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HILIPPINE ALUMINUM WHEELS INC. vs.

FASGI ENTERPRISES
FACTS
On 01 June 1978, FASGI Enterprises Incorporated ("FASGI"), a corporation
organized and existing under and by virtue of the laws of the State of
California, United States of America, entered into a distributorship
arrangement with Philippine Aluminum Wheels, Incorporated ("PAWI"), a
Philippine corporation, and Fratelli Pedrini Sarezzo S.P.A. ("FPS"), an
Italian corporation. The agreement provided for the purchase, importation
and distributorship in the United States of aluminum wheels manufactured
by PAWI. FASGI then paid PAWI the FOB value of the wheels.
Unfortunately, FASGI later found the shipment to be defective and in noncompliance with the contract.
On 21 September 1979, FASGI instituted an action against PAWI and FPS
for breach of contract and recovery of damages in the amount of
US$2,316,591.00 before the United States District Court for the Central
District of California. In the interim, two agreements were entered by the
parties but PAWI kept on failing to discharge its obligations therein. Irked
by PAWI's persistent default, FASGI filed with the US District Court of the
Central District of California the agreements for judgment against PAWI.
On 24 August 1982, FASGI filed a notice of entry of judgment. Unable to
obtain satisfaction of the final judgment within the United States, FASGI
filed a complaint for "enforcement of foreign judgment", before RTC
Makati. The Makati court, however, dismissed the case, on the ground that
the decree was tainted with collusion, fraud, and clear mistake of law and
fact. The lower court ruled that the foreign judgment ignored the
reciprocal obligations of the parties. While the assailed foreign judgment
ordered the return by PAWI of the purchase amount, no similar order was
made requiring FASGI to return to PAWI the third and fourth containers of
wheels. This situation, amounted to an unjust enrichment on the part of
FASGI. Furthermore, the RTC said, agreements which the California court
had based its judgment were a nullity for having been entered into by Mr.
Thomas Ready, counsel for PAWI, without the latter's authorization.
However, the Court of Appeals reversed this decision.

Benguet Consolidated Mining Company was organized in 1903 under


the Spanish Code of Commerce of 1886 as a sociedad anonima. It was
agreed by the incorporators that Benguet Mining was to exist for 50
years.
In 1906, Act 1459 (Corporation Law) was enacted which superseded
the Code of Commerce of 1886. Act 1459 essentially introduced the

ISSUE
Should the Philippine Court enforce the foreign judgment? YES
RULING
In this jurisdiction, a valid judgment rendered by a foreign tribunal may be
recognized insofar as the immediate parties and the underlying cause of
action are concerned so long as it is convincingly shown that there has
been an opportunity for a full and fair hearing before a court of competent
jurisdiction; that trial upon regular proceedings has been conducted,
following due citation or voluntary appearance of the defendant and under
a system of jurisprudence likely to secure an impartial administration of
justice; and that there is nothing to indicate either a prejudice in court and
in the system of laws under which it is sitting or fraud in procuring the
judgment. PAWI claims that its counsel, Mr. Ready, has acted without its
authority. Verily, in this jurisdiction, it is clear that an attorney cannot,
without a client's authorization, settle the action or subject matter of the
litigation even when he honestly believes that such a settlement will best
serve his client's interest. However, PAWI failed to substantiate this
complain with sufficient evidence. Hence, the foreign judgment must be
enforced.
Even if PAWI assailed that fraud tainted the agreements which the US
Court based its judgment, this cannot prevent the enforcement of said
judgment. PAWI claimed that there was collusion and fraud in the signing
of the agreements. Although the US Court already adjudicated on this
matter, PAWI insisted on raising it again in this Court. Fraud, to hinder the
enforcement within this jurisdiction of a foreign judgment, must be
extrinsic, i.e., fraud based on facts not controverted or resolved in the case
where judgment is rendered, or that which would go to the jurisdiction of
the court or would deprive the party against whom judgment is rendered a
chance to defend the action to which he has a meritorious case or defense.
In fine, intrinsic fraud, that is, fraud which goes to the very existence of
the cause of action - such as fraud in obtaining the consent to a contract is deemed already adjudged, and it, therefore, cannot militate against the
recognition or enforcement of the foreign judgment.

American concept of a corporation. The purpose of the law, among


others, is to eradicate the Spanish Code and make sociedades
anonimas obsolete.
In 1953, the board of directors of Benguet Mining submitted to the
Securities and Exchange Commission an application for them to be
allowed to extend the life span of Benguet Mining. Then
1

Commissioner Mariano Pineda denied the application as it ruled that


the extension requested is contrary to Section 18 of the Corporation
Law of 1906 which provides that the life of a corporation shall not be
extended by amendment beyond the time fixed in their original
articles.

law entitling him to insist that it shall remain unchanged for his
benefit. Had Benguet Mining agreed to extend its life prior to the
passage of the Corporation Code of 1906 such right would have
vested. But when the law was passed in 1906, Benguet Mining was
already deprived of such right.

