTED of the crime of reckless imprudence resulting in homicide
but is ordered to pay the heirs of the deceased Lydia Umali the amount of
FIFTY THOUSAND PESOS (P50,000.00) as civil liability, ONE HUNDRED
THOUSAND PESOS (P100,000.00) as moral damages, and FIFTY
THOUSAND PESOS (P50,000.00) as exemplary damages.
Let the copy of this decision be furnished to the Professional Regulation
Commission (PRC) for appropriate action.
SO ORDERED.
[G.R. No. 103476. November 18, 1999]
CODIDI MATA, CELESTINO, LUCIA, INGRACIO, PIO, MARCELO,

MELETON, RICARDA, PAGAKAN, and CARING, all surnamed
MATA, and duly represented by their attorney-in-fact ISIDRO
SEMBRANO, petitioners, vs. COURT OF APPEALS and HEIRS OF
CLARO L. LAURETA, respondents.
DECISION
KAPUNAN, J.:
The instant case is the fourth case that reached this Court involving the same
parties and property.
In this case, the heirs of Marcos Mata (petitioners) seek the reversal of the
decision, dated 31 July 1991, of the Court of Appeals in CA-G.R. SP No. 24434,
permanently enjoining the Regional Trial Court, Branch 1, Tagum, Davao City, from
proceeding with Civil Case No. 2468, an action to enforce petitioners' right to
repurchase the subject lot under Section 119 of the Public Land Act (Commonwealth
Act No. 141, as amended).
The antecedent facts are as follows:
Sometime in 1940, spouses Marcos and Codidi Mata, members of a non-christian
cultural minority in Davao and predecessors-in-interest of petitioners, were granted a
homestead patent over a parcel of land situated in Tagum, Davao del Norte containing
an area of 4.5777 hectares. Original Certificate of Title No. 3019 covering the subject
lot was issued in their favor.
On 10 June 1945, Marcos Mata (Mata) executed a Deed of Absolute Sale
conveying the ownership of the subject lot in favor of Claro L. Laureta the
predecessor-in-interest of private respondents. On 10 May 1947, Mata executed
another document selling the same property to Fermin Caram, Jr. (Caram), who
caused the cancellation of OCT No. 3019. In lieu thereof, Transfer Certificate of Title
No. 140 was issued in Caram's name.
On 25 June 1956, Laureta filed before the Court of First Instance of Tagum (now
RTC) an action, docketed as Civil Case No. 3083, to declare the first sale of the
subject lot in his favor valid and the second sale thereof to Caram void.
On 29 February 1964, the CFI of Tagum rendered judgment as follows:
"WHEREFORE, judgment is hereby rendered:

1. Declaring that the deed of sale, Exhibit A, executed by Marcos Mata in favor
of Claro L. Laureta stands and prevails over the deed of sale, Exhibit F, in favor
of Fermin Caram, Jr.;
2. Declaring as null and void the deed of sale, Exhibit F, in favor of Fermin
Caram, Jr.;
3. Directing Marcos Mata to acknowledge the deed of sale, Exhibit A, in favor
of Claro L. Laureta;
4. Directing Claro L. Laureta to secure the approval of the Secretary of
Agriculture and Natural Resources on the deed, Exhibit A, after Marcos Mata
shall have acknowledge the same before a notary public;
5. Directing Claro L. Laureta to surrender to the Register of Deeds for the City
and Province of Davao the Owner's Duplicate of Original Certificate of Title
No. 3019 and the latter to cancel the same;
6. Ordering the Register of Deeds for the City and Province of Davao to cancel
Transfer Certificate of Title No. T-140 in the name of Fermin Caram, Jr.;
7. Directing the Register of Deeds for the City and Province of Davao to issue a
title in favor of Claro L. Laureta, Filipino, resident of Quezon City, upon
presentation of the deed executed by Marcos Mata in his favor, Exhibit A, duly
acknowledge by him and approved by the Secretary of Agriculture and Natural
Resources; and
8. Dismissing the counterclaim and crossclaim of Marcos Mata and Codidi
Mata, the counterclaim of Caram, Jr., the answer in intervention, counterclaim
and crossclaim of the Mansacas."[1]
On appeal by the spouses Mata and Caram, the CA affirmed the aforesaid decision
of the CFI. Two (2) separate petitions for review were then filed by the Matas and
Caram with this Court. The petition filed by the spouses Mata, docketed as G.R. No.
L-29147, was dismissed by the Court for lack of merit on 20 June 1968. Said decision
became final and executory on 26 July 1968. Upon the other hand, the petition filed
by Caram, docketed as G.R. No. L-28740, was dismissed by the Court on 24 February
1981.[2] Said decision became final and executory on 12 February 1982.
Meanwhile, on 23 February 1979, spouses Mata filed with the Court of First
Instance (now RTC), Branch 1 of Tagum, Davao del Norte, Civil Case No. 1071
against the Lauretas for recovery of ownership and possession of the subject lot. The
spouses Mata alleged that the deed of sale executed between Mata and Laureta
involving the subject lot is null and void and/or unenforceable because the same had
not been approved by the Secretary of Agriculture and Natural Resources as required
by law and as directed by the CFI of Davao in its decision of 29 February 1964 in
Civil Case No. 3083, and that said decision could no longer be executed as the same
had already prescribed.
On 12 February 1983, an alias writ of execution was issued by the CFI enforcing
its decision in Civil Case No. 3083. By then, Mata was already dead while his heirs
(petitioners) refused to acknowledge the deed of sale in accordance with the said
decision. In lieu of the requisite acknowledgement, the officer-in-charge of the court
(now RTC, Branch VIII, Davao City) certified and affirmed the due execution of the
deed of sale executed between Mata and Laureta. Thereafter, on 21 February 1984, the
deed of absolute sale in favor of Laureta was duly approved by the Minister of Natural
Resources. Finally, on 9 May 1985, TCT No. T-46346 covering the subject lot was
issued in the name of Laureta.
On 20 April 1983, the RTC rendered judgment in Civil Case No. 1071 declaring,
among others, that the decision in Civil Case No. 3083 in favor of private respondents
had "become stale and unenforceable due to prescription." It ordered the return of the
ownership of the subject lot to petitioners.
On appeal by private respondents, the CA affirmed in toto the CFI decision in
Civil Case No. 1071. The case was then elevated to the Supreme Court which
reversed and set aside the decision of the CA.Speaking through Justice Regalado, the
Court, in its decision[3] in G.R. No. 72194 promulgated on 5 April 1990, ruled that the
execution of the judgment in Civil Case No. 3083 was not time-barred because the
ten-year period for the execution of the judgment in Civil Case No. 3083 commenced
to run only on 12 February 1982 when the decision denying Caram's petition became
final and executory .
Upon the belief that they could still exercise their right to repurchase the subject
lot under the Public Land Act, on 22 November 1990, petitioners filed with the RTC,
Branch 1 of Tagum, Davao City, an action against private respondents for legal
redemption, reconveyance and consignation, docketed as Civil Case No. 2468.
Maintaining that Civil Case No. 2468 would render nugatory and ineffectual the
decision of the court in G.R. No. 72194, private respondents instituted with this Court
a petition for injunction and prohibition seeking, among others, to restrain the trial
court from proceeding with said case. On 11 March 1991, this Court referred the same
to the CA for resolution.
The CA ruled in favor of private respondents and permanently enjoined the RTC
from further proceeding with Civil Case No. 2468. The CA categorically declared that
petitioners' right to repurchase the subject lot under the Public Land Act had already
prescribed.[4] Petitioners filed a motion for reconsideration but it was denied by the CA
in its resolution, dated 12 November 1991.
Aggrieved, the petitioners filed the instant Petition for review alleging in the main
that respondent CA erred in holding that petitioners right to repurchase the subject
property under Section 119 of the Public Land Act had already prescribed.
After the parties have submitted their respective pleadings, this Court issued a
resolution, dated 5 September 1994, denying the petition for review for failure of the
petitioners to sufficiently show that respondent court committed any reversible error
in rendering the assailed decision.
Upon petitioners motion for reconsideration, dated 27 September 1994, however,
this Court, in its resolution, dated 24 October 1994, reinstated the instant petition,
gave due course to the same and directed the parties to file their respective
memoranda.
In their petition, the fundamental issue raised by petitioners is whether or not they
could still exercise their right to repurchase the subject lot under the Public Land
Act. In their motion for reconsideration and memorandum, however, petitioners
question the validity of the sale of the subject lot to Laureta. They contend that said
sale was void because the document evidencing the same was written in English, a
language not understood by the vendor, and that it was not approved by the Office for
the Southern Cultural Communities (OSCC) in violation of Section 4(n), Republic Act
No. 1888, as amended, in relation to Section 120 of the Public Land Act.
Subsequently, the various pleadings separately filed by petitioners themselves, on
one hand, and Atty. Rodolfo U. Jimenez, their counsel, and Isidro Sembrano, their
purported attorney-in-fact, on the other hand, have left this Court baffled as to
petitioners real stand on the matter. Thus:
1. In a Manifestation with Motion, dated 23 November 1995, filed by petitioners

themselves without the assistance of their counsel, the informed the Court that they
have agreed to an amicable settlement of the case with private respondents. In view
thereof, they prayed that they be allowed to withdraw their petition. Attached to the
said Manifestation with Motion were petitioners letters, dated 23 November 1995,
addressed to their attorney-in-fact (Isidro Sembrano) and to their counsel-on-record
(Attys. Winston F. Garcia and Rodolfo U. Jimenez), informing them of the
termination of their services. The amicable settlement, of even date, purportedly
signed by all the petitioners and private respondents attorney-in-fact, was also
attached to the said Manifestation with Motion.
2. On 15 January 1996, Celestino Mata and Andres Basaca filed with the Court their
respective affidavits, dated 30 December 1995. Celestino Mata, one of petitioners,
claimed that he is the same person referred to as Lucino Mata who was made to sign
the Manifestation with Motion, the letters terminating the services of the attorney-in-
fact and the lawyers, and the amicable settlement, all dated 23 November
1995. Celestino Mata averred that he did not understand the contents of these
documents and that his signatures thereon were obtained by fraud.
3. For his part, Alfredo Basaca assailed the authority of Arcadio Mata Pasindo to sign
the amicable settlement on behalf of the heirs of Marcos and Codidi Mata. While
Alfredo Basaca asserted that he is one of the heirs of the spouses Mata, however, the
records show that he is not named as one of the petitioners in this case.
4. The Court, in its Resolution, dated 26 February 1996, directed the petitioners and
Atty. Jimenez to comment on and/or confirm the Manifestation with Motion of 23
November 1995. In compliance therewith, Atty. Jimenez filed his Comment, dated 29
March 1996, informing the Court that he was not consulted by petitioners when they
filed said Manifestation with Motion. He urged the Court to decide the case on the
merits.
5. Upon the other hand, most of the petitioners, namely Calrita Mata Pasindo, Julieta
Mata Abundo, Engracio Mata, Dagakan Mata vda. de Cuanas, Marcelo Mata,
Severino Antolihao, Arcadio Mata Pasindo, Lucia Mata Antolihao and Meliton Mata,
filed their Manifestation with Motion (to Comment and/or Confirm), dated 27 March
1996. They affirmed their respective signatures on the Manifestation with Motion of
23 November 1995 and the attachments thereto and averred that they understood the
contents thereof as these were fully explained to them in the presence of the
Provincial Officer of the OSCC in Tagum, Davao. They reiterated their prayer that
they be allowed to withdraw their petition.
6. On 5 September 1996, Isidro Sembrano submitted to this Court a Joint Affidavit of

petitioners Ceelstino Mata and Ricarda Mata, dated 21 February 1996, claiming,
among others, that they were deceived into signing the amicable settlement. On 10
January 1997, Isidro Sembrano submitted a Joint Affidavit of Rosendo Mata-Pasindo,
Carmelita Mata-Pasindo, Wlfredo Mata and Julieta Mata-Abundio, dated 9 January
1997, again claiming that they were deceived into signing the amicable
settlement. Curiously, however, except for Julieta Mata-Abundio, the three (3) other
affiants, namely, Rosendo Mata-Pasindo, Carmelita Mata-Pasindo and Wilfredo Mata,
were not signatories to the amicable settlement.
7. On 23 June 1997, petitioners filed with the Court their Joint Affidavit, dated 26
May 1997, reiterating their Manifestation with Motion of 23 November 1995. They
manifested in the Joint Affidavit that they voluntarily signed the amicable settlement
and reiterated their prayer that they be allowed to withdraw their petition. In support
of said Joint Affidavit, petitioners attached thereto the report of Mr. Romero A. Maing,
the Provincial Officer of the OSCC in Tagum, Davao, dated 10 February, regarding an
investigation he conducted on 3 February 1997 attended by petitioners. Mr. Maing
attested that petitioners categorically denied having been coerced, forced or
intimidated into signing the amicable settlement. Upon Mr. Maing's query, petitioners
expressed their desire to proceed with the amicable settlement of the case.
8. Thereafter, Atty. Jimenez filed a motion, dated 25 August 1997, urging this Court to
resolve the petition. He also filed a Motion to Require Personal Appearance of
Petitioners before the OSCC to Verify their Final Stand on the Petition, dated 29
September 1997. In said motion, Atty. Jimenez admitted that he had only been in
contact with the attorney-in-fact of petitioners and never with petitioners themselves.
9. Private respondents then filed a Motion to Dismiss Petition, dated 10 September

1997. Petitioners likewise filed an Opposition to Motion to Resolve Petition Filed by
attorney Rodolfo U. Jimenez as Counsel for Petitioners, dated 1 October 1997. In said
opposition, signed by all the petitioners themselves, they reiterated that the amicable
settlement of 23 November 1995 was their own free and voluntary act. They
explained that although it was written in English, the contents thereof were translated
and fully explained to them in the dialect known to and understood by them. With
regard to their relationship to Attorney Jimenez, petitioners denied that they
personally engaged him to represent them in this case. It was allegedly only Isidro
Sembrano, acting on his own, who engaged Atty. Jimenez legal services. At any rate,
having terminated the same on 23 November 1995, petitioners claimed that Atty.
Jimenez no longer had any authority to represent them in the case. Petitioners
reiterated their prayer that they be allowed to withdraw their petition. The Provincial
Officer of the OSCC in Tagum, Davao issued a Certification, dated 3 October 1997,
attesting that the contents of said opposition were fully explained to petitioners in
their dialect.
10. In a resolution, dated 10 December 1997, the Court required Atty. Jimenez to file
his comment on said opposition. In compliance therewith, Atty. Jimenez averred in his
comment, dated 5 February 1998, that he is merely protecting the interests of
petitioners and urged this Court to resolve the case on the merits. A few months later,
said counsel filed the Motion for Leave to File Attached Joint Affidavit of Some of the
Petitioners, dated 1 June 1998. The Joint Affidavit, dated 20 March 1998, purportedly
executed by six (6) affiants, namely, Arcadio M. Pasindo, Julieta M. Abundio,
Celestino Mata, Clarita M. Pasindo, Marcelo Mata and Ricarda vda. de Ayonan,
averred that they are retracting their statements contained in the Manifestation with
Motion, dated 23 November 1995, and its attachments, and in the Opposition to
Motion to Resolve Petition Filed by Atty. Rodolfo Jimenez as counsel for petitioners,
dated 1 October 1997.
11. The affiants in said Joint Affidavit claimed that they were deceived into signing
and/or affixing their thumbmarks on the said pleadings and documents. They stated
that they are no longer withdrawing their petition and urged the Court to resolve it on
the merits. A careful perusal of the said Joint Affidavit shows that petitioners Marcelo
Mata and Ricarda vda. de Ayonan did not personally affix their respective signatures
thereon. Rather, two (2) other persons signed above their names although it does not
appear that they had been duly authorized by petitioners Marcelo Mata and Ricarda
vda. de Ayonan to do so.
12. Petitioners thereafter filed their Opposition, dated 4 November 1998, to Atty.
Jimenez Motion to Resolve petition. Attached to the said opposition is a Clarificatory
Affidavit, dated 26 August 1998, executed by the petitioners except Celestino Mata
and Clarita Mata Pasindo, who did not affix their respective signatures thereon. In said
affidavit, affiants accused Isidro Sembrano and Atty. Manuel Iral, Chief of the Legal
Division of the Central Office of the OSCC of having conspired with each other and
deceived some of the petitioners into signing the Joint Affidavit, dated 20 March
1998, and retracting their statements in the Manifestation with Motion, dated 23
November 1995. Affiants affirmed that they voluntarily signed said Manifestation
with Motion and its attached documents including the amicable settlement. They
likewise maintained that Isidro Sembrano is no longer authorized to act on their behalf
and that Atty. Jimenez no longer had any authority to represent them in this
case. Petitioners once again sought this Court's approval of their amicable settlement.
13. On 1 March 1999, Atty. Jimenez submitted to this Court an Investigation Report,
dated 14 January 1999, purportedly prepared by Atty. Iral in his capacity as Chief of
the Legal Division of the present National Commission on Indigenous
People. Attached to the report were the Panunumpa, both dated 11 January 1999, of
petitioners Celestino Mata and Clarita Mata-Pasindo. These affiants affirmed the
retraction of their signatures on the Manifestation with Motion, dated 23 November
1995, claiming that they did not understand its contents. They likewise affirmed the
appointment of Isidro Sembrano and Atty. Jimenez as their attorney-in-fact and
counsel, respectively.
Given the dizzying and seeemingly interminable equivocation in the stance of the
petitioners vis--vis the proposed amicable settlement of 23 November 1995, we are
constrained to disregard the same and proceed with the resolution of the case on the
merits.
I
As stated earlier, in their Motion for Reconsideration and Memorandum,
petitioners harp on the alleged nullity of the deed of sale executed between Mata and
Laureta in 1945 on the ground that it was written in English, a language not
understood by the former, and that it was not approved by the OSCC in violation of
Section 4(n), Republic Act No. 1888, as amended, in relation to Section 120 of the
Public Land Act. The issue of the validity or nullity of the aforesaid deed of sale,
however, had already been passed upon by this Court in the case of Caram, Jr. vs.
Laureta,[5] the first case decided at length by this Court involving the subject
property. Previously, another petition filed by Mata questioning the decision of the CA
which upheld the sale of the subject property to Laureta was dismissed by this Court
on 24 February 1981.
In the Caram case, the issue raised was which sale was valid considering that
Mata sold the same property twice: first to Laureta and later on to Caram. We upheld
therein the validity of the sale in favor of Laureta as we affirmed the findings of the
lower court to the effect that while the sale to Laureta was voidable, as it was procured
by force, the same "was cured when, after the lapse of four years from the time the
intimidation ceased, Marcos Mata lost both his rights to file an action for annulment
or set up the nullity of the contract as a defense in an action to enforce the same." [6] We
stated therein that "the first sale in favor of Laureta prevails over the sale in favor of
Caram."[7] This pronouncement cannot be construed in any other way but that the
Court affirmed the validity of the sale of the subject property in favor of Laureta as
against the sale of the same to Caram, which we categorically declared as void.
Then again, in the case of Heirs of Claro L. Laureta vs. Intermediate
Appellate Court,[8] this Court ordered the dismissal of Civil Case No. 1071 filed by
petitioners. It must be noted that in their complaint therein, petitioners also raised the
issue of the nullity of the deed of sale executed between Mata and Laureta on the
ground that, among others, it had not been approved by the then Secretary of
Agriculture and Natural Resources as required by law. Thus, by ordering the dismissal
of Civil Case No. 1071, we, in effect, upheld anew the validity of the sale of the
subject property in favor of Laureta. In the said decision, we likewise allowed private
respondents to proceed with the execution of the judgment in Civil Case No. 3083 as
the same was not yet time-barred.
The foregoing rulings in the earlier related cases, which had long attained finality,
upholding the validity of the sale of the subject property in favor of Laureta
effectively foreclose any further inquiry as to its validity. This is in consonance with
the doctrine of res judicata as embodied in Rule 39, Section 47 of the Rules of Court:
"Sec. 47. Effect of judgments or final orders. The effect of a judgment or final
order rendered by a court of the Philippines, having jurisdiction to pronounce
the judgment or final order, may be as follows:
(a) x x x
(b) In other cases, the judgment or final order is, with respect to the matter
directly adjudged or as to any other matter that could have been raised in
relation thereto, conclusive between the parties and their successors in interest
by title subsequent to the commencement of the action or special proceeding,
litigating for the same thing and under the same title and in the same capacity:
and
(c) In any other litigation between the same parties or their successors in
interest, that only is deemed to have been adjudged in a former judgment or
final order which appears upon its face to have been so adjudged , or which was
actually and necessarily included therein or necessary thereto."
The doctrine of res judicata actually embraces two (2) concepts: the first is "bar
by prior judgment" under paragraph (b) of Rule 39, Section 47, and the second is
"conclusiveness of judgment" under paragraph (c) thereof. [9] In the present case, the
second concept conclusiveness of judgment applies. The said concept is explained in
this manner:
"[A] fact or question which was in issue in a former suit and was there
judicially passed upon and determined by a court of competent jurisdiction, is
conclusively settled by the judgment therein as far as the parties to that action
and persons in privity with them are concerned and cannot be again litigated in
any future action between such parties or their privies, in the same court or any
other court of concurrent jurisdiction on either the same or different cause of
action, while the judgment remains unreversed by proper authority. It has been
held that in order that a judgment in one action can be conclusion as to a
particular matter in another action between the same parties or their privies, it is
essential that the issue be identical. If a particular point or question is in issue in
the second action, and the judgment will depend on the determination of that
particular point or question, a former judgment between the same parties or
their privies will be final and conclusive in the second if that same point or
question was in issue and adjudicated in the first suit. x x x."[10]
Although the action instituted by petitioners in the lower court in this case (action
for reconveyance) is different from the actions they instituted in the earlier cases, the
concept of conclusiveness of judgment still applies because under this principle "the
identity of causes of action is not required but merely identity of issues." [11]
Simply put, conclusiveness of judgment bars the relitigation of particular facts or
issues in another litigation between the same parties on a different claim or cause of
action. In Lopez vs. Reyes,[12] weexpounded on the concept of conclusiveness of
judgment as follows:
"The general rule precluding the relitigation of material facts or questions
which were in issue and adjudicated in former action are commonly
applied to all matters essentially connected with the subject matter of
litigation. Thus it 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. Under this rule, if the record of the former
trial shows that the judgment could not have been rendered without
deciding the particular matter, it will be considered as having settled that
matter as to all future actions between the parties, and if a judgment
necessarily presupposes certain premises, they are as conclusive as the
judgment itself. Reasons for the rule are that a judgment is an adjudication on
all the matters which are essential to support it, and that every proposition
assumed or decided by the court leading up to the final conclusion and upon
which such conclusion is based is as effectually passed upon as the ultimate
question which is solved."[13]
There is no question that the issue of the validity or nullity of the sale of the
subject property in favor of Laureta had already been passed upon by this Court
in Caram, where we categorically pronounced that the sale in favor of Laureta
prevails over that of Caram, which we declared void, and in Laureta, where we stated
that private respondents may still validly proceed with the execution of the decision in
Civil Case No. 3083. Caram became final and executory on 12 February 1982
while Laureta on 5 July 1990. Applying the rule on conclusiveness of judgment, the
matter may no longer be relitigated in this case.
As held in Legarda vs. Savellano[14]
"It is a general rule common to all civilized system of jurisprudence, that the
solemn and deliberate sentence of the law, pronounced by its appointed organs,
upon a disputed fact or a state of facts, should be regarded as a final and
conclusive determination of the question litigated, and should forever set the
controversy at rest. Indeed, it has been well said that this maxim is more than a
mere rule of law, more than an important principle of public policy: and that it
is not too much to say that it is a fundamental concept in the organization of the
jural sytem. Public policy and sound practice demand that, at the risk of
occasional errors, judgments of courts should become final at some definite
date fixed by law. The very object for which courts were constituted was to put
an end to controversies."[15]
II
The next issue is whether or not petitioners can still validly exercise their right to
repurchase the subject property pursuant to Section 119 of the Public Land Act:
"Sec. 119. Every conveyance of land acquired under the free patent or homestead
provisions, when proper, shall be subject to repurchase by the applicant, his widow, or
legal heirs, within a period of five (5) years from date of conveyance,"
The term "conveyance" imports the transfer of legal title from one person to
another. It usually takes place upon the execution of the deed purporting to transfer
the ownership of the land as the same is already valid and binding against the parties
thereto even without the act of registration. The registration is intended to protect the
buyer against claims of third parties against subsequent alienations by the vendor, and
is certainly not necessary to give effect, as between the parties, to their deed of
sale. Thus, for the purpose of reckoning the five-year period to exercise the right to
repurchase, the date of conveyance is construed to refer to the date of the execution of
the deed transferring the ownership of the land to the buyer. [16]
In this case, Mata conveyed the ownership of the subject property to Laureta by
virtue of a Deed of Absolute Sale, dated 10 June 1945. Petitioners, as heirs of Marcos
Mata, filed the action for reconveyance (Civil Case No. 2468) on 24 November
1990. From this date up to the time of the filing of the action for reconveyance, more
than forty-five (45) years had lapsed. Clearly, petitioners right to redeem the subject
property had already prescribed by the time they went to court. As correctly pointed
out by the CA, if the five-year period to repurchase were to be reckoned from 12
February 1982, the date of finality of our decision in the Caram case[17] where we
declared that the sale in favor of Laureta prevails over that in favor of Caram,
prescription of the right to repurchase had set in.
The same conclusion would obtain even if the running of the five-year period
were to start from 9 May 1985, when Transfer Certificate of Title No. T-46346
covering the subject property was issued in favor Laureta after the sale in his favor
was approved by the Minister of Natural Resources in accordance with the decision in
Civil Case No. 3083, petitioners action to repurchase the subject property would still
be time-barred, as more than five (5) years had already lapsed.
Petitioners further argue that the five-year period should be reckoned from
September 1990, when the decision of this Court in Laureta[18] allegedly became final
and executory. Petitioners maintain that prior to the said date, they could not exercise
their right to repurchase since the issue of its ownership was still then under
litigation. This contention is without merit. As earlier discussed, the act of conveyance
within the meaning of the Section 119 of the Public Land Act had already been made
long before the finality of our decision in Laureta. At any rate, said case resolved an
entirely different issue, i.e., whether or not private respondents motion for execution
of the judgment in Civil Case No. 3083 was time-barred. Accordingly, the CA
correctly ordered the dismissal of petitioners action for reconveyance on ground of
prescription.
III
With respect to the procedural issue raised by petitioners, i.e., whether the CA
erred in granting private respondents petition for injunction as it had allegedly the
effect of disposing the case without trial on the merits, suffice it to say that since
private respondents right to injunctive relief was clear, the CA properly granted the
same. The CA, likewise, correctly ordered the dismissal of Civil Case No. 2468 as the
records of the case clearly showed that petitioners right to repurchase had already
prescribed. A trial on the merits thereon would serve no other purpose and would only
result in needless delay.
Indeed, this controversy has already dragged on for more than half a century, it is,
thus, high time that we write finis to it.
"x x x (L)itigations must end and terminate sometime and somewhere, it being
essential to the effective administration of justice that once judgment has become
final, the winning party be not, through a mere subterfuge, deprived of the fruits of the
verdict. Hence, courts must guard themselves against any scheme to bring about that
result, for constituted a they are to put an end to controversies, they should frown
upon any attempt to prolong it. Public policy and sound practice demand that at the
risk of occasional errors, judgments of courts should become final and irrevocable at
some definite date fixed by law.Interes rei publicae ut finis sit litium. xxx."[19]
WHEREFORE, premises considered, the petition is hereby DENIED and the

assailed decision of the respondent Court of Appeals is AFFIRMED.
SO ORDERED.
HEIRS OF WENCESLAO TABIA, G.R. Nos. 129377 & 129399

SPOUSES ERLINDO MAMONONG
and VIRGINIA DE LUMBAN, HEIRS
OF MANUEL SOMO and FELICIDAD Present:
SOCORRO, SPOUSES NICANOR
OSORIO and MARIETTA DE LEON,
SPOUSES MAXIMINO PEREZ and QUISUMBING, J,.
JOVITA LADUB, HEIRS OF THE Chairperson,
SPOUSES JUAN RABACA and CARPIO,
CRISTINA BADIOLA, JULIANA CARPIO MORALES,
ANSAY, MACRA BADILLO, ROSALIA TINGA, and
RABIE and HEIRS OF PEPING VELASCO, JR., JJ.
MERCADO and CONCORDIA
ABAYARI,
Petitioners, Promulgated:
February 22, 2007
- versus -
COURT OF APPEALS, ABRAHAM

DELA CRUZ and DIRECTOR OF
LANDS ABELARDO PALAD, JR.,
Respondents.
x----------------------------------------------------------------------------x
DECISION
TINGA, J.:
Before this Court are two Petitions for Review[1] both filed under Rule 45 of the
Revised Rules of Court assailing the 29 November 1996 Decision, [2] as well as the
4 June 1997 Resolution[3] of the 8th Division of the Court of Appeals in CA-G.R.
CV No. 39205, which affirmed the 31 August 1992 Order [4] of the Regional Trial
Court of Sta. Cruz, Laguna in Civil Case No. SC-2852 and denied reconsideration
thereof, respectively.
On 16 April 1991, Francisco, Amparo, Rosita, Araceli and Teresita, all

surnamed Tabia; Yolanda, Roynilo, Tomas, Jr., Domingo, Carlito and Augustus, all
surnamed Aonuevo; Susan, Jojo, and Wilma, all surnamed Cacalda; and Danilo,
Moises, Jr., Ramon and Roberto, all surnamed Paraiso (herein petitioners) filed a
complaint, docketed as Civil Case No. SC-2852, for Annulment of Free Patent No.
DENR IV-FP No. 00002P and Damages and/or Reconveyance of Title with the
Regional Trial Court (RTC) of Laguna against Abraham dela Cruz (dela Cruz),
representing the heirs of Antonina Rabie, and Abelardo G. Palad, Jr., Director of
Lands.
The case arose from a Decision [5] rendered by the Director of Lands on 1 February
1989 in B.L. Claim No. 288(n), the dispositive portion of which reads:
WHEREFORE, the claim of the Heirs of Wenceslao Tabia

represented by Narciso Tabia, et al[.] is hereby dismissed and this case,
dropped from the records. Within the period of sixty (60) days from
finality hereof, the [petitioners] shall remove their improvements from
the land and shall vacate the premises thereof. The Free Patent
Application (Unnumbered) of AntoninaRabie, represented by Abraham
dela Cruz, is hereby amended to exclude therefrom the portions occupied
by the Provincial Road and Lumban Elementary School. As thus
amended the same shall be given further due course.
SO ORDERED.[6]
The subject matter of B.L. Claim No. 288(n) was Lot No. 1430 situated
at Lumban, Laguna. It appears that on 21 October 1984, dela Cruz, in behalf of the
heirs of the deceased Antonina Rabie, applied for a free patent with the Bureau of
Lands (now Lands Management Bureau) covering said lot.[7] Petitioners filed their
respective protests and/or oppositions to said application, alleging ownership and
possession for over 50 years, and lack of jurisdiction by the Bureau of Lands
inasmuch as the subject property had become private land.[8] An ocular inspection
was conducted by the Bureau of Lands in the presence of all the parties claimants.
Thereafter, the Director of the Bureau of Lands rendered the Decision quoted
above.
Petitioners filed a motion for reconsideration but the same was denied by the
Director of Lands in his Order, dated 27 June 1989.[9] The matter was brought by
petitioners to the Secretary of Agriculture and Natural Resources. The appeal,
however, was dismissed by the Secretary in his Order of 27 December 1989, for
failure of petitioners to file an appeal memorandum. [10] Accordingly, Free Patent
No. DENR IV-FP No. 00002P and Original Certificate of Title No. P-9927 were
issued in favor of and in the name of dela Cruz on 26 October 1990.[11]
In Civil Case No. SC-2852, petitioners accused the Director of Lands of

unlawful conspiracy with dela Cruz and gross ignorance of the law in issuing the 1
February 1989decision. They claimed that the decision was obtained through
misrepresentation of facts and pursuant to a conspiracy for some unlawful and
illegal consideration. They further claimed damages, attorneys fees and litigation
expenses.
Dela Cruz filed a Motion to Dismiss[12] Civil Case No. SC-2852 on the
following grounds: (1) lack of jurisdiction, and (2) bar by prior judgment. On the
other hand, the Director of Lands, through the Office of the Solicitor General, filed
an Answer.[13] Petitioners filed a Motion for Admission of/and Opposition to
Motion to Dismiss.[14]
On 19 August 1991, the trial court resolved to deny the motion to dismiss.
[15]
Meanwhile, dela Cruz filed a Reply[16] to petitioners Opposition to the Motion to
Dismiss.
On 7 May 1992, dela Cruz filed a Motion for Reconsideration of the 19

August 1991 Order of the trial court.[17] On 31 August 1992, the trial court granted
reconsideration and dismissed the complaint.[18]
The trial court noted the Director of Lands exhaustive findings of fact and
conclusions of law. It held that petitioners failure to exploit the available
administrative remedy of appeal to the Secretary of Agriculture and Natural
Resources rendered the decision of the Director of Lands final and executory.
Consequently, the filing of Civil Case No. SC-2852 was deemed premature for
failure to exhaust administrative remedies. Further, the decision of the Director of
Lands having become final, res judicata operated to preclude the trial court from
assuming jurisdiction. The trial court further found that petitioners were precluded
from questioning the jurisdiction of the Director of Lands because they voluntarily
submitted themselves to said jurisdiction by actively participating in B.L. Claim
No. 288(n). Finally, it held that the decision of the Director of Lands was supported
by substantial evidence.
On 11 September 1992, petitioners filed with the trial court a Notice of

Appeal to the Court of Appeals of the Order dated 31 August 1992.[19] On 16
September 1992, the records of the case were ordered forwarded to the Court
of Appeals.[20]
On 29 November 1996, the Court of Appeals rendered a Decision affirming

the Order of the trial court.[21] The appellate court stressed the fact that the matters
raised by petitioner in Civil Case No. SC-2852 were the same matters raised in
their protests filed in B.L. Claim No. 288(n).
Petitioners filed a motion for reconsideration of the 29 November 1996 Decision of
the Court of Appeals but the same was denied on 4 June 1997.[22] Hence, petitioners
filed the instant Petitions for Review.
The grounds relied upon by the trial court and the Court of Appeals in
granting the Motion to Dismiss filed by dela Cruz in Civil Case No. SC-2852 were
the following: (1) finality of the Director of Lands findings of facts; (2) failure of
petitioners to exhaust administrative remedies; and (3) res judicata. All the
grounds relied upon by the trial court and the Court of Appeals are all meritorious.
Petitioners foremost contention is anchored on the Director of Lands alleged

disregard of a supposedly undisputed factual matter, which is that Wenceslao Tabia
and the predecessors-in-interest of petitioners, had been in open, continuous,
exclusive, and notorious possession and occupation of Lot No. 1430 for a period of
more than fifty (50) years, and by virtue of this possession, they are the owners of
the said lot, to the exclusion of dela Cruz. It is on this basis that they seek the
annulment of Free Patent No. DENR IV-FP No. 00002P which, it was alleged, was
fraudulently issued to dela Cruz who misrepresented himself as the actual
possessor of the land.
A determination of the validity of petitioners claim necessitates a review of the

factual findings of the Director of Lands. However, in petitions such as the one in the
case at bar, pure questions of fact may not be the proper subject of appeal by certiorari
under Rule 45 of the Revised Rules of Court as this mode of appeal is generally confined
only to questions of law.[23] Further, findings of the Director of Lands as to questions of
fact shall be conclusive when approved by the Secretary of Agriculture and Natural
Resources.[24] In this case, the dismissal of petitioners appeal with the Secretary of
Agriculture and Natural Resources had the effect of rendering the decision of the Director
of Lands final and executory.
The factual findings of the Director of Lands assume an even more

conclusive character because they were affirmed by both the Regional Trial Court
and the Court of Appeals. Their reliance on the factual findings of the Director of
Lands is not without reason. By reason of his special knowledge and expertise over
matters falling under his jurisdiction, he is in a better position to pass judgment
thereon. Thus, his factual findings in that regard are generally accorded great
respect, if not finality, by the courts, as long as they are supported by substantial
evidence, even if such evidence might not be overwhelming or even
preponderant. It is not the task of an appellate court to weigh once more the
evidence submitted before the administrative body and to substitute its own
judgment for that of the administrative agency in respect of sufficiency of
evidence.[25]
Petitioners cannot fault the Director of Lands for not appreciating the Deeds
of Sale[26] allegedly executed by and between Glicerio Tabia (the immediate heir of
Wenceslao Tabia) and the parents of dela Cruz for the reason that said documents
were not presented in B.L. Claim No. 288(n). They presented said documents only
in Civil Case No. SC-2852. Thus, the Director of Lands, in his Answer to the
Complaint, denied petitioners allegation to the effect that the parents of dela Cruz
bought portions of Lot No. 1430 from Glicerio Tabia. [27] Further, considering that
the Deeds of Sale were allegedly dated 1951, there was no reason for their non-
production or presentation in B.L. Claim No. 288(n). Failure to submit evidence
could only mean that if produced, it would have been adverse to petitioners case.
[28]
If the inability to produce it was due to their counsels negligence or omission,
the same would bind petitioners.
It is worth mentioning that the bulk of the evidence presented in support of

their protest to dela Cruzs application for free patent consisted mainly of the
following documents: (1) tax declarations, the earliest of which is for the year
1945; (2) Deeds of Sale; (3) Deeds of Partition; and (4) Payment Receipts. The
transactions evidenced by the Deeds of Sale, the earliest of which is dated 1958,
show the chain of transfer from Glicerio Tabia to the predecessors-in-interest of
petitioners. On this score, the Director of Lands ruled:
Wenceslao Tabia is neither a survey-claimant nor owner of the

land in question and the same cannot form part of his estate which
could be validly transmitted to his heirs by succession. The extra-
judicial partition of the land, confirmatory deed of sale and deed of sale
executed by the Heirs of Wenceslao Tabia are, therefore, null and void
because they have not acquired any right to the land in question.
xxx
[Petitioners] anchored their right to, and interest in, the land by virtue of
the sale executed by the heirs of Wenceslao Tabia and alleged continuous
possession of their respective portions. As earlier mentioned, Tabia was
not the owner of the land in question and as such, he has nothing to
transmit to his heirs. Corrorarily,[sic] his heirs has [sic] nothing to
sell in favor of the [petitioners].[29] [Emphasis supplied.]
On the other hand, the conclusions of the Director of Lands were drawn from
affidavits, public documents and records,[30] as well as the results of the ocular
inspection conducted.
On petitioners failure to exhaust administrative remedies, the trial court aptly

held that petitioners were, in effect, seeking a review of the decision of the Director
of Lands which was the basis for the issuance of the free patent. Since what is
being disputed is an action of an administrative agency, in consonance with the
principle of exhaustion of administrative remedy, the concerned agency should be
given the opportunity to correct itself before the intervention of the court is sought.
There is a further requirement that the party with an administrative remedy must
not merely initiate the prescribed administrative procedure to obtain relief, but
must also pursue it to its appropriate conclusion before seeking judicial
intervention.[31]
Petitioners in the instant case did not fully exploit the administrative remedies
available to them. In fact, they were responsible for the dismissal of their appeal
before the Secretary of Agriculture and Natural Resource. It should be remembered
that their failure to file an appeal memorandum was the cause for the dismissal of
their appeal. They did not even question the dismissal by the Secretary of
Agriculture and Natural Resource. Indeed, by their own neglect and grave
omission they allowed the Decision of the Director of Lands to become final and
executory, a matter that they could no longer question in Civil Case No. SC-2852.
While the rule on exhaustion of administrative remedies has recognized

exceptions, [32] none of them obtains in the case at bar.
On the third ground relied upon for granting the Motion to Dismiss, we
agree with the trial court that the doctrine of res judicata operates to bar the filing
of Civil Case No. SC-2852.
We have held that the rule of res judicata which forbids the reopening of a
matter once judicially determined by competent authority applies as well to the
judicial and quasi-judicial acts of public, executive or administrative officers and
boards acting within their jurisdiction as to the judgments of courts having general
judicial powers.[33] The Director of Lands is a quasi-judicial officer. [34] As such
officer, his decisions and orders rendered pursuant to his quasi-judicial authority,
have upon their finality, the force and binding effect of a final judgment within the
purview of the doctrine of res judicata.[35]
Res judicata comprehends two distinct concepts: (1) bar by former judgment
and (2) conclusiveness of judgment. In the case at bar, where there is no identity of
causes of action, but only an identity of issues, there exists res judicata in the
concept of conclusiveness of judgment. Thus, the issues in B.L. Claim No. 288(n)
of prior possession of Lot No. 1430 as well as the sufficiency of the evidence
supporting the Director of Lands conclusion may no longer be relitigated.
The issues now remaining for the Court to resolve do not detract from the
conclusion that the dismissal of Civil Case No. SC-2852 is proper. The issues are:
(1) whether petitioners have the legal personality to institute the action for
annulment of the free patent and/or reconveyance; (2) whether the Director of
Lands had jurisdiction to award the free patent to dela Cruz; and (3) whether a
constructive trust was created in favor of petitioners when the free patent was
awarded to dela Cruz.
The first issue is the personality of petitioners to bring the action for
annulment of Free Patent No. DENR IV-FP No. 00002P. Suffice it to say that since
the land in this case was public land prior to the issuance of the free patent, the
only party who could question that grant is the government, represented by the
Solicitor General. The free patent is a grant by the government, acting through the
Director of Lands. Thus, the cancellation thereof is a matter between the grantor
and the grantee.[36]
On the issue of jurisdiction, there is no question that the Director of Lands had
jurisdiction over B.L. Claim No. 288(n). Under Commonwealth Act (C.A.) No.
141, or the Public Land Law, the Director of Lands has jurisdiction, authority and
control over public lands.[37] Section 4 of C.A. No. 141 states:
Sec. 4. Subject to said control, the Director of Lands shall have

direct executive control of the survey, classification, lease, sale or any
other form of concession or disposition and management of the lands
of the public domain, and his decisions as to questions of fact shall be
conclusive when approved by the Secretary of Agriculture and Natural
Resources. [Emphasis supplied.]
The alleged pendency of a cadastral case involving Lot No. 1430 is not at all
inconsistent with the Director of Lands exercise of jurisdiction in B.L. Claim No.
288(n). In fact, the assumption underlying the initiation of cadastral registration
proceedings is that the parcels of land covered by the cadastral proceedings are
public lands and it is up to the claimants as oppositors to plead and prove
otherwise. Precisely, the cadastral proceedings is an innovation which was
conceived to hasten and accelerate registration of lands with the Director of Lands,
not the claimants, initiating the proceedings. [38] Since there is no showing that the
cadastral case adjudicated Lot No. 1430 in favor of one of the claimants therein, it
may still be presumed to be land of the public domain under the jurisdiction of the
Director of Lands.
If public purpose is to encourage land registration for lands to be covered by

the Torrens System and considering further that the cadastral proceedings has
remained pending and unresolved since 1930, the Director of Lands properly
entertained dela Cruzs application for free patent.
Furthermore, the effect of registration of a homestead or any similar patent and the
issuance of a duplicate certificate of title to the patentee is to vest in him an
incontestable title to the land, in the same manner as if ownership had been
determined by final decree of the court.[39] Thus, in the case at bar, the issuance
of Original Certificate of Title No. P-9927 operates to take Lot No. 1430 out of that
mass of public land that could be the proper subject of cadastral registration
proceedings.
Petitioners alternative prayer for reconveyance of Lot No. 1430 based on the
principle of constructive trust[40] must likewise fail considering that their claimed
ownership of Lot No. 1430 was found to be without basis. Under this principle,
registration of property by one person in his name, whether by mistake or fraud,
the real owner being another person, impresses upon the title so acquired the
character of a constructive trust for the real owner, which would justify an action
for reconveyance.[41] The essence of an action for reconveyance is that the decree
of registration is respected as incontrovertible but what is sought instead is the
transfer of the property which has been wrongfully or erroneously registered in
another persons name, to its rightful owner or to one with a better right. [42] Clearly,
not being the owners of Lot No. 1430, petitioners cannot ask for reconveyance of
the property to them under the principle of constructive trust.
WHEREFORE, premises considered, the petition are hereby DENIED.
The 29 November 1996 Decision and the 4 June 1997 Resolution of the Court of
Appeals in CA-G.R. CV No. 39205 are hereby AFFIRMED.
Costs against petitioners.
SO ORDERED.
FIRST DIVISION
[G.R. NO. 166781 : September 5, 2006]
ALEJANDRO MORAGA, represented by ENRIQUE MORAGA, Petitioner, v. SPOUSES JULIAN and