Benguet Mining contends that they have a vested right under the Code
of Commerce of 1886 because they were organized under said law;
that under said law, Benguet Mining is allowed to extend its life by
simply amending its articles of incorporation; that the prohibition in
Section 18 of the Corporation Code of 1906 does not apply to
sociedades anonimas already existing prior to the Laws enactment;
that even assuming that the prohibition applies to Benguet Mining, it
should be allowed to be reorganized as a corporation under the said
Corporation Law.

To allow Benguet Mining to extend its life will be inimical to the


purpose of the law which sought to render obsolete sociedades
anonimas. If this is allowed, Benguet Mining will unfairly do
something which new corporations organized under the new
Corporation Law cant do that is, exist beyond 50 years. Plus, it
would have reaped the benefits of being a sociedad anonima and later
on of being a corporation. Further, under the Corporation Code of
1906, existing sociedades anonimas during the enactment of the law
must choose whether to continue as such or be organized as a
corporation under the new law. Once a sociedad anonima chooses one
of these, it is already proscribed from choosing the other. Evidently,
Benguet Mining chose to exist as a sociedad anonima hence it can no
longer elect to become a corporation when its life is near its end.

ISSUE: Whether or not Benguet Mining is correct.


HELD: No. Benguet Mining has no vested right to extend its life. It is
a well settled rule that no person has a vested interest in any rule of
FIRST DIVISION
[G.R. No. 122807. July 5, 1996]
ROGELIO P. MENDIOLA, petitioner, vs. COURT OF APPEALS and
PHILIPPINE NATIONAL BANK, respondents.

the export of prawns. As proposed by Ms. Nora, they were to secure


financing from private respondent Philippine National Bank. The
credit line, it was agreed on, was to be secured by collaterals
consisting of real estate properties of the petitioner, particularly two
(2) parcels of land, situated in Marikina, and covered by Transfer
Certificate of Title No. 27307 issued by the Registry of Deeds of
Marikina, Rizal.

RESOLUTION
HERMOSISIMA, JR., J.:
Sometime in December 1987, a certain Ms. Norma S. Nora convinced
petitioner Rogelio Mendiola to enter into a joint venture with her for

On January 27, 1988, the petitioner signed a Special Power of


Attorney authorizing Ms. Norma S. Nora to mortgage his
aforementioned properties to PNB in order to secure the obligations of
the joint venture with the said bank of up to Five (5) Million
(5,000,000.00) Pesos. The planned joint venture became a failure even
2

before it could take off the ground. But, in the meantime, Ms. Norma
S. Nora, on the strength of the special power of attorney issued in her
favor, obtained loans from PNB in the amount of P8,101,440.62 for
the account of petitioner and secured by the parcels of land
hereinabove described.
On November 11, 1988, petitioner rather belatedly revoked the special
power of attorney in favor of Ms. Nora and requested PNB to release
his properties from the mortgage executed by Ms. Nora in its favor.
The request notwithstanding, petitioner was notified under a Notice of
Sheriff Sale, dated April 20, 1989, that PNB had initiated foreclosure
proceedings against the properties of the petitioner.
On May 16, 1989, petitioner filed a case for injunction against the
PNB, docketed as Civil Case No. 58173, with Branch 162, of the
Regional Trial Court of Pasig City, seeking to enjoin the foreclosure of
the properties in question. PNB filed a motion to dismiss the case on
the ground that the complaint did not state a sufficient cause of action.
After hearing, the trial court, in its Order, dated August 17, 1989,
granted PNB's motion to dismiss in this wise:

On October 10, 1990, petitioner filed an action to annul the auction


sale of October 3, 1990, which was docketed as Civil Case No. 60012.
The case was raffled to Branch 154 of the Regional Trial Court of
Pasig City.
PNB likewise filed a motion to dismiss Civil Case No. 60012 alleging
that "another action is pending between the same parties for the same
cause of action." Apparently, PNB was referring to Civil Case No.
58173 then pending with respondent Court of Appeals. Attached to the
motion to dismiss was a copy of the complaint in Civil Case No.
58173 which had the same allegations as the complaint in Civil Case
No. 60012, except that the relief sought in the first case was to enjoin
the foreclosure of the mortgaged properties of the petitioner.
Petitioner opposed said motion to dismiss.
After due hearing, Branch 154, RTC of Pasig, issued an Order, dated
February 28, 1991, granting PNB's motion to dismiss Civil Case No.
60012 on the ground of litis pendentia. The dispositive portion of the
Order reads:

"Since the Court finds that the complaint does not state a sufficient
cause of action, it follows therefore that the prayer, for issuance of the
writ of preliminary injunction has no leg to stand on.

"WHEREFORE, the Motion to Dismiss is hereby GRANTED, the


injunction DENIED and the instant complaint DISMISSED with
prejudice, without costs."ii[2]

IN VIEW OF THE FOREGOING CONSIDERATIONS, the complaint


is hereby ordered dismissed, without pronouncement as to costs. The
temporary restraining order under the date of May 16, 1989 is hereby
lifted and set aside."i[1]

A motion for reconsideration was filed by the petitioner but the same
was denied. Petitioner appealed before the court a quo, which
rendered its Decision, dated November 15, 1995 in CA-GR. CV No.
37940, affirming the Orders issued by Branch 154 of the RTC-Pasig,
to wit:

Petitioner filed a Notice of Appeal from said Order, which was noted
by the lower court in an Order, dated November 16, 1989.
While Civil Case No. 58173 was pending appeal with the court a quo,
aforementioned properties were sold in an auction sale on October 3,
1990. The PNB, as the highest bidder, acquired petitioner's properties.