FELICIDAD SOMO, Spouses REYNALDO and CARMELITA FERNANDEZ and GIL and HERMINIGILDA
SAN DIEGO, Respondents.
DECISION
CHICO-NAZARIO, J.:
This Petition for Review under Rule 45 of the Rules of Court, filed by petitioner Enrique Moraga, seeks to
nullify and set aside the 23 April 2004 Decision1 and 11 January 2005 Resolution of the Court of Appeals in
CA-G.R. SP No. 70051 which reversed and set aside the Decision of the Department of Agrarian Reform
Adjudication Board (DARAB) in DARAB Case No. 5086 dated 11 January 2001.
The property in dispute is a parcel of agricultural land consisting of 1.7467 hectares which is located in
Pandayan, Meycauayan, Bulacan, and covered under Transfer Certificate of Title (TCT) No. T-5926 in the
name of Victoriano Ipapo who died on 6 June 1976. This property was tenanted by Alejandro Moraga, the
deceased father of petitioner Enrique Moraga.
On 7 March 1973, Victoriano Ipapo sold the landholding to his daughters Felicidad, Carmelita, and
Herminigilda, and their respective spouses, Julian Somo, Reynaldo Fernandez and Gil San Diego
(respondents) for P10,000.00 per Bilihan Tuluyan of even date.
Inasmuch as an affidavit of consent of the tenant is required by the agrarian laws in the transfer of title,
Alejandro Moraga on 19 November 1979 executed a Sinumpaang Salaysay admitting that he had knowledge
and consent of the sale. Thus, on 19 November 1979, a new certificate of title over the disputed land, TCT
No. T-29031 (M), was issued in favor of the respondents.
Unknown to respondents, on 22 July 1981, a Certificate of Land Transfer (CLT) No. 0-042737 was issued in
favor of Alejandro Moraga for the same parcel of agricultural land. On the basis of such CLT, Alejandro
Moraga, on 3 November 1993, filed an application for the issuance of Emancipation Patent (EP) over the
land in question before the Provincial Assessor of Bulacan. Apparently, respondents belatedly filed a written
protest of the application since on 16 September 1993, EP No. 496453 was granted to Alejandro Moraga,
and pursuant to which TCT No. EP-108(M) was likewise issued in his favor.
On 11 October 1993, respondents filed with the DARAB a complaint for Cancellation of the Certificate of
Land Transfer and the Emancipation Patent and for Ejectment against Enrique and Mercedes Moraga
(Moragas), the surviving heirs of the late Alejandro Moraga who died on 25 August 1993. Mercedes Moraga
is the surviving spouse of the deceased Alejandro Moraga. The case was docketed as DARAB Case No. 567-
Bul '93.
Respondents alleged in their complaint, among other things, the following: (1) that the proceedings leading
to the issuance of the CLT in favor of Alejandro Moraga were irregular, i.e., the issuance of such CLT was
based on a fraudulent or false certification of the Provincial Assessor of Bulacan stating that the total
landholding of their predecessor-in-interest, Victoriano Ipapo, was 9.2986 hectares, when in truth and in
fact, it was only 6.3197 hectares, (2) that the CLT was issued in violation of respondents' and/or Victoriano
Ipapo's retention rights, 3) that the tenants, the Moragas violated their obligations as tenants.
Finding that the EP was issued not in accordance with Presidential Decree No. 27 and that the Moragas
violated their obligations as tenants of the subject landholding, the Provincial Adjudicator, in a decision
dated 30 June 1994, rendered a judgment in favor of respondents. The dispositive portion of the decision
reads:
WHEREFORE, premises considered judgment is hereby rendered as follows:

1. Finding the landholding of the late Victoriano Ipapo not covered by P.D. 27. Accordingly, EP No. 496453
issued in favor of Alejandro Moraga is hereby recalled and cancelled.
2. Ordering defendant Alejandro Moraga and all other persons acting in his behalf to vacate the premises in
question for the peaceful possession of the plaintiff.2
The Moragas filed a motion for reconsideration which was denied for lack of merit.
The Moragas then appealed to the Court of Appeals.
In the meantime, respondents filed an application for retention with the Department of Agrarian Reform
(DAR) which was opposed by petitioner Enrique Moraga. In an Order dated 22 February 1994, the Regional
Director of DAR Region III granted the application for retention by respondents.
Petitioner appealed to the Secretary of Agrarian Reform who affirmed the decision of the Regional Director in
an Order dated 14 October 1994.
Unfazed, petitioner appealed the ruling of the Secretary of Agrarian Reform to the Court of Appeals. Said
appealed ruling of the Secretary of Agrarian Reform was consolidated by the Court of Appeals with the
appealed decision of the DARAB in Case No. 567-Bul '93. The consolidated cases were docketed as CA-G.R.
No. SP No. 38445.
In a Decision dated 28 September 1995, the Court of Appeals dismissed the two appeals in CA-G.R. SP No.
38445, thus affirming the rulings of the DARAB and the Secretary of Agrarian Reform. The decision became
final and executory since no either motion for reconsideration nor appeal from the same were ever filed by
any party.
While the CA-G.R. SP No. 38445 was still pending before the Court of Appeals, petitioner and Mercedes
Moraga, on 6 April 1995, filed before the Provincial Adjudicator of Malolos, Bulacan, a complaint for
Redemption against respondents which was docketed as DARAB Case No. 927-Bul '95. The complaint
alleged that upon Alejandro Moraga's death, the Moragas succeeded Alejandro Moraga as tenants over the
parcel of land that is the subject of the controversy. It was likewise averred that the sale entered into
between Victoriano Ipapo and respondents on 7 March 1973, involving the said property, was made without
the written notice given to Alejandro Moraga and the DAR, in violation of Section 2 of Republic Act No. 3844,
as amended by Republic Act No. 6389. Within the purview of the said provisions of law, the Moragas were
exercising their right of redemption over the said landholding.
In a Decision dated 23 November 1995, the Provincial Adjudicator, taking into consideration the earlier
ruling of the Court of Appeals in CA-G.R. SP No. 38445, which affirmed the judgment of the DARAB ordering
Alejandro Moraga to vacate the premises of land in question and the order of the Secretary of Agrarian
Reform granting respondents' application for retention, opined that the case for redemption has been
rendered moot and academic inasmuch as respondents, by virtue of the said ruling of the Court of Appeals,
had acquired vested rights over the subject property. Accordingly, such vested rights entitled respondents to
exercise all the attributes of ownership, hence, said property is beyond the reach of redemption. The
Provincial Adjudicator further argued that even if the action for redemption may be availed of, the same is
still barred by prescription considering that the Moragas exercised the said right only after 22 years had
lapsed.
On appeal, the DARAB in Case No. 927-Bul '95 affirmed with modification the decision of the Provincial
Adjudicator. The DARAB, while sustaining the Provincial Adjudicator's ruling that the Moragas' right to
redeem has prescribed, stated that the heirs of Alejandro Moraga shall remain as tenants and are entitled to
security of tenure, to wit:
WHEREFORE, premises considered, the appealed decision is hereby MODIFIED declaring the heirs of the late
Alejandro Moraga, herein plaintiffs, are not entitled to redeem the subject property. However, they shall
remain as tenants thereof entitled to security of tenure. 3
The Moragas filed a motion for reconsideration of the foregoing decision denying their claim for redemption.
Respondents likewise filed a motion for reconsideration of the said decision insofar as it decreed that
Alejandro Moraga's heirs shall "remain tenants entitled to security of tenure."
Both motions were denied by the DARAB.
Hence, both parties appealed to the Court of Appeals.
The appeal of the Moragas which assailed the DARAB decision denying their claim for redemption was
docketed as CA-G.R. SP No. 63895, while the appeal of respondents questioning the DARAB decision
ordering the heirs of Alejandro Moraga to "remain as tenants entitled to security of tenure" was docketed as
CA-G.R. SP No. 70051.
In a decision dated 29 January 2003, the Special Third Division of the Court of Appeals rendered a judgment
in CA-G.R. SP No. 63895 affirming in toto the decision of the DARAB. Since no appeal was filed by either
party, this decision became final and executory.
On the other hand, the Sixth Division of the Court of Appeals, in resolving the sole issue in CA-G.R. SP No.
70051 on whether or not the DARAB is correct in ordering that the heirs of Alejandro Moraga remain as
tenants in the subject landholding, ruled for the respondents. It ratiocinated that the DARAB committed
palpable error in decreeing that Alejandro Moraga's heir "shall remain as tenants entitled to security of
tenure" considering that the said ruling alters the already final and executory decision of the Court of
Appeals in CA-G.R. SP No. 38445, enunciating that the Moragas are not entitled to security of tenure for
violating their obligations as tenants.
Undeterred, petitioner filed a motion for reconsideration of the above decision. The Court of Appeals did not
budge from its stand and denied the motion in a Resolution dated 11 January 2005.
Hence, the instant petition.
Petitioner submitted the following issues:
WHETHER OR NOT PETITIONER HAS A RIGHT OF REDEMPTION OVER THE LANDHOLDING SUBJECT OF THE
INSTANT CASE;
IF IN THE NEGATIVE, WHETHER OR NOT PETITIONER SHALL REMAIN AS TENANT OF THE LANDHOLDING
ENTITLED TO SECURITY OF TENURE;
WHETHER OR NOT RESPONDENTS HAVE A LEGAL RIGHT TO EJECT PETITIONER FROM THE LANDHOLDING
IN QUESTION;
IF IN THE AFFIRMATIVE, WHETHER OR NOT PETITIONER IS ENTITLED TO DISTURBANCE COMPENSATION. 4
As gleaned from the issues presented by petitioner, it is quite evident that petitioner would want this Court
to revisit the final and executory decisions of the Court of Appeals in CA-G.R. SP No. 38445, where
petitioner's claim of security of tenure was settled, and in CA-G.R. SP No. 63895 which resolved petitioner's
complaint for redemption. However, this cannot be done by this Court without violating the doctrine of res
judicata.
In Spouses Barretto v. Court of Appeals,5 this Court elucidated the doctrine of res judicata in this fashion:
Section 47, Rule 39 of the Rules of Court, provides:
Sec. 47. Effect of judgments or final orders. - The effect of a judgment or final order rendered by a court of
the Philippines, having jurisdiction to pronounce the judgment or final order, may be as follows:
xxx
(b) In other cases, the judgment or final order is, with respect to the matter directly adjudged or as to any
other matter that could have been raised in relation thereto, conclusive between the parties and their
successors in interest by title subsequent to the commencement of the action or special proceeding,
litigating for the same thing and under the same title and in the same capacity; and cralawlibrary
(c) In any other litigation between the same parties or their successors in interest, that only is deemed to
have been adjudged in a former judgment or final order which appears upon its face to have been so
adjudged, or which was actually and necessarily included therein or necessary thereto.
The aforecited rule in point embodies the fundamental principles of res judicata, finality of judgment and
estoppel by judgment, which means that once a judgment has become final and executory, the issues
therein litigated upon are laid to rest.
The doctrine of res judicata is of two aspects. The first aspect is the effect of a judgment as a bar to the
prosecution of a second action upon the same claim, damand or cause of action. The second aspect
precludes the relitigation of a particular fact or issue in another action between the same parties or their
successors in interest, on a different claim or cause of action.
Calalang v. Register of Deeds of Quezon City 6 further explained:
The doctrine res judicata actually embraces two different concepts: (1) bar by former judgment and (b)
conclusiveness of judgment.
The second concept - conclusiveness of judgment - states that a fact or question which was in issue in a
former suit and was there judicially passed upon and determined by a court of competent jurisdiction, is
conclusively settled by the judgment therein as far as the parties to that action and persons in privity with
them are concerned and cannot be again litigated in any future action between such parties or their privies,
in the same court or any other court of concurrent jurisdiction on either the same or different cause of
action, while the judgment remains unreversed by proper authority. It has been held that in order that a
judgment in one action can be conclusive as to a particular matter in another action between the same
parties or their privies, it is essential that the issue be identical. If a particular point or question is in issue in
the second action, and the judgment will depend on the determination of that particular point or question, a
former judgment between the same parties or their privies will be final and conclusive in the second if that
same point or question was in issue and adjudicated in the first suit. x x x.
Res judicata is grounded on fundamental considerations of public and sound practice that at the risk of
occasional error, the judgments of courts must become final at some definite date set by law. 7 After the
judgment has become final, nothing can be done therewith; otherwise there can be no end to litigation, thus
setting at naught the main role of courts, which is to assist in the enforcement of the rule of law and the
maintenance of peace and order, by settling justiciable controversies with finality. 8
In the case under consideration, it bears stressing that the Court of Appeals came out with its Decision,
dated 28 September 1995, in CA-G.R. SP No. 38445, where the issue of security of tenure was resolved and
was laid to rest. The pertinent decision of the DARAB which was affirmed by the Court of Appeals reads:
On the second issue, evidences adduced reveal that defendant Alejandro Moraga failed to pay rentals from
1990 up to the present. Under Presidential Decree 816, a tenant who deliberately refuses to pay rentals for
two consecutive years can be ejected. Section 2 thereof provides:
"Any agricultural lessee of a rice or corn land under PD 27 who deliberately refuses and/or continues to
refuse to pay rental or amortization payments when they fail due for a period of two years, shall [upon]
hearing and [final] judgment, forfeit the certificate of land transfer issued in his favor, if his landholding is
already covered by such certificate of land transfer."
Thirdly, tenant Alejandro Moraga aside from being remiss in paying his rental has allowed third person to
occupy portions of his landholding without informing the landowners. These to the mind of the Board are
acts inimical to the right and obligation of the tenant to pursue and protect his landholding from any
trespassers or would be occupant without the knowledge and consent of the landowners. In this regard, the
Board finds, defendant Alejandro Moraga to have violated his obligations as a tenant to warrant his
ejectment therefore.
WHEREFORE, premises considered judgment is hereby rendered as follows:
xxx
2. Ordering defendant Alejandro Moraga and all other persons acting in his behalf to vacate the premises in
question for the peaceful possession of the plaintiff.9
Petitioner, however, insinuated that in the same decision for ejectment in CA-G.R. SP No. 38445, the Court
of Appeals made a pronouncement that petitioner remains as tenant of the landholding, viz:
Finally, with the finding that the Emancipation Patent issued to Alejandro Moraga was void, petitioners'
status will revert back to being tenants and thus are liable for the payment of the corresponding rentals,
including the unpaid rentals which, from the evidence adduced, was from 1990. 10
Contrary to what petitioner believed, the said portion of the body of the decision is merely an obiter dictum.
In fact, the dispositive portion of the decision categorically upholds the eviction of petitioner. If indeed, it
was pronounced in the said decision that petitioner were to remain as tenant, then the dispositive portion of
the same would not have upheld petitioner's eviction. It should be remembered that while the body of a
decision, order or resolution might create some ambiguity regarding which way the court's reasoning
propenderates, it is the dispositive portion thereof that finally invests rights upon the parties, sets conditions
for the exercise of those rights, and imposes the corresponding duties and obligations. 11
Since CA-G.R. SP No. 38445 resolved the issue of security of tenure and ordered petitioner's eviction, this
Court can no longer entertain petitioner's attempt to re-litigate the same on the ground of res judicata.
In a zealous attempt to salvage his case for redemption, petitioner insisted that the late Victoriano Ipapo
failed to inform petitioner's deceased father in writing and the DAR of the sale of the land in question in
violation of Section 12 of Republic Act No. 6389, amending Sections 11 and 12 of Republic Act No. 3844, to
wit:
Sec. 12. Lessee's Right to Redemption. In case the landholding is sold to a third person without the
knowledge of the agricultural lessee, the latter shall have the right to redeem the same at a reasonable
price and consideration; Provided, that where there are two or more agricultural lessees, each shall be
entitled to said right of redemption only to [the] extent of the area actually cultivated by him. The right of
redemption under this Section may be exercised within one hundred eighty days from notice in writing which
shall be served by the vendee on all lessees affected and the Department of Agrarian Reform upon the
registration of the sale, and shall have priority over any other right of legal redemption. The redemption
price shall be the reasonable price of the land at the time of the sale.
By raising this issue, petitioner is trying to resuscitate the decision of the Court of Appeals in CA-G.R. SP No.
63895, dated 29 January 2003, which has already attained finality. It must be recalled that said decision
declared that petitioner lost his right to redeem the property on the grounds of prescription and that
petitioner's father has waived his right to redeem said property. Relevant portion of the decision states:
It must be noted that the purpose of the written notice required by law is to remove all uncertainties as to
the sale, its terms and its validity, and to quiet any doubts that the alienation is not definitive. The law
however, does not prescribe any particular form of notice, nor any distinctive method for notifying the
redemptioner. So long as the redemptioner is informed in writing of the sale and the particulars thereof, the
period for redemption will start running. x x x A copy of the deed of sale, in an authentic form, will satisfy
the requirement of the law and serve the purpose thereof.
It is worthy to note that the petitioners have secured a copy of the said Deed of Sale and attached the same
in their Answer dated October 20, 1993 in DARAB Case No. 567-Bul '93. Thus, it is proper to reckon the
period of redemption on October 20, 1993. The complaint filed on April 6, 1995 is clearly beyond the
redemption period of one hundred eighty (180) days.
Even assuming that their right to redeem the property has not prescribed, however, by virtue of the
Sinumpaang Salaysay executed by Alejandro Moraga on November 19, 1979, the latter is deemed to have
waived his right to redeem the same. x x x.12
Said issue on redemption having attained finality, petitioner's effort to modify the same is barred by res
judicata.
Petitioner, likewise, assails the 23 April 2004 Decision of the Sixth Division of the Court of Appeals in CA-
G.R. SP No. 70051 as having effectively nullified the 29 January 2003 Decision of the Special Third Division
of the Court of Appeals in CA-G.R. SP No. 63895, thereby ditching the principle of res judicata. According to
petitioner, CA-G.R. SP No. 63895 affirmed the DARAB decision decreeing, among other things, that
petitioner and his mother shall remain as tenants of the land in dispute and are entitled to security of
tenure. Said ruling was allegedly reversed by CA-G.R. SP No. 70051 when the latter ruled in this manner:
In fine, the DARAB committed a palpable error in decreeing that Alejandro's heirs "shall remain as tenants
(of the landholding) entitled to security of tenure." 13
A scrutiny of the genesis of CA-G.R. SP No. 63895 and CA-G.R. SP No. 70051 is enlightening. As already
mentioned, these two cases originated from a single complaint for redemption filed by petitioner and his
mother before the Provincial Adjudicator of Malolos, Bulacan on 6 April 1995, docketed as DARAB Case No.
927-Bul '95. In the pleadings filed by petitioner before the Provincial Adjudicator, he did not raise the issue
of security of tenure. Thus, the Provincial Adjudicator, in resolving the case confined his decision on the sole
issue of whether petitioner and his mother can redeem the subject property. He ruled they cannot. When
DARAB Case No. 927-Bul '95 was elevated to the DARAB, security of tenure was also a non-issue in the
pleadings of the parties. However, the DARAB, instead of confining itself to the sole issue at hand, veered
away and ventured into the realm of an unraised question, i.e., the issue of security of tenure. This
actuation of the DARAB prompted respondents to appeal to the Court of Appeals, docketed as CA-G.R. SP
No. 70051, questioning the DARAB decision that ordered the heirs of Alejandro Moraga to "remain as
tenants entitled to security of tenure."
On the other hand, petitioner appealed the same decision of the DARAB denying him the right to redeem the
property. Petitioner's appeal was docketed as CA-G.R. SP No. 63895.
While the Court of Appeals in CA-G.R. SP No. 70051, limited itself to the issue presented by petitioner, the
contrary happened in CA-G.R. SP No. 63895, when the Court of Appeals fell into the same pitfall as the
DARAB in fiddling with the issue of security of tenure. This conduct of the DARAB and the Court of Appeals in
CA-G.R. SP No. 63895 cannot be countenanced. First, it goes against the tenet that "courts of justice have
no jurisdiction or power to decide a question not in issue."14 A judgment that goes outside the issues and
purports to adjudicate something on which the court did not hear the parties, is not only irregular but also
extra-judicial and invalid.15 This norm does not only apply to courts but also to quasi-judicial bodies such as
the DARAB.16 Prescinding from this rule, the DARAB ruling on security of tenure, which was affirmed by the
Court of Appeals in CA-G.R. SP No. 63895, is therefore irrregular and invalid. From this disquisition, it is
readily clear that the decision in CA-G.R. SP No. 63895 is valid only insofar as it ruled that petitioner can no
longer exercise his right to redeem the said property. Res judicata is not applicable because CA-G.R. SP No.
63895, in effect, has no ruling on the issue of security of tenure which CA-G.R. SP No. 70051 could have
modified.
Anent petitioner's claim of disturbance compensation, suffice it to state that since this matter is brought up
for the first time in this Petition for Review, this Court cannot take cognizance of the same. The settled rule
is that matters or issues not raised below cannot be raised before this Court for the first time. 17
WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals dated 23 April 2004, and its
Resolution dated 11 January 2005, in CA-G.R. SP No. 70051 are AFFIRMED. Costs against petitioner.
SO ORDERED.
FELS ENERGY, INC., G.R. No. 168557
Petitioner,
-versus-
THE PROVINCE OF BATANGAS and
THE OFFICE OF THE PROVINCIAL
ASSESSOR OF BATANGAS,
Respondents.
x----------------------------------------------------x
NATIONAL POWER CORPORATION, G.R. No. 170628
Petitioner,
Present:
YNARES-SANTIAGO, J.,
- versus - Chairperson,
AUSTRIA-MARTINEZ,
CALLEJO, SR. and
LOCAL BOARD OF ASSESSMENT CHICO-NAZARIO, JJ.