"WHEREFORE, the orders herein appealed from are hereby affirmed


in toto, with costs against the plaintiff-appellant."iii[3]
Hence, the instant petition submitting the following grounds.
I
3

THE HONORABLE COURT OF APPEALS ERRED IN


AFFIRMING IN TOTO THE ORDER DATED FEBRUARY 28, 1991
BASED ON THE ORDER DATED AUGUST 17, 1989
CONSIDERING THAT THE LATTER ORDER SIMPLY RESOLVED
THAT THE MORTGAGE IN FAVOR OF THE PHILIPPINE
NATIONAL BANK IS BINDING UPON PETITIONER, BUT HAS
NOT RESOLVED IN THE DECRETAL PORTION OF SUCH
LATTER ORDER WHETHER PHILIPPINE NATIONAL BANK
HAS THE RIGHT TO FORECLOSE SUCH MORTGAGE BASED
ON THE DEFAULTED OBLIGATIONS OF NORMA NORA, AND
IT HAS NOT LIKEWISE RESOLVED IN THE DECRETAL
PORTION THEREOF WHETHER SUCH DEFAULTED
OBLIGATIONS OF NORMA NORA ARE SECURED BY THE
MORTGAGE IN FAVOR OF PHILIPPINE NATIONAL BANK; AND
II
ASSUMING FOR THE SAKE OF ARGUMENT THAT RES
JUDICATA HAS SET IN, ITS APPLICATION WOULD INVOLVE
THE SACRIFICE OF JUSTICE TO TECHNICALITY.iv[4]
We deny the petition.
The instant petition has now become moot and academic, because the
first case, docketed as Civil Case No. 58173, which is an application
for injunction filed by herein petitioner before Branch 162 of the
Regional Trial Court, Pasig City against private respondent PNB to
prevent the latter from foreclosing his real properties, and which was
then pending appeal before the court a quo at the time the second
action (Civil Case No. 60012) was filed, has now been finally
dismissed by the respondent Court of Appeals in CA-G.R. CV No.
29601, to wit:
"WHEREFORE, the appeal is hereby declared abandoned and is
dismissed pursuant to Section 1(d), Rule 50 of the Rules of Court."v[5]

Consequently, the instant petition which prays for the declaration of


nullity of the auction sale by PNB of private respondent's
propertiesvi[6] becomes dismissible under the principle of res judicata.
Section 49, Rule 39 of the Revised Rules of Court provides in part:
"SEC. 49. Effect of judgments. - The effect of a judgment or final
order rendered by a court or judge of the Philippines, having
jurisdiction to pronounce the judgment or order, may be as follows:
x x xx x x

xxx

(b)
In other cases the judgment or order is, with respect to the
matter directly adjudged or as to any other matter that could have been
raised in relation thereto, conclusive between the parties and their
successors-in-interest by title subsequent to the commencement of the
action or special proceeding, litigating for the same thing and under
the same title and; in the same capacity;
(c)
In any other litigation between the same parties of their
successors-in-interest, that only is deemed to have been adjudged in a
former judgment which appears upon its face to have been so
adjudged, or which was actually and necessarily included therein or
necessary thereto.
Section 49 (b) enunciates the first concept of res judicata known as
"bar by prior judgment," whereas, Section 49 is referred to as
"conclusiveness of judgment."
There is "bar by former judgment" when, between the first case where
the judgment was rendered, and the second case where such judgment
is invoked, there is identity of parties, subject matter and cause of
action. When the three identities are present, the judgment on the
merits rendered in the first constitutes an absolute bar to subsequent
action. It is final as to the claim or demand in controversy, including
the parties and those in privity with them, not only as to every matter
which was offered and received to sustain or defeat the claim or
4

demand, but as to any other admissible matter which might have been
offered for that purpose. But where between the first case wherein
judgment is rendered and the second case wherein such judgment is
invoked, there is no identity of cause of action, the judgment is
conclusive in the second case, only as to those matters actually and
directly controverted and determined, and not as to matters merely
involved therein. This is what is termed conclusiveness of judgment.vii
[7]
It is res judicata in the first concept which finds relevant application in
the case at bar.
There are four (4) essential requisites which must concur in order for
res judicata as a "bar by former judgment" to attach, viz.:
"1. The former judgment must be final;
2. It must have been rendered by a court having jurisdiction over the
subject matter and the parties;
3. It must be a judgment or order on the merits; and
4. There must be between the first and second action identity of
parties, identity of subject matter, and identity of causes of
action."viii[8]
All the foregoing requisites obtain in the present case. The Order of
Branch 162, RTC - Pasig, dated August 17, 1989, denying petitioner
Mendiola's application for injunction of the foreclosure of his
properties in Civil Case No. 58173, had long become final and
executory in light of the Decision of the Court of Appeals in CA-G.R.
CV No. 29601 affirming the trial court's order. Petitioner did not
appeal the Decision of the court a quo in CA-G.R. CV No. 29601.
The parties do not dispute the fact that Branch 162, RTC, Pasig, had
obtained jurisdiction over the subject matter of the first case as well as
over the parties thereto.