APPEALS OF BATANGAS, LAURO C.
ANDAYA, in his capacity as the Assessor

of the Province of Batangas, and the Promulgated:
PROVINCE OF BATANGAS represented
by its Provincial Assessor, February 16, 2007
Respondents.
x--------------------------------------------------------------------------------------------x
DECISION
CALLEJO, SR., J.:
Before us are two consolidated cases docketed as G.R. No. 168557 and G.R. No.
170628, which were filed by petitioners FELS Energy, Inc. (FELS) and National
Power Corporation (NPC), respectively. The first is a petition for review
on certiorari assailing the August 25, 2004 Decision [1] of the Court of Appeals
(CA) in CA-G.R. SP No. 67490 and its Resolution [2] dated June 20, 2005; the
second, also a petition for review on certiorari, challenges the February 9, 2005
Decision[3] and November 23, 2005 Resolution[4]of the CA in CA-G.R. SP No.
67491. Both petitions were dismissed on the ground of prescription.
The pertinent facts are as follows:
On January 18, 1993, NPC entered into a lease contract with Polar Energy, Inc.
over 3x30 MW diesel engine power barges moored at Balayan Bay in Calaca,
Batangas. The contract, denominated as an Energy Conversion
Agreement[5] (Agreement), was for a period of five years. Article 10 reads:
10.1 RESPONSIBILITY. NAPOCOR shall be responsible for the payment
of (a) all taxes, import duties, fees, charges and other levies imposed by the
National Government of the Republic of the Philippines or any agency or
instrumentality thereof to which POLAR may be or become subject to or in
relation to the performance of their obligations under this agreement (other than
(i) taxes imposed or calculated on the basis of the net income of POLAR and
Personal Income Taxes of its employees and (ii) construction permit fees,
environmental permit fees and other similar fees and charges) and (b) all real
estate taxes and assessments, rates and other charges in respect of the Power
Barges.[6]
Subsequently, Polar Energy, Inc. assigned its rights under the Agreement to
FELS. The NPC initially opposed the assignment of rights, citing paragraph 17.2
of Article 17 of the Agreement.
On August 7, 1995, FELS received an assessment of real property taxes on

the power barges from Provincial Assessor Lauro C. Andaya of Batangas City. The
assessed tax, which likewise covered those due for 1994, amounted
to P56,184,088.40 per annum. FELS referred the matter to NPC, reminding it of its
obligation under the Agreement to pay all real estate taxes. It then gave NPC the
full power and authority to represent it in any conference regarding the real
property assessment of the Provincial Assessor.
In a letter[7] dated September 7, 1995, NPC sought reconsideration of the Provincial

Assessors decision to assess real property taxes on the power barges. However, the
motion was denied on September 22, 1995, and the Provincial Assessor advised
NPC to pay the assessment.[8] This prompted NPC to file a petition with the Local
Board of Assessment Appeals (LBAA) for the setting aside of the assessment and
the declaration of the barges as non-taxable items; it also prayed that should LBAA
find the barges to be taxable, the Provincial Assessor be directed to make the
necessary corrections.[9]
In its Answer to the petition, the Provincial Assessor averred that the barges were
real property for purposes of taxation under Section 199(c) of Republic Act (R.A.)
No. 7160.
Before the case was decided by the LBAA, NPC filed a Manifestation,
informing the LBAA that the Department of Finance (DOF) had rendered an
opinion[10] dated May 20, 1996, where it is clearly stated that power barges are not
real property subject to real property assessment.
On August 26, 1996, the LBAA rendered a Resolution[11] denying the
petition. The fallo reads:
WHEREFORE, the Petition is DENIED. FELS is hereby ordered to pay
the real estate tax in the amount of P56,184,088.40, for the year 1994.
SO ORDERED.[12]
The LBAA ruled that the power plant facilities, while they may be classified as
movable or personal property, are nevertheless considered real property for
taxation purposes because they are installed at a specific location with a character
of permanency. The LBAA also pointed out that the owner of the bargesFELS, a
private corporationis the one being taxed, not NPC. A mere agreement making
NPC responsible for the payment of all real estate taxes and assessments will not
justify the exemption of FELS; such a privilege can only be granted to NPC and
cannot be extended to FELS. Finally, the LBAA also ruled that the petition was
filed out of time.
Aggrieved, FELS appealed the LBAAs ruling to the Central Board of Assessment
Appeals (CBAA).
On August 28, 1996, the Provincial Treasurer of Batangas City issued a Notice of
Levy and Warrant by Distraint[13] over the power barges, seeking to collect real
property taxes amounting to P232,602,125.91 as of July 31, 1996. The notice and
warrant was officially served to FELS on November 8, 1996. It then filed a Motion
to Lift Levy dated November 14, 1996, praying that the Provincial Assessor be
further restrained by the CBAA from enforcing the disputed assessment during the
pendency of the appeal.
On November 15, 1996, the CBAA issued an Order[14] lifting the levy and distraint
on the properties of FELS in order not to preempt and render ineffectual, nugatory
and illusory any resolution or judgment which the Board would issue.
Meantime, the NPC filed a Motion for Intervention [15] dated August 7, 1998 in the
proceedings before the CBAA. This was approved by the CBAA in an
Order[16] dated September 22, 1998.
During the pendency of the case, both FELS and NPC filed several motions to
admit bond to guarantee the payment of real property taxes assessed by the
Provincial Assessor (in the event that the judgment be unfavorable to them). The
bonds were duly approved by the CBAA.
On April 6, 2000, the CBAA rendered a Decision [17] finding the power barges
exempt from real property tax. The dispositive portion reads:
WHEREFORE, the Resolution of the Local Board of Assessment Appeals of

the Province of Batangas is hereby reversed. Respondent-appellee Provincial
Assessor of the Province of Batangasis hereby ordered to drop subject property
under ARP/Tax Declaration No. 018-00958 from the List of Taxable Properties in
the Assessment Roll. The Provincial Treasurer of Batangas is hereby directed to
act accordingly.
SO ORDERED.[18]
Ruling in favor of FELS and NPC, the CBAA reasoned that the power barges
belong to NPC; since they are actually, directly and exclusively used by it, the
power barges are covered by the exemptions under Section 234(c) of R.A. No.
7160.[19] As to the other jurisdictional issue, the CBAA ruled that prescription did
not preclude the NPC from pursuing its claim for tax exemption in accordance with
Section 206 of R.A. No. 7160. The Provincial Assessor filed a motion for
reconsideration, which was opposed by FELS and NPC.
In a complete volte face, the CBAA issued a Resolution[20] on July 31,

2001 reversing its earlier decision. The fallo of the resolution reads:
WHEREFORE, premises considered, it is the resolution of this Board that:
(a) The decision of the Board dated 6 April 2000 is hereby reversed.
(b) The petition of FELS, as well as the intervention of NPC, is dismissed.
(c) The resolution of the Local Board of Assessment Appeals of Batangas is

hereby affirmed,
(d) The real property tax assessment on FELS by the Provincial Assessor of
Batangas is likewise hereby affirmed.
SO ORDERED.[21]
FELS and NPC filed separate motions for reconsideration, which were
timely opposed by the Provincial Assessor. The CBAA denied the said motions in a
Resolution[22]dated October 19, 2001.
Dissatisfied, FELS filed a petition for review before the CA docketed as CA-
G.R. SP No. 67490. Meanwhile, NPC filed a separate petition, docketed as CA-
G.R. SP No. 67491.
On January 17, 2002, NPC filed a Manifestation/Motion for Consolidation

in CA-G.R. SP No. 67490 praying for the consolidation of its petition with CA-
G.R. SP No. 67491. In a Resolution[23] dated February 12, 2002, the appellate court
directed NPC to re-file its motion for consolidation with CA-G.R. SP No. 67491,
since it is the ponente of the latter petition who should resolve the request for
reconsideration.
NPC failed to comply with the aforesaid resolution. On August 25, 2004, the
Twelfth Division of the appellate court rendered judgment in CA-G.R. SP No.
67490 denying the petition on the ground of prescription. The decretal portion of
the decision reads:
WHEREFORE, the petition for review is DENIED for lack of merit and
the assailed Resolutions dated July 31, 2001 and October 19, 2001 of the Central
Board of Assessment Appeals are AFFIRMED.
SO ORDERED.[24]
On September 20, 2004, FELS timely filed a motion for reconsideration seeking
the reversal of the appellate courts decision in CA-G.R. SP No. 67490.
Thereafter, NPC filed a petition for review dated October 19, 2004 before this
Court, docketed as G.R. No. 165113, assailing the appellate courts decision in CA-
G.R. SP No. 67490. The petition was, however, denied in this Courts
Resolution[25] of November 8, 2004, for NPCs failure to sufficiently show that the
CA committed any reversible error in the challenged decision. NPC filed a motion
for reconsideration, which the Court denied with finality in a
Resolution[26] dated January 19, 2005.
Meantime, the appellate court dismissed the petition in CA-G.R. SP No. 67491. It
held that the right to question the assessment of the Provincial Assessor had
already prescribed upon the failure of FELS to appeal the disputed assessment to
the LBAA within the period prescribed by law. Since FELS had lost the right to
question the assessment, the right of the Provincial Government to collect the tax
was already absolute.
NPC filed a motion for reconsideration dated March 8, 2005, seeking

reconsideration of the February 5, 2005 ruling of the CA in CA-G.R. SP No.
67491. The motion was denied in a Resolution[27] dated November 23, 2005.
The motion for reconsideration filed by FELS in CA-G.R. SP No. 67490 had been
earlier denied for lack of merit in a Resolution[28] dated June 20, 2005.
On August 3, 2005, FELS filed the petition docketed as G.R. No. 168557
before this Court, raising the following issues:
A.
Whether power barges, which are floating and movable, are personal properties
and therefore, not subject to real property tax.
B.
Assuming that the subject power barges are real properties, whether they are
exempt from real estate tax under Section 234 of the Local Government Code
(LGC).
C.
Assuming arguendo that the subject power barges are subject to real estate tax,
whether or not it should be NPC which should be made to pay the same under the
law.
D.
Assuming arguendo that the subject power barges are real properties, whether or
not the same is subject to depreciation just like any other personal properties.
E.
Whether the right of the petitioner to question the patently null and void real
property tax assessment on the petitioners personal properties is imprescriptible.
[29]
On January 13, 2006, NPC filed its own petition for review before this Court
(G.R. No. 170628), indicating the following errors committed by the CA:
I
THE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT THE
APPEAL TO THE LBAA WAS FILED OUT OF TIME.
II
THE COURT OF APPEALS GRAVELY ERRED IN NOT HOLDING THAT
THE POWER BARGES ARE NOT SUBJECT TO REAL PROPERTY TAXES.
III
THE COURT OF APPEALS GRAVELY ERRED IN NOT HOLDING THAT
THE ASSESSMENT ON THE POWER BARGES WAS NOT MADE IN
ACCORDANCE WITH LAW.[30]
Considering that the factual antecedents of both cases are similar, the Court
ordered the consolidation of the two cases in a Resolution[31] dated March 8, 2006.
In an earlier Resolution dated February 1, 2006, the Court had required the parties
to submit their respective Memoranda within 30 days from notice. Almost a year
passed but the parties had not submitted their respective memoranda. Considering
that taxesthe lifeblood of our economyare involved in the present controversy, the
Court was prompted to dispense with the said pleadings, with the end view of
advancing the interests of justice and avoiding further delay.
In both petitions, FELS and NPC maintain that the appeal before the LBAA was
not time-barred. FELS argues that when NPC moved to have the assessment
reconsidered on September 7, 1995, the running of the period to file an appeal with
the LBAA was tolled. For its part, NPC posits that the 60-day period for appealing
to the LBAA should be reckoned from its receipt of the denial of its motion for
reconsideration.
Petitioners contentions are bereft of merit.
Section 226 of R.A. No. 7160, otherwise known as the Local Government
Code of 1991, provides:
SECTION 226. Local Board of Assessment Appeals. Any owner or
person having legal interest in the property who is not satisfied with the action of
the provincial, city or municipal assessor in the assessment of his property may,
within sixty (60) days from the date of receipt of the written notice of assessment,
appeal to the Board of Assessment Appeals of the province or city by filing a
petition under oath in the form prescribed for the purpose, together with copies of
the tax declarations and such affidavits or documents submitted in support of the
appeal.
We note that the notice of assessment which the Provincial Assessor sent to FELS
on August 7, 1995, contained the following statement:
If you are not satisfied with this assessment, you may, within sixty (60) days from
the date of receipt hereof, appeal to the Board of Assessment Appeals of the
province by filing a petition under oath on the form prescribed for the purpose,
together with copies of ARP/Tax Declaration and such affidavits or documents
submitted in support of the appeal.[32]
Instead of appealing to the Board of Assessment Appeals (as stated in the

notice), NPC opted to file a motion for reconsideration of the Provincial Assessors
decision, a remedy not sanctioned by law.
The remedy of appeal to the LBAA is available from an adverse ruling or

action of the provincial, city or municipal assessor in the assessment of the
property. It follows then that the determination made by the respondent Provincial
Assessor with regard to the taxability of the subject real properties falls within its
power to assess properties for taxation purposes subject to appeal before the
LBAA.[33]
We fully agree with the rationalization of the CA in both CA-G.R. SP No.

67490 and CA-G.R. SP No. 67491. The two divisions of the appellate court cited
the case of Callanta v. Office of the Ombudsman,[34] where we ruled that under
Section 226 of R.A. No 7160,[35] the last action of the local assessor on a particular
assessment shall be the notice of assessment; it is this last action which gives the
owner of the property the right to appeal to the LBAA. The procedure likewise
does not permit the property owner the remedy of filing a motion for
reconsideration before the local assessor. The pertinent holding of the Court
in Callanta is as follows:
x x x [T]he same Code is equally clear that the aggrieved owners should
have brought their appeals before the LBAA. Unfortunately, despite the advice to
this effect contained in their respective notices of assessment, the owners chose to
bring their requests for a review/readjustment before the city assessor, a remedy
not sanctioned by the law. To allow this procedure would indeed invite corruption
in the system of appraisal and assessment. It conveniently courts a graft-prone
situation where values of real property may be initially set unreasonably high, and
then subsequently reduced upon the request of a property owner. In the latter
instance, allusions of a possible covert, illicit trade-off cannot be avoided, and in
fact can conveniently take place. Such occasion for mischief must be prevented
and excised from our system.[36]
For its part, the appellate court declared in CA-G.R. SP No. 67491:
x x x. The Court announces: Henceforth, whenever the local assessor

sends a notice to the owner or lawful possessor of real property of its revised
assessed value, the former shall no longer have any jurisdiction to entertain any
request for a review or readjustment. The appropriate forum where the aggrieved
party may bring his appeal is the LBAA as provided by law. It follows ineluctably
that the 60-day period for making the appeal to the LBAA runs without
interruption. This is what We held in SP 67490 and reaffirm today in SP 67491.[37]
To reiterate, if the taxpayer fails to appeal in due course, the right of

the local government to collect the taxes due with respect to the taxpayers property
becomes absolute upon the expiration of the period to appeal. [38] It also bears
stressing that the taxpayers failure to question the assessment in the LBAA renders
the assessment of the local assessor final, executory and demandable, thus,
precluding the taxpayer from questioning the correctness of the assessment, or
from invoking any defense that would reopen the question of its liability on the
merits.[39]
In fine, the LBAA acted correctly when it dismissed the petitioners appeal
for having been filed out of time; the CBAA and the appellate court were likewise
correct in affirming the dismissal. Elementary is the rule that the perfection of an
appeal within the period therefor is both mandatory and jurisdictional, and failure
in this regard renders the decision final and executory.[40]
In the Comment filed by the Provincial Assessor, it is asserted that the

instant petition is barred by res judicata; that the final and executory judgment in
G.R. No. 165113 (where there was a final determination on the issue of
prescription), effectively precludes the claims herein; and that the filing of the
instant petition after an adverse judgment in G.R. No. 165113 constitutes forum
shopping.
FELS maintains that the argument of the Provincial Assessor is completely

misplaced since it was not a party to the erroneous petition which the NPC filed in
G.R. No. 165113. It avers that it did not participate in the aforesaid proceeding,
and the Supreme Court never acquired jurisdiction over it. As to the issue of forum
shopping, petitioner claims that no forum shopping could have been committed
since the elements of litis pendentia or res judicata are not present.
We do not agree.
Res judicata pervades every organized system of jurisprudence and is

founded upon two grounds embodied in various maxims of 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 of being vexed twice for the same cause nemo debet bis
vexari et eadem causa. A conflicting doctrine would subject the public peace and
quiet to the will and dereliction of individuals and prefer the regalement of the
litigious disposition on the part of suitors to the preservation of the public
tranquility and happiness.[41] As we ruled in Heirs of Trinidad De Leon Vda. de
Roxas v. Court of Appeals:[42]
x x x An existing final judgment or decree rendered upon

the merits, without fraud or collusion, by a court of competent
jurisdiction acting upon a matter within its authority is conclusive
on the rights of the parties and their privies. This ruling holds in all
other actions or suits, in the same or any other judicial tribunal of
concurrent jurisdiction, touching on the points or matters in issue
in the first suit.
xxx
Courts will simply refuse to reopen what has been decided. They will not
allow the same parties or their privies to litigate anew a question once it has been
considered and decided with finality. Litigations must end and terminate
sometime and somewhere. The effective and efficient administration of justice
requires that once a judgment has become final, the prevailing party should not be
deprived of the fruits of the verdict by subsequent suits on the same issues filed
by the same parties.
This is in accordance with the doctrine of res judicata which has the
following elements: (1) the former judgment must be final; (2) the court which
rendered it had jurisdiction over the subject matter and the parties; (3) the
judgment must be on the merits; and (4) there must be between the first and the
second actions, identity of parties, subject matter and causes of action. The
application of the doctrine of res judicata does not require absolute identity of
parties but merely substantial identity of parties. There is substantial identity
of parties when there is community of interest or privity of interest between a
party in the first and a party in the second case even if the first case did not
implead the latter.[43]
To recall, FELS gave NPC the full power and authority to represent it in any
proceeding regarding real property assessment. Therefore, when petitioner NPC
filed its petition for review docketed as G.R. No. 165113, it did so not only on its
behalf but also on behalf of FELS. Moreover, the assailed decision in the earlier
petition for review filed in this Court was the decision of the appellate court in CA-
G.R. SP No. 67490, in which FELS was the petitioner. Thus, the decision in G.R.
No. 165116 is binding on petitioner FELS under the principle of privity of interest.
In fine, FELS and NPC are substantially identical parties as to warrant the
application of res judicata. FELSs argument that it is not bound by the erroneous
petition filed by NPC is thus unavailing.
On the issue of forum shopping, we rule for the Provincial Assessor. Forum
shopping exists when, as a result of an adverse judgment in one forum, a party
seeks another and possibly favorable judgment in another forum other than by
appeal or special civil action or certiorari. There is also forum shopping when a
party institutes two or more actions or proceedings grounded on the same cause,
on the gamble that one or the other court would make a favorable disposition. [44]
Petitioner FELS alleges that there is no forum shopping since the elements
of res judicata are not present in the cases at bar; however, as already
discussed, res judicatamay be properly applied herein. Petitioners engaged in
forum shopping when they filed G.R. Nos. 168557 and 170628 after the petition
for review in G.R. No. 165116. Indeed, petitioners went from one court to another
trying to get a favorable decision from one of the tribunals which allowed them to
pursue their cases.
It must be stressed that an important factor in determining the existence of

forum shopping is the vexation caused to the courts and the parties-litigants by
the filing of similar cases to claim substantially the same reliefs.[45] The rationale
against forum shopping is that a party should not be allowed to pursue
simultaneous remedies in two different fora. Filing multiple petitions or
complaints constitutes abuse of court processes, which tends to degrade the
administration of justice, wreaks havoc upon orderly judicial procedure, and adds
to the congestion of the heavily burdened dockets of the courts.[46]
Thus, there is forum shopping when there exist: (a) identity of parties, or at
least such parties as represent 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 of the two preceding particulars is such that any judgment
rendered in the pending case, regardless of which party is successful, would
amount to res judicata in the other.[47]
Having found that the elements of res judicata and forum shopping are
present in the consolidated cases, a discussion of the other issues is no longer
necessary. Nevertheless, for the peace and contentment of petitioners, we shall
shed light on the merits of the case.
As found by the appellate court, the CBAA and LBAA power barges are real
property and are thus subject to real property tax. This is also the inevitable
conclusion, considering that G.R. No. 165113 was dismissed for failure to
sufficiently show any reversible error. Tax assessments by tax examiners are
presumed correct and made in good faith, with the taxpayer having the burden of
proving otherwise.[48] Besides, factual findings of administrative bodies, which
have acquired expertise in their field, are generally binding and conclusive upon
the Court; we will not assume to interfere with the sensible exercise of the
judgment of men especially trained in appraising property. Where the judicial mind
is left in doubt, it is a sound policy to leave the assessment undisturbed. [49] We find
no reason to depart from this rule in this case.
In Consolidated Edison Company of New York, Inc., et al. v. The City of New
York, et al.,[50] a power company brought an action to review property tax
assessment. On the citys motion to dismiss, the Supreme Court of New
York held that the barges on which were mounted gas turbine power plants
designated to generate electrical power, the fuel oil barges which supplied fuel oil
to the power plant barges, and the accessory equipment mounted on the barges
were subject to real property taxation.
Moreover, Article 415 (9) of the New Civil Code provides that [d]ocks and
structures which, though floating, are intended by their nature and object to remain
at a fixed place on a river, lake, or coast are considered immovable property. Thus,
power barges are categorized as immovable property by destination, being in the
nature of machinery and other implements intended by the owner for an industry or
work which may be carried on in a building or on a piece of land and which tend
directly to meet the needs of said industry or work.[51]
Petitioners maintain nevertheless that the power barges are exempt from real
estate tax under Section 234 (c) of R.A. No. 7160 because they are actually,
directly and exclusively used by petitioner NPC, a government- owned and
controlled corporation engaged in the supply, generation, and transmission of
electric power.
We affirm the findings of the LBAA and CBAA that the owner of the taxable
properties is petitioner FELS, which in fine, is the entity being taxed by the local
government. As stipulated under Section 2.11, Article 2 of the Agreement:
OWNERSHIP OF POWER BARGES. POLAR shall own the Power

Barges and all the fixtures, fittings, machinery and equipment on the Site used in
connection with the Power Barges which have been supplied by it at its own cost.
POLAR shall operate, manage and maintain the Power Barges for the purpose of
converting Fuel of NAPOCOR into electricity.[52]
It follows then that FELS cannot escape liability from the payment of realty
taxes by invoking its exemption in Section 234 (c) of R.A. No. 7160, which reads:
SECTION 234. Exemptions from Real Property Tax. The following are
exempted from payment of the real property tax:
xxx
(c) All machineries and equipment that are actually, directly and
exclusively used by local water districts and government-owned or
controlled corporations engaged in the supply and distribution of water
and/or generation and transmission of electric power; x x x
Indeed, the law states that the machinery must be actually, directly and
exclusively used by the government owned or controlled corporation; nevertheless,
petitioner FELS still cannot find solace in this provision because Section 5.5,
Article 5 of the Agreement provides:
OPERATION. POLAR undertakes that until the end of the Lease Period,
subject to the supply of the necessary Fuel pursuant to Article 6 and to the other
provisions hereof, it will operate the Power Barges to convert such Fuel into
electricity in accordance with Part A of Article 7.[53]
It is a basic rule that obligations arising from a contract have the force of law
between the parties. Not being contrary to law, morals, good customs, public order
or public policy, the parties to the contract are bound by its terms and conditions.[54]
Time and again, the Supreme Court has stated that taxation is the rule and
exemption is the exception.[55] The law does not look with favor on tax exemptions
and the entity that would seek to be thus privileged must justify it by words too
plain to be mistaken and too categorical to be misinterpreted. [56] Thus, applying the
rule of strict construction of laws granting tax exemptions, and the rule that doubts
should be resolved in favor of provincial corporations, we hold that FELS is
considered a taxable entity.
The mere undertaking of petitioner NPC under Section 10.1 of the

Agreement, that it shall be responsible for the payment of all real estate taxes and
assessments, does not justify the exemption. The privilege granted to petitioner
NPC cannot be extended to FELS. The covenant is between FELS and NPC and
does not bind a third person not privy thereto, in this case,
the Province of Batangas.
It must be pointed out that the protracted and circuitous litigation has
seriously resulted in the local governments deprivation of revenues. The power to
tax is an incident of sovereignty and is unlimited in its magnitude, acknowledging
in its very nature no perimeter so that security against its abuse is to be found only
in the responsibility of the legislature which imposes the tax on the constituency
who are to pay for it.[57] The right of local government units to collect taxes due
must always be upheld to avoid severe tax erosion. This consideration is consistent
with the State policy to guarantee the autonomy of local governments [58] and the
objective of the Local Government Code that they enjoy genuine and meaningful
local autonomy to empower them to achieve their fullest development as self-
reliant communities and make them effective partners in the attainment of national
goals.[59]
In conclusion, we reiterate that the power to tax is the most potent

instrument to raise the needed revenues to finance and support myriad activities of
the local government units for the delivery of basic services essential to the
promotion of the general welfare and the enhancement of peace, progress, and
prosperity of the people.[60]
WHEREFORE, the Petitions are DENIED and the assailed Decisions and
Resolutions AFFIRMED.
SO ORDERED.
CHRIS GARMENTS CORPORATION, G.R. No. 167426
Petitioner,
Present:
- versus - QUISUMBING, J., Chairperson,
CARPIO,*
CARPIO MORALES,
TINGA, and
HON. PATRICIA A. STO. TOMAS and CHRIS VELASCO, JR., JJ.

GARMENTS WORKERS UNION-PTGWO
LOCAL CHAPTER No. 832,
Promulgated:
Respondents.
January 12, 2009

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION
QUISUMBING, J.:
Petitioner assails the Resolutions dated February 22, 2005[1] and March 16,
2005[2] of the Court of Appeals in CA-G.R. SP No. 88444, which dismissed its
petition for certiorari due to its failure to file a motion for reconsideration from
the Decision[3] of the Secretary of the Department of Labor and Employment
before filing the petition.
The relevant facts are as follows:
Petitioner Chris Garments Corporation is engaged in the manufacture and

export of quality garments and apparel.
On February 8, 2002, respondent Chris Garments Workers UnionPTGWO,

Local Chapter No. 832, filed a petition for certification election with the Med-
Arbiter. The union sought to represent petitioners rank-and-file employees not
covered by its Collective Bargaining Agreement (CBA) with the Samahan Ng Mga
Manggagawa sa Chris Garments CorporationSolidarity of Union in
the Philippines for Empowerment and Reforms (SMCGC-SUPER), the certified
bargaining agent of the rank-and-file employees.The union alleged that it is a
legitimate labor organization with a Certificate of Creation of Local/Chapter No.
PTGWO-832[4] dated January 31, 2002 issued by the Bureau of Labor Relations.[5]
Petitioner moved to dismiss the petition. It argued that it has an existing CBA
from July 1, 1999 to June 30, 2004 with SMCGC-SUPER which bars any petition for
certification election prior to the 60-day freedom period. It also contended that the
union members are not its regular employees since they are direct employees of
qualified and independent contractors.[6]
The union countered that its members are regular employees of petitioner
since: (1) they are engaged in activities necessary and desirable to its main
business although they are called agency employees; (2) their length of service
have spanned an average of four years; (3) petitioner controlled their work
attitude and performance; and (4) petitioner paid their salaries. The union added
that while there is an existing CBA between petitioner and SMCGC-SUPER, there
are other rank-and-file employees not covered by the CBA who seek
representation for collective bargaining purposes. It also contended that the
contract bar rule does not apply.[7]
The Med-Arbiter dismissed the petition. The Med-Arbiter ruled that there
was no employer-employee relationship between the parties since the union itself
admitted that its members are agency employees. The Med-Arbiter also held that
even if the union members are considered direct employees of petitioner, the
petition for certification election will still fail due to the contract bar rule under
Article 232[8] of the Labor Code. Hence, a petition could only be filed during the
60-day freedom period of the CBA or from May 1, 2004 to June 30,
2004. Nevertheless, the Med-Arbiter ruled that the union may avail of the CBA
benefits by paying agency fees to SMCGC-SUPER.[9]
In a Resolution[10] dated December 27, 2002, the Secretary of Labor and

Employment affirmed the decision of the Med-Arbiter. She ruled that petitioner
failed to prove that the union members are employees of qualified and
independent contractors with substantial capital or investment and added that
petitioner had the right to control the performance of the work of such
employees. She also noted that the union members are garment workers who
performed activities directly related to petitioners main business.Thus, the union
members may be considered part of the bargaining unit of petitioners rank-and-
file employees. However, she held that the petition could not be entertained
except during the 60-day freedom period. She also found no reason to split
petitioners bargaining unit.
On May 16, 2003, the union filed a second petition for certification
election. The Med-Arbiter dismissed the petition on the ground that it was barred
by a prior judgment. On appeal, the Secretary of Labor and Employment affirmed
the decision of the Med-Arbiter.[11]
On June 4, 2004, the union filed a third petition for certification election.
[12]
The Med-Arbiter dismissed the petition on the grounds that no employer-
employee relationship exists between the parties and that the case was barred by
a prior judgment. On appeal, the Secretary of Labor and Employment granted the
petition in a Decision[13]dated January 18, 2005. Thus:
WHEREFORE, the appeal filed by Chris Garment[s] Workers UnionPTGWO is
hereby GRANTED. The 7 July 2004 Order of Med-Arbiter Tranquilino B. Reyes is
hereby REVERSED and SET ASIDE. Accordingly, let the entire records of the case be
remanded to the Regional Office of origin for the immediate conduct of a certification
election, subject to the usual pre-election conference, among the regular rank-and-file
employees of Chris Garments Corporation, with the following choices:
1. Chris Garments Workers Union PTGWO Local Chapter No. 832;
2. Samahan ng Manggagawa sa Chris Garments Corp. SUPER; and
3. No Union.
Pursuant to Section 13(e), Rule VIII of Department Order No. 40-03, the
employer is hereby directed to submit to the office of origin, within ten (10) days from
receipt hereof, the certified list of its employees in the bargaining unit or when
necessary a copy of its payroll covering the same employees for the last three (3)
months preceding the issuance of this Decision.
[14]
SO DECIDED.
Petitioner received a copy of the decision on January 25, 2005. On February
4, 2005, petitioner filed a petition for certiorari with the Court of Appeals which
was dismissed due to its failure to file a motion for reconsideration of the decision
before filing the petition.
Incidentally, a certification election was conducted on June 21, 2005 among

petitioners rank-and-file employees where SMCGC-SUPER emerged as the winning
union. On January 20, 2006, the Med-Arbiter certified SMCGC-SUPER as the sole
and exclusive bargaining agent of all the rank-and-file employees of petitioner.[15]
Petitioner now comes before us arguing that:

I.
THE COURT OF APPEALS SERIOUSLY ERRED AND COMMITTED GRAVE ABUSE OF

DISCRETION IN DISMISSING THE PETITION [FOR CERTIORARI] ON THE SOLE GROUND
THAT THE COMPANY DID NOT FILE A MOTION FOR RECONSIDERATION DESPITE SECTION
21, RULE VIII OF DEPARTMENT ORDER NO. 43-03, . . . SERIES OF 2003, [WHICH]
PROHIBITS THE FILING OF A MOTION FOR RECONSIDERATION FROM A DECISION OF THE
SECRETARY OF LABOR.
II.
THE COURT OF APPEALS SERIOUSLY ERRED AND COMMITTED GRAVE ABUSE OF DISCRETION
IN REFUSING TO RESOLVE THE MERITS OF THE PETITION AS IT DISMISSED THE SAME BY
MERE, ALBEIT, BASELESS TECHNICALITY WHICH ONLY FRUSTRATED RATHER THAN
PROMOTED SUBSTANTIAL JUSTICE . . .
III.
PUBLIC RESPONDENT SERIOUSLY ERRED AND COMMITTED GRAVE ABUSE OF

DISCRETION IN REVERSING THE DECISION OF THE MED-ARBITER AND GIVING [DUE]
COURSE TO THE PETITION FOR CERTIFICATION ELECTION FILED BY PRIVATE RESPONDENT
CGWU-PTGWO DESPITE THE ABSENCE OF ANY EMPLOYER-EMPLOYEE RELATIONSHIP
BETWEEN THE COMPANY AND ITS MEMBERS.
IV.

DISCRETION IN REVERSING THE FINDINGS OF THE MED-ARBITER THAT THE PETITION
FOR CERTIFICATION ELECTION WAS BARRED BY RES JUDICATA AND/OR THE PRINCIPLE
OF CONCLUSIVENESS OF JUDGMENT.
V.

DISCRETION IN NOT DISMISSING OUTRIGHT THE APPEAL OF PRIVATE RESPONDENT FOR
FAILURE TO SUBMIT A CERTIFICATION AGAINST FORUM SHOPPING. [16]
The principal issues are: (1) Is a motion for reconsideration necessary

before a party can file a petition for certiorari from the decision of the Secretary of
Labor and Employment? (2) Is the case barred by res judicata or conclusiveness of
judgment? and (3) Is there an employer-employee relationship between
petitioner and the union members?
First. It is settled that the filing of a motion for reconsideration is a

prerequisite to the filing of a special civil action for certiorari to give the lower
court the opportunity to correct itself. [17] This rule, however, admits of exceptions,
such as when a motion for reconsideration would be useless under the
circumstances.[18]
Under Department Order No. 40-03, Series of 2003, [19] the decision of the
Secretary of Labor and Employment shall be final and executory after ten days
from receipt thereof by the parties and that it shall not be subject of a motion for
reconsideration.
In this case, the Decision dated January 18, 2005 of the Secretary of Labor
and Employment was received by petitioner on January 25, 2005. It would have
become final and executory on February 4, 2005, the tenth day from petitioners
receipt of the decision. However, petitioner filed a petition for certiorari with the
Court of Appeals on even date. Clearly, petitioner availed of the proper remedy
since Department Order No. 40-03 explicitly prohibits the filing of a motion for
reconsideration. Such motion becomesdispensable and not at all necessary.
Second. The doctrine of res judicata provides that a final judgment or

decree on the merits by a court of competent jurisdiction is conclusive of the
rights of the parties or their privies in all later suits on points and matters
determined in the former suit.[20] 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.[21]
Res judicata has a dual aspect: first, bar by prior judgment which is provided
in Rule 39, Section 47(b)[22] of the 1997 Rules of Civil Procedure and second,
conclusiveness of judgment which is provided in Section 47(c)[23] of the same Rule.
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. [24] In this instance, the
judgment in the first case constitutes an absolute bar to the second
action. Otherwise put, the judgment or decree of the court of competent
jurisdiction on the merits concludes the litigation between the parties, as well as
their privies, and constitutes a bar to a new action or suit involving the same
cause of action before the same or any other tribunal.[25]
On the other hand, the doctrine of conclusiveness of judgment provides

that 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. Under this doctrine, identity of causes of action is not required but merely
identity of issues. Otherwise stated, conclusiveness of judgment bars the
relitigation of particular facts or issues in another litigation between the same
parties on a different claim or cause of action.[26]
In the instant case, there is no dispute as to the presence of the first three
elements of res judicata. The Resolution dated December 27, 2002 of the
Secretary of Labor and Employment on the first petition for certification election
became final and executory. It was rendered on the merits and the Secretary of
Labor and Employment had jurisdiction over the case. Now, is the fourth element
identity of parties, subject matter, and causes of action between the first and third
petitions for certification election present? We hold in the negative.
The Secretary of Labor and Employment dismissed the first petition as it was
filed outside the 60-day freedom period. At that time therefore, the union has no
cause of action since they are not yet legally allowed to challenge openly and
formally the status of SMCGC-SUPER as the exclusive bargaining representative of
the bargaining unit. Such dismissal, however, has no bearing in the instant case
since the third petition for certification election was filed well within the 60-day
freedom period. Otherwise stated, there is no identity of causes of action to speak
of since in the first petition, the union has no cause of action while in the third, a
cause of action already exists for the union as they are now legally allowed to
challenge the status of SMCGC-SUPER as exclusive bargaining representative.
Third. The matter of employer-employee relationship has been resolved

with finality by the Secretary of Labor and Employment in the Resolution
dated December 27, 2002. Since petitioner did not appeal this factual finding,
then, it may be considered as the final resolution of such issue. To reiterate,
conclusiveness of judgment has the effect of preclusion of issues.[27]
WHEREFORE, the instant petition is DENIED for lack of merit.
SO ORDERED.
SOCIAL SECURITY G.R. No. 167050

COMMISSION,
Petitioner,
Present:
CORONA, C.J.,
Chairperson
VELASCO, JR.,
-versus- LEONARDO-DE CASTRO,
PERALTA,* and
PEREZ, JJ.
RIZAL POULTRY and

LIVESTOCK ASSOCIATION,
INC., BSD AGRO INDUSTRIAL
DEVELOPMENT CORPORATION Promulgated:
and BENJAMIN SAN DIEGO,
Respondents. June 1, 2011
x ----------------------------------------------------------------------------------------x
DECISION
PEREZ, J.:
This petition for certiorari challenges the Decision[1] dated 20 September

2004 and Resolution[2] dated 9 February 2005 of the Court of Appeals. The instant
case stemmed from a petition filed by Alberto Angeles (Angeles) before the Social
Security Commission (SSC) to compel respondents Rizal Poultry and Livestock
Association, Inc. (Rizal Poultry) or BSD Agro Industrial Development Corporation
(BSD Agro) to remit to the Social Security System (SSS) all contributions due for
and in his behalf.Respondents countered with a Motion to Dismiss [3] citing rulings
of the National Labor Relations Commission (NLRC) and Court of Appeals
regarding the absence of employer-employee relationship between Angeles and the
respondents.
As a brief backgrounder, Angeles had earlier filed a complaint for illegal

dismissal against BSD Agro and/or its owner, Benjamin San Diego (San
Diego). The Labor Arbiter initially found that Angeles was an employee and that
he was illegally dismissed. On appeal, however, the NLRC reversed the Labor
Arbiters Decision and held that no employer-employee relationship existed
between Angeles and respondents. The ruling was anchored on the finding that the
duties performed by Angeles, such as carpentry, plumbing, painting and electrical
works, were not independent and integral steps in the essential operations of the
company, which is engaged in the poultry business. [4] Angeles elevated the case to
the Court of Appeals via petition for certiorari. The appellate court affirmed the
NLRC ruling and upheld the absence of employer-employee relationship.[5]Angeles
moved for reconsideration but it was denied by the Court of Appeals. [6] No further
appeal was undertaken, hence, an entry of judgment was made on 26 May 2001.[7]
At any rate, the SSC did not take into consideration the decision of the
NLRC. It denied respondents motion to dismiss in an Order dated 19 February
2002. The SSC ratiocinated, thus:
Decisions of the NLRC and other tribunals on the issue of existence of

employer-employee relationship between parties are not binding on the
Commission. At most, such finding has only a persuasive effect and does not
constitute res judicata as a ground for dismissal of an action pending before
Us. While it is true that the parties before the NLRC and in this case are the same,
the issues and subject matter are entirely different. The labor case is for illegal
dismissal with demand for backwages and other monetary claims, while the
present action is for remittance of unpaid SS[S] contributions. In other words,
although in both suits the respondents invoke lack of employer-employee
relationship, the same does not proceed from identical causes of action as one is
for violation of the Labor Code while the instant case is for violation of the SS[S]
Law.
Moreover, the respondents arguments raising the absence of employer-

employee relationship as a defense already traverse the very issues of the case at
bar, i.e., the petitioners fact of employment and entitlement to SS[S]
coverage. Generally, factual matters should not weigh in resolving a motion to
dismiss when it is based on the ground of failure to state a cause of action, but
rather, merely the sufficiency or insufficienciy of the allegations in the
complaint. x x x. In this respect, it must be observed that the petitioner very
categorically set forth in his Petition, that he was employed by the respondent(s)
from 1985 to 1997.[8]
A subsequent motion for reconsideration filed by respondents was likewise

denied on 11 June 2002. The SSC reiterated that the principle of res judicata does
not apply in this case because of the absence of the indispensable element of
identity of cause of action.[9]
Unfazed, respondents sought recourse before the Court of Appeals by way of

a petition for certiorari. The Court of Appeals reversed the rulings of the SSC and
held that there is a common issue between the cases before the SSC and in the
NLRC; and it is whether there existed an employer-employee relationship between
Angeles and respondents.Thus, the case falls squarely under the principle of res
judicata, particularly under the rule on conclusiveness of judgment, as enunciated
in Smith Bell and Co. v. Court of Appeals.[10]
The Court of Appeals disposed, thus:
WHEREFORE, the petition is GRANTED. The Order dated February

19, 2000 and the Resolution dated June 11, 2002 rendered by public respondent
Social Security Commissoin in SSC Case No. 9-15225-01 are
hereby REVERSED and SET ASIDE and the respondent commission is ordered
to DISMISS Social Security Commission Case No. 9-15225-01.[11]
After the denial of their motion for reconsideration in a Resolution [12] dated 9
February 2005, petitioner filed the instant petition.
For our consideration are the issues raised by petitioner, to wit:
WHETHER OR NOT THE DECISION OF THE NLRC AND THE COURT OF

APPEALS, FINDING NO EMPLOYER-EMPLOYEE RELATIONSHIP,
CONSTITUTES RES JUDICATA AS A RULE ON CONCLUSIVENESS OF
JUDGMENT AS TO PRECLUDE THE RELITIGATION OF THE ISSUE OF
EMPLOYER-EMPLOYEE RELATIONSHIP IN A SUBSEQUENT CASE
FILED BEFORE THE PETITIONER.
WHETHER OR NOT RESPONDENT COURT OF APPEALS MAY ORDER

OUTRIGHT THE DISMISSAL OF THE SSC CASE IN THE CERTIORARI
PROCEEDINGS BEFORE IT.[13]
SSC maintains that the prior judgment rendered by the NLRC and Court of
Appeals, that no employer-employee relationship existed between the parties, does
not have the force of res judicata by prior judgment or as a rule on the
conclusiveness of judgment. It contends that the labor dispute and the SSC claim
do not proceed from the same cause of action in that the action before SSC is for
non-remittance of SSS contributions while the NLRC case was for illegal
dismissal. The element of identity of parties is likewise unavailing in this case,
according to SSC. Aside from SSS intervening, another employer, Rizal Poultry,
was added as respondent in the case lodged before the SSC. There is no showing
that BSD Agro and Rizal Poultry refer to the same juridical entity. Thus, the
finding of absence of employer-employee relationship between BSD Agro and
Angeles could not automatically extend to Rizal Poultry. Consequently, SSC
assails the order of dismissal of the case lodged before it.
SSC also claims that the evidence submitted in the SSC case is different
from that adduced in the NLRC case. Rather than ordering the dismissal of the
SSC case, the Court of Appeals should have allowed SSC to resolve the case on its
merits by applying the Social Security Act of 1997.
Respondents assert that the findings of the NLRC are conclusive upon the
SSC under the principle of res judicata and in line with the ruling in Smith Bell v.
Court of Appeals. Respondents argue that there is substantially an identity of
parties in the NLRC and SSC cases because Angeles himself, in his Petition,
treated Rizal Poultry, BSD Agro and San Diego as one and the same entity.
Respondents oppose the view proffered by SSC that the evidence to prove
the existence of employer-employee relationship obtaining before the NLRC and
SSS are entirely different. Respondents opine that the definition of an employee
always proceeds from the existence of an employer-employee relationship.
In essence, the main issue to be resolved is whether res judicata applies so

as to preclude the SSC from resolving anew the existence of employer-employee
relationship, which issue was previously determined in the NLRC case.
Res judicata embraces two concepts: (1) bar by prior judgment as enunciated
in Rule 39, Section 47(b) of the Rules of Civil Procedure; and (2) conclusiveness
of judgment in Rule 39, Section 47(c).[14]
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. In this instance, the
judgment in the first case constitutes an absolute bar to the second action.[15]
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. This is the concept of res judicata known as
conclusiveness of judgment. Stated differently,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.[16]
Thus, if a particular point or question is in issue in the second action, and the
judgment will depend on the determination of that particular point or question, a
former judgment between the same parties or their privies will be final and
conclusive in the second if that same point or question was in issue and adjudicated
in the first suit. Identity of cause of action is not required but merely identity of
issue.[17]
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. Should
identity of parties, subject matter, and causes of action be shown in the two cases,
then res judicata in its aspect as a bar by prior judgment would apply. If as between
the two cases, only identity of parties can be shown, but not identical causes of
action, then res judicata as conclusiveness of judgment applies.[18]
Verily, the principle of res judicata in the mode of conclusiveness of

judgment applies in this case. The first element is present in this case. The NLRC
ruling was affirmed by the Court of Appeals. It was a judicial affirmation through a
decision duly promulgated and rendered final and executory when no appeal was
undertaken within the reglementary period. The jurisdiction of the NLRC, which is
a quasi-judicial body, was undisputed. Neither can the jurisdiction of the Court of
Appeals over the NLRC decision be the subject of a dispute. The NLRC case was
clearly decided on its merits; likewise on the merits was the affirmance of the
NLRC by the Court of Appeals.
With respect to the fourth element of identity of parties, we hold that there is
substantial compliance.
The parties in SSC and NLRC cases are not strictly identical. Rizal Poultry
was impleaded as additional respondent in the SSC case. Jurisprudence however
does not dictate absolute identity but only substantial identity. [19] 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, even if the latter was not
impleaded in the first case.[20]
BSD Agro, Rizal Poultry and San Diego were litigating under one and the
same entity both before the NLRC and the SSC. Although Rizal Poultry is not a
party in the NLRC case, there are numerous indications that all the while, Rizal
Poultry was also an employer of Angeles together with BSD Agro and San
Diego. Angeles admitted before the NLRC that he was employed by BSD Agro
and San Diego from 1985 until 1997.[21] He made a similar claim in his Petition
before the SSC including as employer Rizal Poultry as respondent. [22] Angeles
presented as evidence before the SSC his Identification Card and a Job Order to
prove his employment in Rizal Poultry. He clarified in his Opposition to the
Motion to Dismiss[23] filed before SSC that he failed to adduce these as evidence
before the NLRC even if it would have proven his employment with BSD
Agro. Most significantly, the three respondents, BSD Agro, Rizal Poultry and San
Diego, litigated as one entity before the SSC. They were represented by one
counsel and they submitted their pleadings as such one entity. Certainly, and at the
very least, a community of interest exists among them. We therefore rule that there
is substantial if not actual identity of parties both in the NLRC and SSC cases.
As previously stated, an identity in the cause of action need not obtain in order to
apply res judicata by conclusiveness of judgment. An identity of issues would
suffice.
The remittance of SSS contributions is mandated by Section 22(a) of the