The judgment of the trial court in Civil Case No. 58173, as affirmed
by the Court of Appeals, is a judgment on the merits. A judgment is on
the merits when it determines the rights and liabilities of the parties
based on the disclosed facts, irrespective of formal, technical or
dilatory objections. It is not necessary, however, that there should
have been a trial. If the judgment is general, and not based on any
technical defect or objection, and the parties had a full legal
opportunity to be heard on their respective claims and contentions, it is
on the merits although there was no actual hearing or arguments on the
facts of the case.ix[9] In the case at bar, not only was petitioner
provided an opportunity to be heard in support of his complaint for
injunction; petitioner was given an actual hearing to argue his
complaint on its merits.x[10] Evidently, the Order of the trial court
denying petitioner's application for injunction was rendered only after
due consideration of the facts and evidence presented by both parties
thereto. The said Order cannot be said to be one on sheer technicality,
it actually goes into the very substance of the relief sought therein by
petitioner, that is, for the issuance of a writ of injunction against the
private respondent, and must thus be regarded as an adjudication on
the merits.
Finally, the fourth element is likewise extant in this case. Required in
order to satisfy this element are: (1) identity of the parties and subject
matter; and (2) identity of the causes of action. In Civil Case No.
58173, the complaint was filed by herein petitioner Mendiola against
private respondent PNB, Norma S. Nora, Eliezer L. Castillo, Norman
C. Nora, Grace S. Belvis, and Victor S. Sta. Ana, as Deputy Sheriff-InCharge. In Civil Case No. 60012, the complaint was filed by
petitioner Mendiola against private respondent PNB and Nilda P.
Bongat in substitution of Grace S. Belvis. It is to be noted that there is
no absolute identity of parties on the two cases. This is of no
consequence. We have established jurisprudence to the effect that, in
order for res judicata to apply, absolute identity of parties is not
required because substantial identity is sufficient.xi[11] In any case,
PNB is a defendant in both cases. The subject matter involved in both
cases, the real properties of petitioner covered by TCT No. 27307, are
also identical.
5

The similarity between the two causes of action is only too glaring.
The test of identity of causes of action lies not in the form of an action
but on whether the same evidence would support and establish the
former and the present causes of action. The difference of actions in
the aforesaid cases is of no moment.xii[12] In Civil Case No. 58173,
the action is to enjoin PNB from foreclosing petitioner's properties,
while in Civil Case No. 60012, the action is one to annul the auction
sale over the foreclosed properties of petitioner based on the same
grounds. Notwithstanding a difference in the forms of the two actions,
the doctrine of res judicata still applies considering that the parties
were litigating for the same thing, i.e. lands covered by TCT No.
27307, and more importantly, the same contentions and evidence as
advanced by herein petitioner in this case were in fact used to support
the former cause of action.

Petitioner, now argues on equitable grounds. He maintains that,


assuming for the sake of argument that res judicata has set in, its
application would involve the sacrifice of justice for technicality.
We are not persuaded.
Equity, which has been aptly described "a justice outside legality," is
applied only in the absence of, and never against, statutory law or
judicial rules of procedure. The pertinent positive rules being present
here, they should pre-empt and prevail over all abstract arguments
based only on equity.xiii[13]
WHEREFORE, in view of the foregoing, the petition should be, as it
is, hereby DENIED.
SO ORDERED.

ii

iii

ivBrief Fact Summary. A Philippine Island mining companys production is halted due to occupation of the
islands by the Japanese. The President conducts business from his home in Ohio.
Synopsis of Rule of Law. Federal due process is not violated in either taking or declining jurisdiction of a
foreign corporation when the foreign corporations supervision of a business is carried on continuously and
systematically within a state.

Facts. The companys mining properties were in the Philippine Islands. During the occupation of the Islands by
the Japanese operations were halted and the president returned to his home in Ohio. He maintained an office
where he conducted his affairs and conducted business of the company and its employees (drew salary checks,
maintaining bank accounts, hosting Directors meetings, supervising policies to rehabilitate the properties in the
Philippines etc.).
Issue. At the constitutional level, the fairness to the corporation, and whether as a matter of federal due process,
the business done in Ohio by the respondent mining company was sufficiently substantial and of such a nature as
to permit Ohio to entertain a cause of action against a foreign corporation, where the cause of action arose from
activities entirely distinct from its activities in Ohio.
Held. Under these particular circumstances it would not violate federal due process for Ohio to either take or
decline jurisdiction of the corporation. Vacated and remanded.

Dissent. Justice Minton and The Chief Justice dissented on the grounds that the U.S. Supreme Court was
essentially issuing an advisory opinion to the Ohio Supreme Court.