Social Security Act of 1997, viz:
SEC. 22. Remittance of Contributions. - (a) The contributions imposed in

the preceding Section shall be remitted to the SSS within the first ten (10) days of
each calendar month following the month for which they are applicable or within
such time as the Commission may prescribe. Every employer required to deduct
and to remit such contributions shall be liable for their payment and if any
contribution is not paid to the SSS as herein prescribed, he shall pay besides the
contribution a penalty thereon of three percent (3%) per month from the date the
contribution falls due until paid. x x x.
The mandatory coverage under the Social Security Act is premised on the
existence of an employer-employee relationship.[24] This is evident from Section
9(a) which provides:
SEC. 9. Coverage. - (a) Coverage in the SSS shall be compulsory upon all
employees not over sixty (60) years of age and their employers: Provided, That in
the case of domestic helpers, their monthly income shall not be less than One
thousand pesos (P1,000.00) a month x x x.
Section 8(d) of the same law defines an employee as any person who
performs services for an employer in which either or both mental or physical
efforts are used and who receives compensation for such services, where there is an
employer-employee relationship. The illegal dismissal case before the NLRC
involved an inquiry into the existence or non-existence of an employer-employee
relationship. The very same inquiry is needed in the SSC case. And there was no
indication therein that there is an essential conceptual difference between the
definition of employee under the Labor Code and the Social Security Act.
In the instant case, therefore, res judicata in the concept of conclusiveness of
judgment applies. The judgment in the NLRC case pertaining to a finding of an
absence of employer-employee relationship between Angeles and respondents is
conclusive on the SSC case.
A case in point is Smith Bell and Co. v. Court of Appeals[25] which, contrary to
SSC, is apt and proper reference. Smith Bell availed of the services of private
respondents to transport cargoes from the pier to the company's warehouse. Cases
were filed against Smith Bell, one for illegal dismissal before the NLRC and the
other one with the SSC, to direct Smith Bell to report all private respondents to the
SSS for coverage. While the SSC case was pending before the Court of Appeals,
Smith Bell presented the resolution of the Supreme Court in G.R. No. L-44620,
which affirmed the NLRC, Secretary of Labor, and Court of Appeals finding that
no employer-employee relationship existed between the parties, to constitute as bar
to the SSC case. We granted the petition of Smith Bell and ordered the dismissal of
the case. We held that the controversy is squarely covered by the principle of res
judicata, particularly under the rule on conclusiveness of judgment. Therefore, the
judgment in G.R. No. L-44620 bars the SSC case, as the relief sought in the latter
case is inextricably related to the ruling in G.R. No. L-44620 to the effect that
private respondents are not employees of Smith Bell.
The fairly recent case of Co v. People,[26] likewise applies to the present case. An
information was filed against Co by private respondent spouses who claim to be
employees of the former for violation of the Social Security Act, specifically for
non-remittance of SSS contributions. Earlier, respondent spouses had filed a labor
case for illegal dismissal.The NLRC finally ruled that there was no employer-
employee relationship between her and respondent spouses. Co then filed a motion
to quash the information, arguing that the facts alleged in the Information did not
constitute an offense because respondent spouses were not her employees. In
support of her motion, she cited the NLRC ruling. This Court applied Smith
Bell and declared that the final and executory NLRC decision to the effect that
respondent spouses were not the employees of petitioner is a ruling binding in the
case for violation of the Social Security Act. The Court further stated that the
doctrine of conclusiveness of judgment also applies in criminal cases.[27]
Applying the rule on res judicata by conclusiveness of judgment in

conjunction with the aforecited cases, the Court of Appeals aptly ruled, thus:
In SSC Case No. 9-15225-01, private respondent Angeles is

seeking to compel herein petitioners to remit to the Social Security
System (SSS) all contributions due for and in his behalf, whereas in
NLRC NCR CA 018066-99 (NLRC RAB-IV-5-9028-97 RI) private
respondent prayed for the declaration of his dismissal illegal. In SSC No.
9-15225-01, private respondent, in seeking to enforce his alleged right to
compulsory SSS coverage, alleged that he had been an employee of
petitioners; whereas to support his position in the labor case that he was
illegally dismissed by petitioners BSD Agro and/or Benjamin San Diego,
he asserted that there was an employer-employee relationship existing
between him and petitioners at the time of his dismissal in 1997. Simply
stated, the issue common to both cases is whether there existed an
employer-employee relationship between private respondent and
petitioners at the time of the acts complaint of were committed both in
SSC Case No. 9-15225-01 and NLRC NCR CA 018066-99 (NLRC
RAB-IV-5-9028-977-RI).
The issue of employer-employee relationship was laid to rest in

CA GR. SP. No. 55383, through this Courts Decision dated October 27,
2000 which has long attained finality. Our affirmation of the NLRC
decision of May 18, 1999 was an adjudication on the merits of the case.
Considering the foregoing circumstances, the instant case falls

squarely under the umbrage of res judicata, particularly, under the rule
on conclusiveness of judgment. Following this rule, as enunciated
in Smith Bell and Co. and Carriaga, Jr. cases, We hold that the relief
sought in SSC Case No. 9-15225-01 is inextricably related to Our ruling
in CA GR SP No. 55383 to the effect that private respondent was not an
employee of petitioners.[28]
The NLRC decision on the absence of employer-employee relationship

being binding in the SSC case, we affirm the dismissal by Court of Appeals of the
SSC case.
WHEREFORE, premises considered, the petition is DENIED. The Court

of Appeals Decision dated 20 September 2004, as well as its Resolution dated 9
February 2005, is AFFIRMED.
SO ORDERED.
G.R. No. 217930
SPOUSES JORGE NAVARRA and CARMELITA NAVARRA, Petitioners,

vs.
YOLANDA LIONGSON, Respondent.
DECISION
MENDOZA, J:
This is a petition for review on certiorari under Rule 45 of the Rules of Court assailing the August 28,
2014 Amended Decision and the April 16, 2015 Resolution of the Court of Appeals (CA) in CA-G.R.
1 2
SP No. 105568, which reversed its December 8, 2011 Decision and recalled and set aside the entry
3
of judgment issued on January 6, 2012.
The Antecedents:
On September 23, 1993, Jose Liongson (Jose), the deceased husband of respondent Yolanda
Liongson (Yolanda), filed a complaint for damages based on malicious prosecution against spouses
Jorge and Carmelita Navarra (Spouses Navarra) and spouses Ruben and Cresencia
Bernardo (Spouses Bernardo) [collectively referred as defendant spouses], before the Regional Trial
Court, Branch 255, Las Piñas City (RTC).
After the presentation and formal offer of their respective evidence, the parties were required to file
their respective memoranda.
On January 4, 2001, Atty. Salvador B. Aguas (Atty. Aguas), counsel of Jose, filed the Motion for Time
to Submit Motion for Substitution of Plaintiff with Motion For Suspension/Commencement of
Counting of Period in Filing Pleadings informing the RTC of the death of Jose and praying for time to
4
submit a motion for substitution pending receipt of the death certificate.
On May 2, 2001, a Decision was rendered in favor of Jose ordering defendant spouses to pay
5
P500,000.00 for moral damages; P200,000.00 for exemplary damages; P20,000.00 for
reimbursement of expenses; P35,000.00 for substantial number of appearance, P50,000.00 for
attorney’s fees; and the costs of suit.
On July 13, 2001, defendant spouses filed their Motion for Declaration of Nullity of the Decision
and/or Notice of Appeal based on the absence of a valid substitution of Jose.
6
Consequently, Atty. Aguas filed the Motion for Substitution, dated July 30, 2001, praying that Jose
7
be substituted by his surviving wife, Yolanda.
In its Order, dated May 13, 2002, the RTC denied the motion for declaration of nullity of the May 2,
8
2001 decision. Defendant spouses then elevated the matter before the CA, docketed as CA-G.R. CV
No. 74988. In a Resolution[[,9]] dated July 30, 2004, the CA dismissed the petition for want of
appellant’s brief. On August 30, 2004, an entry of judgment was issued.
10
Thereafter, Atty. Aguas filed a motion for execution, but it was opposed by defendant spouses on
11
the ground that no valid substitution had been made, and that the continued appearance of Atty.
Aguas was ultra vires. 12
In the Order, dated October 28, 2005, the motion for execution was deemed withdrawn upon motion
13
of Atty. Aguas.
On November 20, 2005, Atty. Aguas filed a pleading denominated as Motions to Resolve Motion for
Substitution of Parties, dated July 31, 2001 or Considered it Deemed Admitted, and Thereafter Issue
Writ of Execution of the Judgment, dated May 2, 2001, in the name of Yolanda Liongson
as Substituting Party for Plaintiff Jose Liongson. In the said motion, it was prayed that Yolanda be
14
allowed to substitute her deceased husband and that a writ of execution be issued in her favor.
Attached to the motion was a copy of the death certificate of Jose indicating that the latter died on
15
November 28, 2000.

In the Order, dated March 17, 2006, the RTC denied the motion to resolve the motion for
16
substitution of parties and the motion for issuance of a writ of execution for lack of merit.
In the meantime, Yolanda filed a petition for issuance of letters of administration of the estate of
Jose, her deceased husband, before the Regional Trial Court, Branch 274, Parañaque City. In the
December 29, 2006 Order, the Letter of Administration was issued appointing Yolanda as
administratix of the estate of Jose.
Thus, acting as the administratix of the estate of Jose, Yolanda filed a motion for execution of the
May 2, 2001 decision.[[ 17]] It was, however, denied in an Order, dated September 14, 2007, on the
18
ground that no proper substitution had been made yet.
Unperturbed, Yolanda, thru her new counsel, Atty. Bonifacio G. Caboboy (Atty. Caboboy), filed her
Motion to Substitute the Plaintiff Jose Liongson which was finally granted by the RTC in the
19
Order, dated January 25, 2008.

20
Defendant spouses then filed a motion for reconsideration of the January 25, 2008 Order. On May 21
22, 2008, the RTC denied the said motion. 22
Defendant spouses then filed a petition for certiorari before the CA, docketed as CA-G.R. SP No.
104667, assailing the January 25, 2008 and May 22, 2008 orders of the RTC. They insisted that the
issue of substitution had been laid to rest by the RTC on three (3) occasions and Yolanda did not
question the propriety of its denial. Hence, she was forever barred from effecting the substitution.
Meanwhile, Yolanda filed her Motion for Execution of Judgment which was granted by the RTC in its
23
Order, dated July 25, 2008. On August 1, 2008, a writ of execution was issued and the Notice to
24 25
Pay, dated August 5, 2008, was served upon defendant spouses. The latter then filed a motion to
26
recall or hold in abeyance the implementation of the writ of execution and the sheriff’s notice to pay.
Without waiting for the RTC to rule on the said motion, defendant spouses filed another petition
for certiorari under Rule 65 of the Rules of Court before the CA, docketed as CA-G.R. SP No.
105568, this time questioning the July 25, 2008 Order and the August 1, 2008 Writ of Execution
issued by the RTC. Defendant spouses insisted that the RTC gravely abused its discretion when it
allowed the substitution and then issued the writ of execution.
In its January 16, 2009 Order, the RTC denied the motion to recall or hold in abeyance the
27
implementation of the August 1, 2008 writ of execution and the August 5, 2008 sheriff’s notice to pay
for lack of merit. Thereafter, the notice of garnishment and the notice of levy were issued. Spouses
Navarra’s property, covered by TCT No. 103473, was levied and subsequently sold in a public
auction pursuant to the writ of execution. 28
Meanwhile, on October 28, 2009, the CA rendered a Decision, in CA-G.R. SP No.

29
104667, dismissing the petition for certiorari and declaring the substitution of plaintiff in order. The
CA held that the rule on substitution was not a matter of jurisdiction but a requirement of due
process; and that considering that both parties had already completed the presentation of their
evidence in chief before Jose died, neither of them was denied due process of law. Thus, the CA
stated that the belated substitution of Jose as plaintiff to the case did not affect the validity of the final
and executory judgment.
On December 8, 2011, a decision was rendered in CA-G.R. SP No. 105568, in favor of defendant
30
spouses. The CA reversed and set aside the questioned RTC order granting the motion for
execution and the issuance of the writ of execution. The CA held that the complaint for damages,
arising from malicious prosecution filed by Jose against defendant spouses was a purely personal
action that did not survive upon his death; and because the action was deemed abated upon his
death, the RTC was found to have gravely abused its discretion when it allowed the substitution of
Jose and issued the writ of execution. The CA further stated that upon the death of Jose, the RTC
lost jurisdiction over the case and the decision rendered therein was a void judgment; hence, all acts
performed pursuant thereto and all claims emanating therefrom had no legal effect.
On January 6, 2012, the December 8, 2011 decision of the CA in CAG. R. SP No. 105568 became
final and executory and the entry of judgment was issued.
31
On December 16, 2013, almost two years later, Yolanda filed her Urgent Omnibus Motion praying
32
for the recall/lifting of the entry of judgment and for the admission of the attached motion for
reconsideration. Yolanda contended that she was totally unaware of this petition for certiorari filed
before the CA and docketed as CA-G.R. SP No. 105568; that although notices were sent to her
counsel, Atty. Caboboy, the latter did not inform or furnish her with copies of the notices and the
petition; that Atty. Caboboy did not file any comment on the petition or a motion for reconsideration;
and that Atty. Caboboy’s gross negligence and mistake should not bind her because the said
negligence and mistake would amount to deprivation of her property without due process of law.
On August 28, 2014, the CA promulgated an amended decision in CA-G.R. SP No. 105568. While
the CA took note that no comment was filed by defendant spouses despite notice, it granted the
omnibus motion and the motion for reconsideration filed by Yolanda. The appellate court recalled
and set aside the entry of judgment and reversed its December 8, 2011 decision in the interest of
substantial justice. The CA discovered that the appellate court rendered two conflicting decisions in
CA-G.R. SP No. 104667 and CA-G.R. SP No. 105568. In CA-G.R. SP No. 104667, earlier filed by
defendant spouses, the appellate court arrived at a decision allowing the substitution of Jose. The
same issue of substitution was debunked in the December 8, 2011 CA decision in CA-G.R. SP No.
105568.
In its amended decision, the CA did not apply the general rule that the negligence of counsel would
bind the client so as not to deprive Yolanda of her right to due process of law. On the merits, the CA
ruled that the action filed by Jose before the RTC was not extinguished upon his death as it was one
for recovery of damages for injury to his person caused by defendant spouses’ tortuous conduct of
maliciously filing an unfounded suit.
Spouses Navarra (petitioners) filed their separate motions for reconsideration, but both were denied
by the CA in a Resolution, dated April 16, 2015.
33
Hence, this petition anchored on the following –
GROUNDS FOR THE PETITION
THE COURT OF APPEALS DECIDED THE INSTANT CASE IN A WAY NOT IN ACCORD WITH
LAW AND WITH THE APPLICABLE DECISIONS OF THE SUPREME COURT.
A. THE COURT OF APPEALS BREACHED THE WELLSETTLED RULE THAT A FINAL

AND EXECUTORY JUDGMENT MAY NO LONGER BE MODIFIED IN ANY RESPECT,
EVEN IF THE MODIFICATION IS MEANT TO CORRECT WHAT IS PERCEIVED TO BE AN
ERRONEOUS CONCLUSION OF LAW OR FACT.
B. THE COURT OF APPEALS ERRED WHEN IT AMENDED A FINAL AND EXECUTORY
DECISION UPON PRIVATE RESPONDENT’S MERE MOTION FOR RECONSIDERATION.
C. THE COURT OF APPEALS LEGALLY ERRED IN EXCEPTING THE INSTANT CASE

FROM THE RULE THAT THE MISTAKE OR NEGLIGENCE OF COUNSEL BINDS THE
CLIENT.
D. AT ALL EVENTS, THE COURT OF APPEALS LEGALLY ERRED IN DISMISSING THE

PETITION IN CA-G.R. SP NO.105568.[[34]]
Petitioners argue that it is beyond the power of the CA to amend its original decision in this case,
dated December 8, 2011, for it violates the principle of finality of judgment and its immutability. They
point out that the said CA decision had acquired finality, hence, it could no longer be modified in any
respect even if the modification was meant to correct erroneous conclusions of fact or law, or it
would be made by the court that rendered it or by the highest court of the land.
Petitioners also aver that there was no conflict in the decisions rendered by the CA in CA-G.R. SP
No. 104667 and in the present case as the two cases involved different issues. The former case
ruled on the validity of the January 25, 2008 Order of the RTC which granted the substitution of Jose
by Yolanda, while the present case questioned the July 25, 2008 Order of the RTC
which granted the motion for execution of judgment filed by Yolanda.
Finally, petitioners assert that the CA erred when it granted the motion for reconsideration filed by
Yolanda after almost two years from the time the decision was rendered. They point out that Yolanda
did not even indicate in
her motion for reconsideration the exact date of her receipt of the copy of the December 8, 2011
decision and that it could not be presumed that she learned of it only two (2) years after its issuance.
They contend that the respondent was negligent because she waited for two long years before she
filed a motion for reconsideration. They added that she should have made efforts to ascertain the
status of the case considering that she was appointed administratix of the estate of Jose.
Respondent Yolanda counters that the CA was correct when it reversed and set aside its December
8, 2011 decision and dismissed the petition for certiorari as the issues therein had already been laid
to rest in the October 28, 2009 CA decision in CA- G.R. SP No. 104667. She argues that because
the petitions in both CA- G.R. SP No. 104667 and CA- G.R. SP No. 105568, involved the same
issues and parties under similar factual and legal settings, the decision rendered in the first case
became final and could no longer be changed, revised or reversed.
All the arguments by both parties boil down to the lone issue of whether or not the CA erred and
violated the principle of immunity of judgment when it amended its December 8, 2011 decision.
The petition is not meritorious.
Well-settled is the rule that a judgment that has acquired finality "becomes immutable and
unalterable, and may no longer be modified in any respect, even if the modification is meant to
correct erroneous conclusions of fact and law, and whether it be made by the court that rendered it
or by the Highest Court of the land." The rationale of this doctrine is to avoid delay in the
35
administration of justice and in order to put an end to judicial controversies. In the case of Manotok
Realty, Inc. v. CLT Realty Development Corp., the Court explained the principle of immunity of
36
judgment in this wise:
The doctrine of finality of judgment is grounded on fundamental considerations of public policy and
sound practice,
and that, at the risk of occasional errors, the judgments or orders of courts must become final at
some definite time fixed by law; otherwise, there would be no end to litigations, thus setting to
naught the main role of courts of justice which is to assist in the enforcement of the rule of law and
the maintenance of peace and order by settling justiciable controversies with finality.37
Nonetheless, this doctrine may be relaxed in order to serve substantial justice in case compelling
circumstances that clearly warrant the exercise of the Court’s equity jurisdiction are extant. Thus,
38
like any other rule, it has exceptions, such as: (1) the correction of clerical errors; (2) the so-
called nunc pro tunc entries which cause no prejudice to any party; (3) void judgments; and (4)
whenever circumstances transpire after the finality of the decision rendering its execution unjust and
inequitable. After all, the rules of procedure intend to promote the ends of justice, thus, their strict
39
and rigid application must always be eschewed when it would subvert its primary objective. 40
The issue posed before the Court is not of first impression. It involves three conflicting final and
executory judgments rendered by the RTC and the CA. The first is the May 2, 2001 RTC decision
which granted the complaint
for damages. The second is the October 28, 2009 CA decision in CA-G.R. SP No. 104667 which
granted the motion for substitution and the motion for execution. The third, which is obviously in
conflict with the first and second judgment, is the December 8, 2011 CA decision in CA-G.R. SP No.
105568 which not only reversed and set aside the motion for execution but also declared the May 2,
2001 RTC decision a void judgment.
Where a certain case comprises two or more conflicting judgments which are final and executory, the
Court, in the case of Collantes v. Court of Appeals (Collantes), offered three (3) options in resolving
41
the same. First, the court may opt to require the parties to assert their claims anew; second, to
determine which judgment came first; and third, to determine which of the judgments had been
rendered by a court of last resort.
In the case of Heirs of Maura So v. Obliosco, the Court stated that it was more equitable to apply
42
the second and third options mentioned in Collantes. It, thus, sustained the earlier decisions over the
current ones, as they already had vested rights over the winning party, and accorded more respect
to the decisions of this Court than those made by the lower courts.
The Court, in Government Service Insurance System v. Group Management Corporation, also 43
resorted to the second and third options and affirmed the finality of the earlier decisions rendered by
the Court. The Court held that:
In Collantes, this Court applied the first option and resolved the conflicting issues anew. However,
resorting to the first solution in the case at bar would entail disregarding not only the final and
executory decisions of the Lapu-Lapu RTC and the Manila RTC, but also the final and executory
decisions of the Court of Appeals and this Court. Moreover, it would negate two decades worth of
litigating. Thus, we find it more equitable and practicable to apply
the second and third options consequently maintaining the finality of one of the conflicting
judgments. The primary criterion under the second option is the time when the decision was
rendered and became final and executory, such that earlier decisions should prevail over the current
ones since final and executory decisions vest rights in the winning party. In the third solution, the
main criterion is the determination of which court or tribunal rendered the decision. Decisions of this
Court should be accorded more respect than those made by the lower courts. 44
Guided by these jurisprudence, the Court agrees with the CA that it would be more equitable to
make use of the second option mentioned in Collantes and sustain the finality of the earlier decisions
rendered by the RTC and the CA in CA-G.R. SP No. 104667. To recall, the RTC decision in the
complaint for damages was promulgated as early as May 2, 2001 and became final and executory
on August 30, 2004. The only reason why the said decision was not immediately executed was the
45
petitioners’ insistence on the improper substitution of plaintiff. This issue, however, was laid to rest
on October 8, 2009 by the CA when it rendered its decision in CA-G.R. SP
No. 104667. The CA declared that the decision and the proceedings in the said case were not
rendered nugatory notwithstanding the belated compliance with the rules on substitution as none of
the parties was denied
due process. The appellate court further stated that the rule on the substitution by heirs was not a
matter of jurisdiction, but a requirement of due process. It follows therefore, that when due process is
not violated as when the right of the representative or heir is recognized and protected,
noncompliance or belated formal compliance with the rules cannot affect the validity of a
promulgated decision. Moreover, the Court notes that petitioners did not question the propriety of
46
the May 2, 2001 decision in their petition in CA-G.R. SP No. 104667 but even admitted the finality
and executory nature of the said decision and their only concern was how the said decision would be
executed without a valid substitution of the plaintiff.
Clearly, the October 28, 2009 decision of the CA in CA-G.R. SP No. 104667 constituted res
judicata with respect to the latter case in CA-G.R. SP No. 105568. "Res judicata is defined as ‘a
1âwphi1
matter adjudged; a thing judicially acted upon or decided; a thing or matter settled by judgment.’ " 47
Based on this principle, a final judgment or order on the merits, rendered by a competent court on
any matter within its jurisdiction, "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." Simply
48
put, "a final judgment on the merits rendered by a court of competent jurisdiction, is conclusive as to
the rights of the parties and their privies and constitutes an absolute bar to subsequent actions
involving the same claim, demand, or cause of action." 49
For res judicata to serve as an absolute bar to a subsequent action, the following requisites must
concur: (a) the former judgment is final; (b) it was rendered by a court having jurisdiction over the
subject matter and the parties; (c) it is a judgment on the merits; and, (d) there is, between the first
and second actions, identity of parties, of subject matter and of cause of action. 50
In the present case, there is no quibble that all the elements adverted to above obtain in this case.
There is no dispute that the December 2, 2001 RTC decision had become final and executory and
the entry of judgment was issued on August 30, 2004. There is no question either that the RTC had
jurisdiction over the subject matter and the parties, and that the decision was a judgment on the
merits.
The controversy arose when petitioners questioned the propriety of the substitution of Jose before
the CA in CA-G.R. SP No. 104667 and subsequently the July 25, 2008 RTC order and its August 1,
2008 writ of execution in CA-G.R. SP No. 105568, which was raffled to a different division of the CA.
Although petitioners would like to impress to this Court that the issues raised in two cases before the
CA were anchored on different causes of action, the Court rules otherwise. Under the doctrine of
conclusiveness of judgment, facts and issues actually and directly resolved in a former suit can
never again be raised in any future case between the same parties even involving a different cause
of action. The CA decision in CA-G.R. SP No. 104667 concerning the validity of plaintiffs
51
substitution became conclusive on the parties. Thus, petitioners cannot again seek refuge by filing
their second petition (CA-G.R. SP No. 105568) in the guise of questioning the order of execution but
actually invoking the alleged nullity of the substitution of plaintiff. Petitioners cannot evade or avoid
the application of res judicata by· simply varying· the form of his action or adopting a different
method of presenting their case. 52
Indeed, it is time to put an end to this litigation as the enforcement of the final judgment has long
been delayed. In the interest of justice, petitioners are ordered to respect and comply with the final
and executor judgment of the Court. As stated in the case of Selga v. Sony Entierro Brar : 53
It must be remembered that it is to the interest of the public thatthere should be an end to litigation
by the parties over a subject fully and fairly adjudicated. The doctrine of res judicata is a rule that
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 dictates that it
would be in 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 pro una et eadem causa. A contrary doctrine would subject 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 public tranquility and happiness. 54
WHEREFORE, the petition is DENIED. The August 28, 2014 Amended Decision and the April 16,
2015 Resolution of the· Court of Appeals in CA-G.R. SP No. 105568 are AFFIRMED.
SO ORDERED.
G.R. No. 202531, August 17, 2016
GOMECO METAL CORPORATION, Petitioner, v. THE COURT OF APPEALS, AND *PAMANA ISLAND
RESORT HOTEL AND MARINA CLUB, INCORPORATED, Respondents.
DECISION
PEREZ, J.:
This is a petition for certiorari,1 assailing the Decision2 dated 28 December 2011 and Resolution3 dated 28
June 2012 of the Court of Appeals (CA) in CA-G.R. SP No. 119053.
The facts:
chanRoblesvirtualLawlibrary
Parties and Civil Case No. 4349-V-94
Petitioner Gomeco Metal Corporation (Gomeco) is a domestic corporation engaged in the business of selling
steel and metal products. Respondent Pamana Island Resort Hotel and Marina Club, Inc. (Pamana), on the
other hand, is a domestic-corporation engaged in the business of operating leisure resorts.
In 1994, Gomeco filed a Complaint for Collection of Sum of Money (Complaint) against Pamana before the
Regional Trial Court (RTC) of Valenzuela City. In the Complaint, Gomeco sought to collect payment for the
stainless steel products4 it sold to Pamana in 1991. The Complaint was raffled to Branch 75 and was
docketed as Civil Case No. 4349-V-94.
In 1997, Gomeco and Pamana entered into a Compromise Agreement 5 to end litigation in Civil Case No.
4349-V-94. The compromise agreement, which required Pamana to pay Gomeco P1,800,000.00, was
consequently approved by the RTC in an Order dated 16 January 1997. 6 chanrobleslaw
Writ of Execution and First Notice of Levy
Of the P1,800,000.00 that was due Gomeco under the compromise agreement, however, Pamana was
actually able to pay only P450,000.00. This eventually led the RTC, on 2 March 1998, to issue an order
directing Pamana, within twenty (20) days from its receipt thereof, to pay Gomeco P1,350,000.00 or the
remaining balance under the compromise agreement. Such order, however, was unheeded by Pamana.
Thus, the RTC, upon application therefor by Gomeco, issued a Writ of Execution 7 on 7 May 1998
commanding the court's sheriff, then one Jaime T. Montes (Sheriff Montes), to enforce the court-approved
compromise agreement against Pamana.
Pursuant to the writ of execution, Sheriff Montes first garnished Pamana's bank accounts by sending notices
of garnishment with the Philippine National Bank, Metropolitan Bank and Trust Company, Westmont Bank,
Union Bank and Prudential Bank. The garnishment of Pamana's accounts with the aforementioned banks
yielded futile results, however, as the same failed to satisfy, whether fully or in part, Pamana's
indebtedness.
Hence, on 22 May 1998, Sheriff Montes issued a Notice of Levy8 placing under levy on execution one of
Pamana's real estate properties—the 53,285 square meter Pequeña Island in Subic, Zambales. On the belief
that the Pequeña Island is property not registered under the Torrens System, such island was identified in
the notice of levy by Tax Declaration No. 007-0001 with Property Index No. 016-13-007-01-001. 9 chanrobleslaw
Notable, moreover, are the following entries in the notice of levy:
1. The amount of the levy on the Pequeña Island was fixed at "P2,065,500.00."
2. The property being levied, i.e., Pequeña Island, was referred to as "personal properties" of Pamana.
Notice of Sheriff's Sale, Execution Sale and CA-G.R. SP No. 62391
On 11 December 2000, with Pamana's indebtedness still unsatisfied, Sheriff Montes issued a Notice of
Sheriff Sale10 on the Pequeña Island. Like the notice of levy, the notice of sheriffs sale identified the Pequeña
Island through Tax Declaration No. 007-0001 with Property Index No. 016-13-007-01-001. It set the public
auction of the Pequeña Island on 10 January 2001.
The notice of sheriff s sale bears the following entries:

1. The amount of levy on the Pequeña Island was fixed at "P2,065,00[0].00."
2. The property levied and the subject of public auction, i.e., the Pequeña Island, was referred to as
the "personal/real properties" of Pamana.
The notice of sheriffs sale was duly posted and published in a newspaper of general circulation in the
manner required by Section 15(c) of Rule 39 of the Rules of Court.
On 28 December 2000, Pamana filed a Petition for Prohibition (with prayer for the issuance of a temporary
restraining order) before the CA, seeking to nullify the notice of sheriff s sale and enjoin the public auction
of the Pequeña Island scheduled thereunder. The Petition was docketed in the CA as CA-G.R. SP No. 62391
and impleaded Gomeco and Sheriff Montes as respondents. On 9 January 2001, i.e., a day before the public
auction of the Pequeña Island was scheduled to take place pursuant to the notice of sheriffs sale, the CA
issued a temporary restraining order (TRO) against holding such public auction.
Despite the TRO issued by the CA, however, the public auction of the Pequeña Island still pushed through,
as scheduled, on 10 January 2001. As it happened, the TRO was not served upon Gomeco and Sheriff
Montes until moments after the public auction was already concluded.
At the 10 January 2001 public auction, Gomeco became the winning bidder for the Pequeña Island at the
price of P2,065,000.00.
Aggrieved by the turn of events, Pamana filed a Supplementary Petition in CA-G.R. SP No. 62391 asking the
CA to strike down as null and void the 10 January 2001 public auction of the Pequeña Island.
On 22 March 2001, a Sheriff's Certificate of Sale covering the Pequeña Island was issued in favor of
Gomeco. On 28 March 2001, the said certificate was registered11 with the Register of Deeds (RD) of Iba,
Zambales, under the Registry of Unregistered Properties pursuant to Section 194 of Republic Act No. 2711
or the Revised Administrative Code of 1917, as amended by Republic Act No. 3344. 12 chanrobleslaw
Decision of the CA in CA-G.R. SP No. 62391
On 19 February 2002, the CA rendered a Decision13 in CA-G.R. SP No. 62391 declaring as null and void the
Notice of Sheriff s Sale and the 10 January 2001 public auction of the Pequeña Island. Underlying such
declaration is the CA's finding that the Notice of Levy and the Notice of Sheriffs Sale were fatally defective
due to their erroneous indication that the levy thereunder was enforceable up to the amount of
P2,065,000.00, instead of only up to the P1,350,000.00 remaining indebtedness of Pamana under the
compromise agreement plus other lawful fees.14 chanrobleslaw
Gomeco filed a Motion for Reconsideration.
Acting on Gomeco's Motion for Reconsideration, the CA issued a Resolution 15 dated 9 July 2002. In the said
Resolution, the CA modified its earlier Decision and declared the levy and the ensuing 10 January 2001
public auction to be valid but only to the extent of the P1,350,000.00 remaining indebtedness of Pamana
plus 12% legal interest thereon and other lawful fees in the implementation of such levy and auction. 16 chanrobleslaw
Pamana, in turn, filed a Motion for Reconsideration.
On 16 January 2003, the CA issued a Resolution17 wherein it affirmed in all respects its 9 July 2002
Resolution except only to the inclusion of the "12% legal interest" as a component of the entire amount
satisfiable by the levy and execution sale.
The 16 January 2003 Resolution of the CA became final and executory on 10 February 2003. 18 chanrobleslaw
Motion for Clarification in CA-G.R. SP No. 62391
After the finality of the 16 January 2003 Resolution, Pamana filed with the CA a Motion for Clarification in
CA-G.R. SP No. 62391. In the said motion, Pamana asked the CA to require disclosure of the list of
properties in the Pequeña Island that were levied upon and sold during the 10 January 2001 public auction,
and their corresponding values.
Pamana's Motion for Clarification rests on the following key assumptions: ChanRoblesVirtualawlibrary
1. The object of the Notice of Levy is not actually the Pequeña Island itself but only the "personal
properties" in the said island;
2. The 10 January 2001 public auction resulted in the sale not of the Pequeña Island but only of
certain properties therein;
3. The notice of levy, the Minutes of Auction Sale and the Sheriffs Return, however, did not specify
which personal properties in the Pequeña Island were actually levied and sold during the 10 January
2001 public auction; and cralawlawlibrary
4. The Minutes of Auction Sale and the Sheriffs Return did not reveal for how much Pamana's
properties in the Pequeña Island had been sold during the 10 January 2001 public auction.
The CA, at first, denied Pamana's Motion for Clarification. However, on 17 September 2004, the CA issued a
Resolution19 directing Deputy Sheriff Montes to "point out which of petitioner's specific properties [in the
Pequeña Island] had been levied and sold in public auction and to determine the exact value of said
properties if sufficient to satisfy in full the judgment debt of [P]1,350,000.00 and other lawful expenses" and
to "return to [Pamana] such amount, if any, in excess of the judgment debt."20 chanrobleslaw
TCT No. T-38774
Meanwhile, on 29 January 2003, Gomeco was issued a Sheriff's Final Deed of Sale21 over the Pequeña
Island. The Sheriffs Final Deed of Sale attested that Pamana had failed to exercise his right of redemption
on the Pequeña Island within the period allowed by law and that, as a consequence thereof, Gomeco was
now absolute owner of the said island. Like the Sheriffs Certificate of Sale, the Sheriffs Final Deed of Sale
was registered22 with the RD of Iba, Zambales, under the Registry of Unregistered Properties pursuant to
Section 194 of the Revised Administrative Code of 1917, as amended.
Sometime in March 2003, however, Gomeco discovered that the Pequeña Island was not, as it formerly
believed, unregistered property but was in fact registered land under Transfer Certificate of Title (TCT) No.
T-38774 in the name of Pamana. This discovery prompted Gomeco to file, before the RTC in Civil Case No.
4349-V-94, a Motion for the Cancellation of Pamana's Title and the issuance of a new title in its (Gomeco)
name (Motion for Cancellation of Title).
On 5 January 2005, the RTC issued an Order23 granting Gomeco's Motion for Cancellation of Title and
directing the RD of Iba, Zambales, to cancel Pamana's title over Pequeña Island and to issue a new title in
lieu thereof in the name of Gomeco. In the body, as well as the dispositive portion of the said Order,
however, the RTC mistakenly identified Pamana's title as TCT No. T-38744 instead of TCT No. T-38774.
Against the foregoing Order of the RTC, Pamana filed an Urgent Motion for Reconsideration and a Motion for
Correction of the Order dated 5 January 2005 (Motion for Correction).
In its Urgent Motion for Reconsideration, Pamana assails the 5 January 2005 Order of the RTC primarily for
being contrary to the resolutions of the CA in CA-G.R. SP No. 62391. Pamana alleged that it was erroneous
for the RTG to recognize Gomeco's absolute ownership over the Pequeña Island since the CA, in CA-G.R. SP
No. 62391, already substantially nullified the levy and public auction on the said island. Pamana also
contended that the Sheriffs Final Deed of Sale was still premature in light of the 17 September 2004
Resolution of the CA that required an accounting of the properties sold and the proceeds realized from the
10 January 2001 public auction. For Pamana, no such final deed of sale can be issued in favor of Gomeco
unless the 17 September 2004 Resolution is first complied with to the letter.
In its Motion for Correction, on the other hand, Pamana asked that its title over Pequeña Island, as stated in
the 5 January 2005 Order, be changed from TCT No. T-38744 to TCT No. T-38774.
On 20 April 2005, Gomeco, for its part, filed a Motion to Order the Appointed Sheriff to Annotate the Notice
of Levy, Deed of Sale and Sheriffs Final Deed "of Sale [in] TCT No. T-38774 (Motion to Order Annotation). In
the said motion, Gomeco prayed that the RTC, pending the possible cancellation of TCT No. T-38774 and the
issuance of a new title in its name, order the annotation of the Notice of Levy, Certificate of Sheriff s Sale
and the Sheriffs Final Deed of Sale in TCT No. T-38774.
On 3 March 2011, the RTC issued an Order:24
1. Denying Pamana's Urgent Motion for Reconsideration;
2. Granting Pamana's Motion for Correction;
3. Granting Gomeco's Motion to Order Annotation; and cralawlawlibrary
4. Directing its incumbent sheriff, for the purpose ascertaining the total amount of money for which
the levy and sale of the Pequeña Island were meant to satisfy, to compute the actual amount of the
lawful fees and expenses incurred in connection with the enforcement of the writ of execution.
In compliance with the directive regarding the computation of the actual amount of lawful fees and expenses
in the enforcement of the writ of execution, Sheriff Louie C. Dela Cruz (Sheriff Dela Cruz) submitted to the
RTC its Report25 dated 16 March 2011. In the said report, the lawful fees and expenses for the enforcement
cralawred
of the writ of execution were pegged at P111,767.75.
On 25 March 2011, the RD of Iba, Zambales cancelled TCT No. T-38774 in the name of Pamana and,1 in lieu
thereof, issued TCT No. 044-2011000502 in favor of Gomeco.
CA-G.R. SP No. 119053
On 18 April 2011, Pamana filed with the CA a Petition for Certiorari assailing the 5 January 2005 and 3
March 2011 Orders of the RTC. This Petition was docketed as CA-G.R. SP No. 119053.
During the pendency of the CA-G.R. SP No. 119053, on 6 June 2011, Pamana filed with the CA an Urgent
Motion to Approve Tender of Payment and Consignation accompanied with checks in the aggregate amount
of P1,500,000.00. In the said motion, Pamana prayed that the CA approve the checks so submitted as a
valid tender of payment and consignation as against all of its outstanding indebtedness (i.e., the
P1,350,000.00 remaining balance under the compromise agreement plus the P111,767.75 lawful fees and
expenses in the enforcement of the writ of execution).
Decision of the CA in CA-G.R. SP No. 119053
On 28 December 2011, the CA rendered a Decision26 in CA-G.R. SP No. 119053, setting aside the 5 January
2005 and 3 March 2011 Orders of the RTC in Civil Case No. 4349-V-94. The CA also directed therein the
Registrar of Deeds of Iba, Zambales, to cancel TCT No. 044-2011000502 in the name of Gomeco and to
reinstate TCT No. T-38774 in favor of Pamana.
Siding with Pamana, the CA held that it was grave abuse of discretion on the part of the RTC to have
recognized Gomeco's absolute ownership over the Pequeña Island. In support, the CA gives the following
ratiocinations:
1. There was no valid levy on the Pequeña Island.27
a. The Resolutions in CA-G.R. SP No. 62391 already substantially nullified the levy and public
auction on the Pequeña Island.
b. The Notice of Levy and the Notice of Sheriffs Sale issued by Sheriff Montes cannot be
considered as a valid levy on the Pequeña Island. The two notices confuse as to what
properties are being subjected to levy; the Notice of Levy says "personal properties" but
the Notice of Sheriffs Sale says "personal/realproperties."
c. Neither Notice of Levy nor the Notice of Sheriffs Sale was registered with the RD.
d. Any levy on Pequeña Island must be preceded by a levy on Pamana's personal properties as
is required by Rule 39 of the Rules of Court. In this case, Sheriff Montes did not bother to
levy on Pamana's other personal properties but instead levied the entire Pequeña Island at
the very first instance.
2. Even assuming that the Pequeña Island had been validly levied upon and sold in execution, the
period of redemption in favor of Pamana was not yet fully exhausted by the time a Sheriffs Final
Deed of Sale was issued in favor of Gomeco. Indeed, the period of redemption in favor of Pamana
could not be considered to have even begun since the Sheriffs Certificate of Sale covering the
Pequeña Island was not registered in the correct registry. It is to be pointed out that Sheriffs
Certificate of Sale had been erroneously registered in the Registry of Unregistered Properties,
despite the fact that the Pequeña Island is property titled under the Torrens system. Hence, even
though the levy and auction on the Pequeña may be valid, Gomeco still could not acquire absolute
ownership of the disputed island.28
Moreover, in the same Decision, the CA granted and approved Pamana's Urgent Motion to Approve Tender
of Payment and Consignation. The CA considered Pamana's submission of checks as a valid tender of
payment and consignation and declared all of the latter's indebtedness thereby extinguished.
Gomeco moved for reconsideration but the CA, in its Resolution 29 dated 28 June 2012, remained steadfast.
This Petition
Aggrieved, Gomeco filed the instant Petition for Certiorari before this Court.
In this Petition, Gomeco claims that the CA gravely abused its discretion when it ruled: (a) to reinstate
Pamana's title to the Pequeña Island and (b) to consider the Pamana's submission of checks as a valid
tender of payment and consignation for all of its outstanding indebtedness. Gomeco argues that such rulings
rest on findings that were patently erroneous.
Gomeco thus prays for the nullification of the Decision of the CA in CA-G.R. SP No. 119053, as well as for
the restoration of the 5 January 2005 and 3 March 2011 Orders of the RTC in Civil Case No. 4349-V-94.
OUR RULING
The Decision of the CA in CA-G.R. SP No. 119053 is underpinned, primarily, by two findings: first, that there
was no valid levy upon the Pequeña Island and second, that—even assuming that there was such a valid
levy—the redemption period in favor of Pamana was not yet fully exhausted by the time a Sheriffs Final
Deed of Sale was issued in favor of Gomeco. We have examined both findings in light of the facts and the
applicable law. And we found that Gomeco is right; both findings were patently erroneous.
The erroneous findings—most especially the first—were of such gross nature that they indicate that the CA,
in making them, had at the least committed grave abuse of discretion, if not acted wholly beyond its
jurisdiction.
We are therefore compelled to GRANT the instant Petition.
A. The First Finding: Levy on Pequeña Island
The finding by the CA that there was no valid levy on the Pequeña Island is erroneous for one essential
reason—it directly contradicts what the appellate court itself already finally settled through its 16 January
2003 Resolution in CA-G.R. SP No. 62391. Such finding, in other words, was a blatant violation of the
principle of res judicata.
Principle of Res Judicata and its Applications
Res judicata30 is a legal principle that regards a final judgment on the merits of a case as conclusive between
the parties to such case and their privies.31 The principle, at least in our jurisdiction, has two (2) recognized
applications.
The first application pertains to a scenario where the parties to a case, whose merits had already been
finally adjudicated by a court with jurisdiction, (or their privies) become parties to a subsequent case that
involves the same claim, demand or cause of action as that of the previous case. In this scenario, the
principle of res judicata applies in such a way that the judgment in the previous case stands as an
absolute and complete bar to the subsequent case itself.32 This application of res judicata is also
known as the "bar by former judgment rule"33 and is sanctioned under Section 47(b) of Rule 39 of the Rules
of Court.34 chanrobleslaw
For convenience and ease of understanding, we dissect hereunder the circumstances that must concur in
order for the bar by former judgment rule to apply: 35
1. There is a judgment in a case that:
chanRoblesvirtualLawlibrary a. disposed of such case on the merits,
b. was issued by a court of competent jurisdiction,
c. has attained final and executory status;
2. There is another case subsequently filed in court;
3. Between the previous case and the subsequent case, there is an identity of parties; and cralawlawlibrary
4. The previous case and the subsequent case are based on the same claim, demand or cause of
action.
The second application of the principle of res judicata, on the other hand, contemplates of a scenario that is
almost similar to that of the first: the parties to a case, whose merits had already been finally adjudicated
by a court with jurisdiction, (or their privies) also become parties to a subsequent case. However, unlike in
the first application, the subsequent case herein does not involve the same claim, demand or cause of
action as the previous case. In this scenario, the principle of res judicata applies, not to wholly bar the
subsequent case, but only to preclude the relitigation or redermination therein of any matter
actually or deemed36settled by the judgment in the previous case.37 This application of res judicata is
known as the "conclusiveness of judgment rule" and is sanctioned under Section 47(c) of Rule 39 of the
Rules of Court.38 chanrobleslaw
The circumstances that must concur in order for the conclusiveness of judgment rule to apply arelthe same
as those needed for the bar by judgment rule to set in, except for the last circumstance. In the application
of the conclusiveness of judgmerit rule, the previous case and the subsequent case must notbe based on the
Isame claim, demand or cause of action but only pass upon the same matters or issues.
Guided by the foregoing precepts, we shall now address the issue at hand.
Conclusiveness of Judgment Rule Applies; Issue of the Validity of the; Levy On and Auction Sale
of Pequeña Island Precluded by the 16 January 2003 Resolution in CA-G.R. SP No. 62391
In this case, we find that the CA in CA-G.R. SP No. 119053 grossly erred when it made a finding concerning
the validity of the levy on the Pequeña Island that is diametrically opposed to what was already finally
settled in the earlier case- of CA-G.R. SP No. 62391. By ignoring and contradicting the final settlement in
CA-G.R. SP No. 62391, the CA evidently went beyond its jurisdiction and violated the principle of res
judicata, particularly the conclusiveness of judgment rule.
A review of the facts clearly reveal the existence of circumstances that should have warranted the
application of the conclusiveness of judgment rule in CA-G.R. SP No. 119053, insofar as the matter of
validity of the levy on the Pequeña Island is concerned: ChanRoblesVirtualawlibrary
1. The 16 January 2003 Resolution in CA-G.R. SP No. 62391 satisfies the first circumstance. Such
resolution, in effect, brought the merits of CA-G.R. SP No. 62391 to a close. 39 It essentially held that
there was a valid levy and auction on the Pequeña Island. The resolution, moreover, already
became final and executory on 10 February 2003.40 chanrobleslaw
2. CA-G.R. SP No. 119053 fits the second circumstance. It is a case filed subsequent to CA-G.R. SP
No. 62391. In fact, CA-G.R. SP No. 119053 was only filed on 18 April 2011—or more than eight
years after CA-G.R. SP No. 62391 was finally decided on the merits.
3. Both CA-G.R. SP No. 62391 and CA-G.R. SP No. 119053 featured Pamana and Gomeco as parties.
Though technically based on distinct causes of action,41 both CA-G.R. SP No. 62391 and CA-G.R. SP
No. 119053 nonetheless passed upon the issue of the validity of the levy on and auction sale of
Pequeña Island. Such facts satisfy the third circumstance.
Verily, the collusiveness of judgment rule ought to have applied. The 16 January 2003 Resolution in CA-G.R.
SP No. 62391 should have had a preclusive effect on the subsequent case, CA-G.R. SP No. 119053, as to all
matters settled in the said resolution—including the validity of the levy on the Pequeña Island.
The CA, therefore, cannot pass upon, and should not have passed upon, the issue pertaining to the validity
of the levy on the Pequeña Island. That issue was already settled in the final ruling of CA-G.R. SP No. 62391
and such settlement is conclusive upon both Pamana and Gomeco. It cannot be relitigated or be
redetermined, much less be overturned, in any subsequent case between them. Res judicata has already set
in.
By disregarding the final ruling in CA-G.R. SP No. 62391, the CA evidently went beyond its jurisdiction and
violated the principle of res judicata, particularly the collusiveness of judgment rule. Accordingly, the finding
that there was no valid levy on the Pequeña Island—the very fruit of such disregard—must be stricken
down.
The 17 September 2004 Resolution in CA-G.R. SP No. 62391 is Void Under the Doctrine of
Immutability of Judgment
In disregarding the 16 January 2003 Resolution in CA-G.R. SP No. 62391, the CA seems to have harbored
the belief that the foregoing resolution had somehow been supplanted by a later resolution in the same case
—the 17 September 2004 Resolution in CA-G.R. SP No. 62391.
To facilitate recollection of the 17 September 2004 Resolution in CA-G.R. SP No. 62391, as well as the
circumstances surrounding its issuance, we reproduce hereunder the following portion in our narration of
facts:
ChanRoblesVirtualawlibrary
Motion for Clarification in CA-G.R. SP No. 62391
After the finality of the 16 January 2003 Resolution, Pamana filed with the CA a Motion for Clarification in
CA-G.R. SP No. 62391. In the said motion, Pamana asked the CA to require disclosure of the list of
properties in the Pequeña Island that were levied upon and sold during the 10 January 2001 public auction,
and their corresponding values.
Pamana's Motion for Clarification rests on the following key assumptions: ChanRoblesVirtualawlibrary
1. The object of the Notice of Levy is not actually the Pequeña Island itself but only the "personal
properties" in the said island;
2. The 10 January 2001 public auction resulted in the sale not of the Pequeña Island but only of
certain properties therein;
3. The Notice of Levy, the Minutes of Auction Sale and the Sheriffs Return, however, did not specify
which personal properties in the Pequeña Island were actually .levied and sold during the 10
January 2001 public auction; and cralawlawlibrary
4. The Minutes of Auction Sale and the Sheriffs Return did not reveal for how much Pamana's
properties in the Pequeña Island had been sold during the 10 January 2001 public auction.
The CA, at first, denied Pamana's Motion for Clarification. However, on 17 September 2004, the CA issued
a Resolution directing Sheriff Montes to "point out which of[Pamana's] specific properties [in the Pequeña
Island] had been levied and sold in public auction and to determine the exact value of said properties if
sufficient to satisfy in full the judgment debt of [P]1,350,000.00 and other lawful expenses" and to "return
to [Pamana] such amount, if any, in excess of the judgment debt."
The 17 September 2004 Resolution in CA-G.R. SP No. 62391 was a virtual acceptance of Pamana's
assumptions in its Motion for Clarification.42 The resolution—with its distinct directive for the sheriff to "point
out which of [Pamana's] specific properties had been levied and sold in public auction"43—indubitably
proceeds from the same proposition that the object of the levy in the case was never the Pequeña Island
itself but only the properties therein.
Though it fashioned itself as affirmative of the 16 January 2003 Resolution in CA-G.R. SP No. 62391, 44the 17
September 2004 Resolution in actuality and in effect varied a very significant import of the former resolution
and of all other resolutions in CA-G.R. SP No. 62391—that the levy, whose validity was sustained under the
said case, had for its object no other property but the Pequeña Island itself. 45 chanrobleslaw
Thereupon lies the reason why the CA's apparent reliance on the 17 September 2004 Resolution in CA-G.R.
SP No. 62391 is mistaken. The said Resolution could never have validly altered, amended or modified the
import of the 16 January 2003 Resolution in CA-G.R. SP No. 62391 in light of the doctrine of immutability of
judgment.
The doctrine of immutability of judgment maintains that once a judgment has attained finality, the same can
no longer be changed or modified in any respect, either by the court that rendered it or by any other
court.46 In FGU Insurance v. Regional Trial Court,47 we explained the full breadth of such doctrine, including
the few recognized exceptions thereto, as follows: ChanRoblesVirtualawlibrary
Under the doctrine of finality of judgment or immutability of judgment, a decision that has acquired finality
becomes immutable and unalterable, and may no longer be modified in any respect, even if the modification
is meant to correct erroneous conclusions of fact and law, and whether it be made by the court that
rendered it or by the Highest Court of the land. Any act which violates this principle must immediately be
struck down.
But like any other rule, it has exceptions, namely: (1) the correction of clerical errors; (2) the so-called nunc
pro tune entries which cause no prejudice to any party; (3) void judgments; and (4) whenever
circumstances transpire after the finality of the decision rendering its execution unjust and inequitable.
In this case, the doctrine of immutability of judgment applies to preserve the final ruling in CA-G.R. SP No.
62391, as embodied under 16 January 2003 Resolution, from any alteration or modification. Such
resolution, as stated beforehand, had already become final and executory as of 10 February 2003. 48 As of
that date, the 16 January 2003 Resolution—and its holding that there was a valid levy on the Pequeña
Island itself—was vested the quality of immutability.
The 17 September 2004 Resolution, on the other hand, is neither a clerical correction nor a nunc pro
tuncorder. Neither does the said resolution aim to address any injustice or inequity that may result from the
implementation of the 16 January 2003 Resolution. With none of the exceptions to the application of the
doctrine of immutability of judgment existing in its favor, the 17 September 2004 Resolution in CA-G.R. SP
No. 62391—with its confused attempt to alter a final and executory ruling in the same case—must then be
stricken down as a nullity.
Having thus settled the folly of the first finding, we shall now proceed to an exposition of the second finding.
B. The Second Finding: Redemption Period of Pamana
To enable its Decision to stand in the event that the first finding fails, the CA made its second finding under
the context that the levy and auction on the Pequeña Island were valid.
Under such context, the CA found that the period of redemption in favor of Pamana was not yet fully
exhausted by the time a Sheriffs Final Deed of Sale was issued in favor of Gomeco. According to the CA, the
said period could not be" considered to have even begun in view of the registration of the Sheriffs Certificate
of Sale of the Pequeña Island at a "wrong" registry.
We do not agree.
Despite the error in the registration of the Sheriffs Certificate of Sale, we hold that Pamana ought to be held
bound, nonetheless, by such registration. As shall be discussed below, there are circumstances peculiar to
this case that warrants us to adopt such a holding. Hence, we find that the period of redemption of Pamana
would have been fully exhausted by the time a Sheriffs Final Deed of Sale was issued in favor of Gomeco.
Redemption in Execution Sales; Commencement of Redemption Period; Registration with the