Concurrence

Discussion. Although no mining properties were located in Ohio, the operations and supervision of the company
and wartime activities being directed by the president in the State of Ohio are enough not to violate federal due
process.

vi

vii

viii

ix

xi

xiiRepublic of the Philippines


SUPREME COURT
ManilaFIRST DIVISION

G.R. No. 108089 January 10, 1994


ALLIED BANKING CORPORATION, petitioner,
vs.
HON. COURT OF APPEALS AND FILOTEO ALANO, respondents.

Ocampo, Quiroz, Mina & Associatesn for petitioner.


Pelaez, Gregorio, Sipin, Bala & Robles for private respondent.

DAVIDE, JR., J.:


This is a petition for review on certiorari to set aside the decision of the Court of Appeals in CA-G.R. CV No.
33307. The said decision affirmed in toto the order of the trial court dismissing the petitioner's complaint on the
ground of res judicata.
The factual and procedural antecedents are in the main undisputed.
The private respondent is one of several parties named as co-defendants of Dearfield, Incorporated (Dearfield) in
a complaint 1 filed by the petitioner with the Regional Trial Court (RTC) of Makati on 25 May 1987, which was
docketed as Civil Case No. 16837 (hereinafter the First Case) and raffled off to Branch 149 of the said court.
The complaint is based on promissory notes, letters of credit, and trust receipts executed by the principal obligor,
Dearfield. On 16 November 1987, the private respondent filed a motion to dismiss the complaint on the ground
that it falls to state a cause of action as against him. 2 He specifically averred that a reading of the first to the
seventh causes of action will reveal that he is never mentioned therein as having a contractual relation with the
plaintiff; that the allegations therein "don't even cite or mention any participation of defendant ALANO in these
transactions"; that on the basis of the allegations of the complaint, the court cannot render a valid judgment
against him; and that the complaint served on him did not contain Annexes "S", "T", and "U", the alleged copies
of the "Continuing Guaranty/Comprehensive Surety" documents, thereby violating Section 7, Rule 8 of the
Rules of Court and rendering the complaint against him defective. The petitioner opposed the motion to dismiss.
3

In the Order of 20 June 1988, the trial court granted the motion after finding that "on the basis of the allegations
of the complaint, there is really no cause of action against defendant Alano." 4 Its motion for reconsideration
having been denied for lack of merit in the Order of 15 September 1988, 5 the petitioner filed a notice of appeal
on 30 September 1988. 6 Subsequently, on 14 December 1988, it filed an appeal by certiorari 7 with this Court,
which was docketed as G.R. No. 86009. It prayed therein that the orders of the trial court be reversed. In the
Resolution of this Court of 17 April 1989, 8 the petition was dismissed for having been filed late and for lack of
merit.
On 31 October 1990, the petitioner filed with the RTC of Manila a new complaint 9 against the private
respondent and Feliciana Camara, a surety who was also a defendant in the first complaint. The case (hereinafter
the Second Case) was docketed as Civil Case No. 90-54998 and raffled off to Branch 46 of the said court. The
complaint practically restates the causes of action in and involves the promissory notes, letters of credit, and trust
receipts covered in the First Case. The private respondent filed a motion to dismiss the Second Case on the
grounds that (a) the issue raised therein against him had already been settled with finality in the First Case, i.e.,
the case is barred by res judicata , and
(b) the complaint fails to state a cause of action against him. 10

In its Order of 1 March 1991, the trial court sustained the motion and ordered the dismissal of the case as against
the private respondent. 11 The petitioner appealed the order to the Court of Appeals which docketed the case as
CA-G.R. CV No. 33307. The Court of Appeals found no reversible error in the challenged order and affirmed it
in toto in its Decision of 25 November 1992. 12
The petitioner thus filed the instant petition for review on certiorari on
21 January 1993. We gave it due course in our Resolution of 23 August 1993 after the filing of the Comment on
the petition and the Reply to the Comment.
The petitioner contends that the public respondent erred in holding that the judgment in the First case bars the
filing of the Second case. It submits that the judgment dismissing the First case for failure to state a cause of
action is not a judgment on the merits and that there is no identity of causes of action between the First case and
the Second Case. It argues that the main reason why the First case was dismissed on the ground of failure to state
a cause of action was because the copies of the "Continuing Guaranty/Comprehensive Surety" agreements were
not attached to the First case. The second complaint, on the other hand, is an entirely different complaint for
attached to it are the pertinent documents absent in the first complaint. It further avers that by filing a motion to
dismiss, the private respondent hypothetically admitted the allegations thereof and that with these admissions, it
is clear that there exists a cause of action against the private respondent. Since there is no identity of causes of
action between the two complaints, res judicata cannot apply.
In his Comment, the private respondent argues that all the elements of
res judicata are present in this case and that res judicata operates to bar not only the relitigation in the
subsequent action of the issued squarely raised, passed upon, and adjudicated in the first suit, but also the
ventilation in a subsequent suit of any other issue which could have been raised in the first but was not. 13
In its Reply to the Comment, the petitioner insists that there is a significant difference between the First Case and
the Second Case in that the former fails to state a cause of action while the latter does so.
The primary issue in this case is whether the Court of Appeals committed a reversible error in affirming the
ruling of the trial court dismissing the Second Case on the ground of res judicata.
A careful deliberation on the arguments of the parties discloses no such error. The instant petition must therefore
be denied for want of merit.
Well-entrenched is the rule that even at the risk of occasional errors, judgments of courts should become final at
some definite time fixed by law and that parties should not be permitted to litigate the same issues over again.
This is the raison d'etre upon which the doctrine of res judicata rests. 14 Res judicata means "a matter adjudged;
a thing judicially acted upon or decided; a thing or matter settled by judgment." 15 This doctrine is an old axiom
of law, dictated by wisdom and sanctified by age, and founded on the broad principle that it is to the interest of
the public that there should be an end to litigation by the same parties over a subject once fully and fairly
adjudicated. It has appropriately said that it is a rule pervading every well-regulated system of jurisprudence, and
is put upon two grounds embodied in various maxims of the common law; the one, public policy and necessity,
which makes it to the interest of the state that there should be an end to litigation republicae ut sin finis litium;
the other, the hardship on the individual that he should be vexed twice for the same cause nemo debet bis
veraxi et eadem causa. A contrary doctrine would subject the public peace and quiet to the will and neglect of
individuals and prefer the gratification of the litigious disposition on the part of suitors to the preservation of the

public tranquility and happiness. 16


The essential requisites of res judicata are: (1) the former judgment must be final; (2) it must have been rendered
by a court having jurisdiction over the subject matter and the parties; (3) it must be a judgment or order on the
merits; and (4) there must be between the first and second action identity of parties, identity of subject matter,
and identity of causes of action. 17
The parties do not dispute the fact that Branch 149 of the RTC of Makati had jurisdiction over the First case. Its
Order of 20 June 1988 dismissing the said case on the ground that "there is really no cause of action against
defendant Alano" had long become final and executory and no less than this Court had affirmed its finality when
it dismissed on 17 April 1989, on the grounds of late filing and lack of merit, the petitioner's action (G.R. No.
86009) to set aside the trial court's order. It is likewise undisputed that there is an identity of parties (insofar as
the petitioner and the private respondent are concerned) and an identity of subject matter between the First and
Second Case. The petitioner however submits that there is no identity of causes of action between the two cases
since there was no cause of action against private respondent in the First case as held by the trial court, while
there is now a cause of action in the Second Case. He also argues that there was no judgment on the merits in the
First Case.
The argument that there is no identity of causes of action is meretricious. It betrays the petitioner's
misunderstanding of what a cause of action is as component of res judicata. That identity relates to the accuses
of action in the prior or latter cases. No elaboration is needed to show that the causes of action both in the First
Case the and Second Case are the same enforcement of the rights of the petitioner under the promissory
notes, letters of credit, and trust receipts. Although the trial court declared that "on the basis of the allegations of
the complaint, there is really no cause of action against defendant Alano," it does not follow that the complaint
states no cause of action at all. It must be stressed in this connection that, contrary to the petitioner's contention,
the trial court did not primarily base its conclusion of lack of cause of action on the failure of the petitioner to
attach to the complaint copies of the alleged "Continuing Guaranty/Comprehensive Surety" agreements. Its main
bases are the allegations in the complaint. Our own perusal of the complaint clearly sustains the conclusion of
the trial court. Indeed, the complaint neither mentions the name of the private respondent in any of the causes of
action nor suggests what his liability is. In short, the petitioner itself had shown beyond cavil, through its
allegations in the complaint, that with respect to the promissory note, letters of credit, and trust receipts subject
of the complaint, the private respondent had incurred in liability whatsoever.
Nor is there any doubt that the dismissal of the First Case was a dismissal on the merits. That the dismissal of the
First case was not by virtue of a decision but of an order pursuant to a motion to dismiss does not make the
dismissal any less an adjudication on the merits. In Escarte vs. Office of the President, 18 we held:
While We agree with Medina that in Civil Case No. 83215, there was no trial on the merits
because the case was decided on a motion to dismiss, there was no formal presentation or
reception of evidence and an order, not a decision, was issued by the trial court, still, the ruling
was a judgment on the merits. As a technical legal term, "merits" has been defined in law
dictionaries as a matter of substance in law, as distinguished from matter of form, and as the real
or substantial grounds of action or defense, in contradistinction to some technical or collateral
matter raised in the course of the suit. A judgment is upon the merits when it amounts to a
declaration of the law to the respective rights and duties of the parties, based upon the ultimate
fact or state of facts disclosed by the pleadings and evidence, and upon which the right of

recovery depends, irrespective of formal, technical or dilatory objectives or contentions.