Register of Deeds
When real property is levied and sold on execution pursuant to a final judgment, our rules of procedure
allows the judgment debtor49 or a "redemptioner"50 to redeem such property within one (1) year from the
"date of the registration of the certificate of sale" viz: ChanRoblesVirtualawlibrary
RULE 39
Section 28. Time and manner of, and amounts payable on, successive redemptions; notice to be given and
filed.—The judgment obligor, or redemptioner, may redeem the property from the purchaser, at any time
within one (1) year from the date of the registration of the certificate of sale, by paying the
purchaser the amount of his purchase, with the per centum per month interest thereon in addition, up to the
time of redemption, together with the amount of any assessments or taxes which the purchaser may have
paid thereon after purchase, and interest on such last named amount at the same rate; and if the purchaser
be also a creditor having a prior lien to that of the redemptioner, other than the judgment under which such
purchase was made, the amount of such other lien, with interest.
x x x. (Emphasis supplied)
The commencement of the one-year redemption period is of critical importance, not only to the judgment
debtor or a redemptioner, but even more so to the successful purchaser in the execution sale. This is
because, under the rules, it is only after the lapse of such one-year period with no valid
redemption having been effected, that a successful purchaser acquires absolute ownership over the real
property he purchased in the execution sale and becomes entitled to a final deed of sale. 51 chanrobleslaw
As can be gleaned above, commencement of the one-year redemption period is reckoned from "the date of
registration of the certificate of sale."52 The phrase "registration of certificate of sale" means registration of
such certificate with the RD.
The RD is the official public repository of records or instruments affecting lands. 53 As presently constituted
though, the RD maintains separate registries for real properties registered under the Torrens system and for
"unregistered" real properties i.e., real properties not registered under the Torrens system.54 Each registry
has its own set of day book and registration book.55 chanrobleslaw
Logically, and under normal circumstances, a certificate of sale ought to be registered with the RD at the
particular registry corresponding to the status of the real property it covers. Thus, a certificate of sale
covering property registered under the Torrens system ought to be registered with the RD under its registry
for properties registered under the Torrens system. Likewise, a certificate of sale covering
property not registered under the Torrens system ought to be registered with the RD under its registry for
unregistered real properties.
There is no doubt that, when a certificate of sale is so registered, the period of redemption would by then
start to run.
The question, however, is what would be the effect of a "wrong" registration (i.e., the registration of a
certificate of sale with the RD albeit under a registry that does not correspond to the status of the real
property it covers) upon the commencement of the period of redemption in execution sales?
Effect of Wrong Registration; The Two Situations
We must qualify our answer.
To answer the question before us, we must first familiarize ourselves with the process of levy prior to an
execution sale. Our familiarization with such process will, in turn, enable us to identify the two (2) general
situations that can ultimately lead to wrong registrations. It is between such situations that our qualification
lies.
It is basic that before any property is sold in execution, and a certificate of sale issued therefor, such
property must first be the subject of a levy.56 A levy on execution refers to the essential act by which a
property of the judgment debtor is taken into the custody of the law and set apart for the satisfaction of the
judgment debt.57 In our jurisdiction, a levy on execution" is effected by the sheriff of the court.
When the property sought to be levied is realty, the sheriff must first prepare a Notice of Levy that contains,
among others, an adequate description of the real property sought to be levied.58Significantly, the
notice of levy is also required to ascertain whether the particular realty sought to be levied is
registered under the Torrens system or not, such that if it is, the notice must contain "a
reference to the number of the certificate of title, the volume and page in the registration book
where the certificate is registered, and the registered owner or owners thereof."59 chanrobleslaw
To actually effect the levy upon a real property, however, the sheriff is required to do two (2) specific
things: (1) file with the RD a copy of the Notice of Levy, and (2) leave with the occupant of the property a
copy of the same notice.60 chanrobleslaw
Verily, since it is the duty of the sheriff preparing the Notice of Levy to ascertain whether the particular
realty sought to be levied is registered under Torrens system or not, then there can be two (2) possible
situations that can lead to a wrong registration:
First. The sheriff who prepared the Notice of Levy correctly ascertained the status of the real property
chanRoblesvirtualLawlibrary
(i.e., whether the same is registered under the Torrens system or not) but the ensuing certificate of sale
issued during the execution sale was still registered under the wrong registry of the RD.
Second. The sheriff who prepared the Notice of Levy incorrectly ascertained the status of the real property
leading to the registration of the certificate of sale under the wrong registry of the RD.
As just said, it is between such situations that our qualification lies.
Under the first situation, the effect of the wrong registration must be to prevent the commencement of the
redemption period altogether. In this case, the sheriff performs his duty correctly and the wrong registration
is actually the fault of the successful purchaser. Such type of wrong registration is deemed non-compliant
with the requirement of registration under Section 28 of Rule 39 of the Rules of Court.
A different treatment, however, is certainly warranted under the second situation. In this case, the sheriff
failed to perform his duties correctly and such failure directly contributed to the fact of wrong registration.
Under this situation, it is actually both unfair and inequitable to allow the judgment debtor to be benefited
and for the successful purchaser to be prejudiced.
The judgment debtor, for one, ought not to be benefited since it is in the position to correct the mistake of
the sheriff but it did not do so. Hence, in this situation, the judgment debtor could be considered to be in
bad faith and a contributor to the wrong registration.
On the other hand, the successful purchaser ought not to be prejudiced since it only relied on the
representations of the sheriff who, as a public officer, may be presumed to have performed his duties
regularly.61 chanrobleslaw
Thus, for the sake of fairness and equality, a wrong registration committed under the second situation
should be considered substantially compliant with the requirement of registration under Section 28 of Rule
39 of the Rules of Court and is, therefore, sufficient to commence the redemption period.
Application
In the case at bench, the wrong registration was committed under the second situation. Hence, the wrong
registration in this case is considered to be substantially compliant with the requirement of registration
under Section 28 of Rule 39 of the Rules of Court and sufficient to commence the redemption period.
The facts are clear that the Notice of Levy and the Notice of Sheriff's Sale prepared by Sheriff Montes
incorrectly depicted the Pequeña Island as unregistered property; both having only identified the said island
via Tax Declaration No. 007-0001 with Property Index No. 016-13-007-01-001. 62 On the other hand, it is
also crystal that Pamana—who admitted to owning the Pequeña Island and was furnished with the said
notices—knowingly allowed the incorrect depiction of the status of the island to prevail by doing nothing to
correct it. The incorrect depiction of Sheriff Montes, coupled by the bad faith of Pamana, were thus joint
contributors to the registration of the ensuing certificate sale covering the Pequeña Island under the wrong
registry in the RD. Verily, all points of the second situation are present in this case.
Since the wrong registration in this case was committed under the second situation, the same is considered
to be substantially compliant with the requirement of registration.under Section 28 of Rule 39 of the Rules of
Court and sufficient to commence the redemption period. These, in turn, produce the following specific
effects:
1. The redemption period of Pamana is deemed to have begun on 28 March 2001, i.e., the date when
the Sheriff's Certificate of Sale covering the Pequeña Island was registered with the RD under the
Registry of Unregistered Properties;
2. The redemption period of Pamana is slated to end exactly one year from 28 March 2001;
3. Since Pamana never exercised its right of redemption within one year from 28 March 2001, the
issuance of a Sheriff's Final Deed of Sale63 over the Pequeña Island in favor of Gomeco on 29
January 2003 is, therefore, valid.
All in all, Gomeco should now be considered the rightful absolute owner of the Pequeña Island. The Orders
dated 5 January 2005 and 3 March 2011 of the RTC in Civil Case No. 4349-V-94 were just correct in
recognizing such fact.
Having thus exposed the Decision in CA-G.R. SP No. 119053 as being supported by patently erroneous
findings, we feel compelled to exercise our certiorari jurisdiction. For law and justice to prevail, we must set
aside and nullify the Decision of the CA in CA-G.R. SP No. 119053.
II
The final point that we need to address is the procedural challenge posed against the instant Petition by
Pamana.
In its Comment,64 Pamana questioned the propriety of Gomeco's resort to a special civil action
for certiorari in assailing the Decision of the CA in CA-G.R. SP No. 119053. For Pamana, the filing of the
instant certiorari petition was not proper since another remedy—an appeal to this Court, in particular—was
available and could have been filed by Gomeco under the circumstances. Pamana postulated that the
availability of an appeal is fatal to the instant petition in light of the procedural norm that proscribes the use
of certiorari as substitute for a lost appeal.65
chanrobleslaw
We reject the procedural challenge.
The procedural norm referred to is not absolute. In Sanchez v. Court of Appeals,66 we enumerated the
instances when a Petition for Certiorari may be resorted to despite the existence of or prior availability of an
appeal—one of which is when the court a quo had "patently acted in excess of or outside its jurisdiction": ChanRoblesVirtualawlibrary
Doctrinally entrenched is the general rule that certiorari is not a substitute for a lost appeal. However,
Justice Florenz D. Regalado lists several exceptions to this rule, viz.: (1) where the appeal does not
constitute a speedy and adequate remedy (Salvadades vs. Pajarillo, et al., 78 Phil. 77), as where 33 appeals
were involved from orders issued in a single proceeding which will inevitably result in a proliferation of more
appeals (PCIB vs. Escolin, et al., L-27860 and 27896, Mar. 29, 1974); (2) where the orders were also issued
either in excess of or without jurisdiction (Aguilar vs. Tan, L-23600, Jun 30, 1970, Cf. Bautista, et al. vs.
Sarmiento, et al., L-45137, Sept. 231985); (3) for certain special consideration, as public welfare or public
policy (See Jose vs. Zulueta, et al. -16598, May 31, 1961 and the cases cited therein); (4) where in criminal
actions, the court rejects rebuttal evidence for the prosecution as, in case of acquittal, there could be no
remedy (People vs. Abalos, L029039, Nov. 28, 1968); (5) where the order is a patent nullity (Marcelo vs. De
Guzman, et al., L-29077, June 29, 1982); and (6) where the decision in the certiorari case will avoid future
litigations (St. Peter Memorial Park, Inc. vs. Campos, et al., L-38280, Mar. 21, 1975). Even in a case
where the remedy of appeal was lost, the Court has issued the writ of certiorari where the lower
court patently acted in excess of or outside its jurisdiction, as in the present case. (Emphasis
supplied)
We believe that our discussion in the preceding section had amply demonstrated that the CA, through its
grossly erroneous decision in CA-G.R SP No. 119053, had patently acted in excess of or outside its
jurisdiction. The erroneous findings of the CA were of such gross nature and so contemptuous of basic legal
doctrines that they indicate that the CA, in making them, had committed grave abuse of discretion, if not
acted wholly beyond its jurisdiction. Under such scenario, jurisprudence allows a Petition for Certiorari to be
resorted to by the aggrieved party.
Hence, we uphold the propriety of Gomeco's resort to the instant certiorari petition.
WHEREFORE, premises considered, the instant Petition is GRANTED. The Decision dated 28 December
2011 and Resolution dated 28 June 2012 of the Court of Appeals in CA-G.R. SP No. 119053 are
hereby ANNULLED and SET ASIDE. The Orders dated 5 January 2005 and 3 March 2011 of the Regional
Trial Court, Branch 75 of Valenzuela City in Civil Case No. 4349-V-94 are REINSTATED.
SO ORDERED. chanRoblesvirtualLawlibrary

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Republic of the Philippines

G.R. No. 203754 June 16, 2015

FILM DEVELOPMENT COUNCIL OF THE PHILIPPINES, Petitioner,

FILM DEVELOPMENT COUNCIL OF THE PHILIPPINES, Petitioner,

VELASCO, JR., J.:

The facts are simple and undisputed.

CHAPTER XI - Amusement Tax

Rulings of the Trial Courts

and 14 of RA 9167 unconstitutional, disposing as follows:

(1) Declaring Republic Act No. 9167 as invalid and unconstitutional;

Notify parties and counsels of this order.

The Court's Ruling

We find no reason to disturb the assailed rulings.

Local fiscal autonomy and the constitutionally-delegated power to tax

of LGUs as laid out in Section 130 of the LGC, to wit:

1. Taxation shall be uniform in each LGU.

2. Taxes, fees, charges and other impositions shall:

a. be equitable and based as far as practicable on the taxpayer's ability to pay;

b. be levied and collected only for public purposes;

c. not be unjust, excessive, oppressive, or confiscatory;

5. Each LGU shall, as far as practicable, evolve a progressive system of taxation.

CHAPTER XI - Amusement Tax

To augment the operational expenses of the Council, the Council may:

RA 9167, Sec. 14 states:

(b) Documentary stamp tax;

(i) Percentage or value-added tax (VAT) on sales, barters or exchanges or similar

(k) Taxes on premiums paid by way or reinsurance or retrocession;

Grant of amusement tax reward incentive:

not a tax exemption

Similarly, the LGC provides as follows:

Section 140. Amusement Tax. –

Declaration by the RTC, Branch 5 of the

(1) Declaring Republic Act No. 9167 as invalid and unconstitutional;

9167 as unconstitutional, is improper.

Amounts paid by Colon Heritage

(1) Declaring Republic Act No. 9167 as invalid and unconstitutional;

As regards the refund, the Court cannot subscribe to this position.

xxx xxx xxx

acts done on a presumption of their validity, the Court said:

xxx xxx xxx

In view of the declaration of nullity of unconstitutionality of Secs. 13 and 14 of RA 9167, all

As modified, the decisions of the lower courts shall read:

G.R. No. 197937 April 3, 2013

FILM DEVELOPMENT COUNCIL OF THE PHILIPPINES, Petitioner,

VILLARAMA, JR., J.:

The factual antecedents:

SECTION 140. Amusement Tax-

The petition has no merit.

Petitioner’s submissions fail to persuade.

G.R. No. 190814, October 09, 2013

VELASCO JR., J.:

The following events and proceedings then transpired: chanroblesvirtualawlibrary

Thus, it falls upon this Court to balance the conflict.

The Court’s Ruling

Was there forum shopping? Did petitioner forum shop?

The cases have identical parties

G.R. No. 173331 December 11, 2013

FLORPINA BENAVIDEZ, Petitioner,

Antipolo) in Civil Case No. 00-5660.

2. The amount of ₱50,000.00 as exemplary damages;

The CA was not moved.

The Court’s Ruling