In dismissing the First Case for lack of cause of action, the RTC of Makati ruled:
Considering defendant Alano's Motion to Dismiss complaint and plaintiff's Opposition thereto,
as well as the Reply to Opposition filed by defendant Alano, this Court finds that on the basis of
the allegations of the complaint, there is really no cause of action against defendant Alano, and
the complaint must be dismissed for lack of cause of action against him.
In view of the foregoing, the Motion to Dismiss filed by defendant Alano is hereby granted. Let
complaint against defendant-movant Filoteo Alano be dismissed. 19
It unequivocally determined the rights and obligations of the petitioner and the private respondent with respect to
the causes of action and the subject matter of the case. The order definitely put an end to the controversy
between them.
All the essential requisites of res judicata are thus present and the dismissal of the Second Case on that ground
was not tainted by any error or abuse of discretion. The petitioner cannot evade its application by varying the
form of his action or adopting a different method of presenting his case, 20 or by simply adding or dropping
parties in the subsequent case. 21 That in the Second Case the petitioner had attached the "Continuing
Guaranty/Comprehensive Surety" agreements allegedly signed by the private respondent does not help the cause
of the petitioner. Those documents were already touched upon in the pleadings relative to the motion to dismiss
the First Case. Moreover, if we follow the arguments of the petitioner, said documents are inextricably linked to
the promissory notes, letters of credit, and trust receipts which are, in fact, the subject of the two cases. It is
settled that as between the same parties, on the same subject matter and causes of action, a final valid judgment
is conclusive not only on the issues actually determined by the decision, but on all issues that could have been
raised or litigated in the anterior suit. 22
WHEREFORE, the petition is hereby DENIED for lack of merit.
SO ORDERED.
Cruz, Bellosillo and Quiason, JJ., concur.

xiii

G.R. No. L-25051

September 30, 1968

JOSE B. ROXAS and VENANCIA B. ROXAS, Plaintiffs-Appellees, v. PEDRO BERMUDEZ, DOMINGA


MARTIN and MR. & MRS. LORETA BERMUDEZ, Defendants-Appellants.
Valencia & Francisco for plaintiffs-appellees.
Victoriano C. Tolentino for defendants-appellants.
ANGELES, J.:chanrobles virtual law library
On appeal on purely questions of law from a decision of the trial court declaring, inter alia, that the
decision rendered in a prior civil case No. 34498 between the same parties is res judicata to the present case, and
in denying the admission of the third-party complaint filed by one of the
defendants.chanroblesvirtualawlibrarychanrobles virtual law library
The facts pertinent to the instant appeal, are as follows:chanrobles virtual law library
On December 4, 1957, Pedro Bermudez and his sister, Loreta Bermudez, filed a complaint in the Court of
First Instance of Manila, docketed as Civil Case No. 34498, against the spouses Joaquin Andrade and Estela
Martinez Andrade, the spouses Jose B. Roxas and Venancia Roxas, and Atty. Mariano Z. Sunga. As amended on
July 14, 1958, the complaint alleged: that plaintiffs are the children of Apolonio Bermudez who died on March
6, 1943, leaving a parcel of land (described as Lot 13, Block 16-A on subdivision plan Psd-3231) covered by
Transfer Certificate of Title. No. 36734, issued under his name, "Apolonio Bermudez, widower", by the Register
of Deeds of Manila; that on May 23, 1950, defendant Estela Martinez Andrade - by means of fraud, deceit and
misrepresentation, and talking advantage of the ignorance of their mother Dominga Martin - secured the
signature of the latter on an Affidavit of Adjudication of the land prepared by said defendant with the aid of a
lawyer, by virtue of which the land was later registered in the name alone of said Dominga Martin; that on
November 11, 1951, defendants Andrade spouses, employing the same deceit and misrepresentation on Dominga
Martin, obtained the signature of the latter once again on a deed of absolute sale, wherein Dominga Martin
purportedly sold the land to Joaquin Andrade; that on 30 January, 1954, Joaquin Andrade then sold the land to
the spouses Jose B. Roxas and Venancia Roxas; and that by reason of such fraudulent acts of the Andrades,
plaintiffs were deprived of their rights to the property resulting in damage and prejudice to them in the sum of
P6,000.00, the equivalent value of the land. For relief, plaintiffs prayed that the defendants be sentenced to pay
damages in the said amount of P6,000.00, plus P2,000.00 by way of attorney's

fees.chanroblesvirtualawlibrarychanrobles virtual law library


With prior leave of court, Dominga Martin filed on January 5, 1959, a complaint in intervention which
was amended on July 8, 1959, wherein she made a common cause with the plaintiffs and reproduced the
allegations of plaintiffs' complaint against the defendants. For her own relief, she prayed that defendants be
sentenced to pay her P5,000.00 as actual damages, P3,000.00 as moral damages, P2,000.00 as exemplary
damages, and P2,000.00 as attorney's fees.chanroblesvirtualawlibrarychanrobles virtual law library
Defendants Andrade spouses filed their answer traversing the allegations in the complaint. As special
defenses, they alleged that the deed of sale executed by plaintiff-in-intervention, Dominga Martin in favor of
Joaquin Andrade, was "with the former's full knowledge and realization of the contents thereof;" and that said
vendor received valuable consideration therefore from the buyer. And by way of counterclaim, said answering
defendants prayed for the sum of P3,000.00 as damages for the malicious prosecution of the
action.chanroblesvirtualawlibrarychanrobles virtual law library
Defendants Roxas spouses also answered, alleging as a special defense, that they have acquired the land in
question in good faith and for a valuable consideration; and that their title thereto is evidenced by Transfer
Certificate of Title No. 35655 issued in their names by the Register of Deeds of Manila on February 13, 1954.
They prayed for damages against the plaintiffs by way of counterclaim.chanroblesvirtualawlibrarychanrobles
virtual law library
Likewise, defendant attorney, Mariano Z. Sunga, filed his answer denying the material allegations of the
complaint, with counterclaim for damages.chanroblesvirtualawlibrarychanrobles virtual law library
After a protracted trial on the merits of the case, decision was rendered on June 1, 1962, dismissing the
amended complaint and the complaint in intervention, as well as the counterclaims of all the defendants. The
motion for reconsideration of the decision filed by the plaintiffs and the intervenor having been denied, said
parties interposed appeal from the said decision to the Court of Appeals. The appeal was dismissed, however,
upon their failure to pay the docket fees and the estimated cost for the printing of the record on appeal.
Consequently, the corresponding entry of final judgment was made on February 19,
1963.chanroblesvirtualawlibrarychanrobles virtual law library
Not long thereafter, spouses Jose B. Roxas and Venancia Roxas filed a complaint, docketed as Civil Case
No. 53732, in the same Court of First Instance of Manila, to recover possession of the very land involved in the
former litigation, from Pedro Bermudez, Loreta Bermudez, and Domingo Martin - plaintiffs and intervenor in
the former case No. 34498 - alleging that they (spouses Jose B. Roxas and Venancia Roxas) are the owners of the
land in question which is occupied by Pedro Bermudez, Loreta Bermudez and Dominga Martin; and that
notwithstanding demands on said defendants to vacate the said property, they have refused and failed to do so.
Plaintiffs therefore prayed that defendants be ordered to vacate the land and to pay the plaintiffs the sum of
P10.00 a month as rent for the use and occupation of the land from February 1, 1954, plus damages and
attorney's fees.chanroblesvirtualawlibrarychanrobles virtual law library
The defendants answered the complaint, with counterclaim. They also sought prior leave of the court to
file a third party complaint against Estela Martinez Andrade, Joaquin Andrade and Atty. Mariano Z. Sunga former defendants in Civil Case No. 34498. Plaintiffs spouses Jose B. Roxas and Venancia Roxas - defendants
also in the former case - opposed the admission of the third party complaint against their former co-defendants;

and the said third party complaint was then disallowed by the trial court.chanroblesvirtualawlibrarychanrobles
virtual law library
In their answer, defendants Bermudez and Dominga Martin traversed the allegations in the complaint,
alleging by way of special defenses, the same allegations in their complaint in the former case, viz: that Estela
Martinez Andrade, Joaquin Andrade and Atty. Mariano Z. Sunga, by means of deceit, fraud, misrepresentation,
and falsification, and by taking undue advantage of the ignorance and age of the defendants and the pledge then
prevailing over the land in question between Dominga Martin and Estela Martinez Andrade, were able to secure
the signature of said Dominga Martin on an Affidavit of Adjudication in her favor, then on an absolute deed of
sale of the land in favor of Joaquin Andrade, thereby obtaining torrens title in the name of the latter; that said
transaction was without consideration; that the plaintiffs "knew very well the aforesaid fraud, deceit,
misrepresentation and falsification, together with the fact that the sale of the land by Joaquin Andrade to
Venancia Roxas was simulated, as shown, among other things, by the inadequacy of the price in the supposed
sale." And they now pray, by way of counterclaim, that the sale executed by Dominga Martin in favor of Joaquin
Andrade, and the subsequent sale executed by the latter in favor of Venancia Roxas, be declared null and void;
and that plaintiffs together with their co-defendants in the former case (No. 34498) be sentenced to pay moral
and exemplary damages.chanroblesvirtualawlibrarychanrobles virtual law library
After trial, decision was rendered by the court below, holding that plaintiffs are the absolute owners of the
land in question, their title thereto being evidenced by Transfer Certificate of Title No. 35655, issued by the
Register of Deeds of Manila on February 14, 1954; that the allegation of the defendants that they cannot be
ejected from the land involved because they are the owners thereof, is absolutely without merit, for, being parties
in said Civil Case No. 34498, they are necessarily bound by the decision rendered by this Court, which decision
is already final and constitutes res judicata. Accordingly, the court ordered the defendants and all other persons
living with them "to vacate the land therein described, and to pay, jointly and severally, to the plaintiffs the
reasonable rental thereof at the rate of P10.00 a month from September 26, 1957, until they vacate the premises,
and the further sum of P200.00 as attorney's fees."chanrobles virtual law library
Defendants have appealed from the decision to the Court of Appeals which, in a resolution dated July 15,
1965, elevated the case to this Court, it appearing from the briefs of the parties that only questions of law are
raised therein.chanroblesvirtualawlibrarychanrobles virtual law library
Two main questions of law are posed by the appellants, to wit: (1) Whether or not the trial court erred in
declaring that the decision in Civil Case No. 34498 constitutes res judicata to the present case; and (2) Whether
or not the trial court erred in denying admission of the third party
complaint.chanroblesvirtualawlibrarychanrobles virtual law library
In relation to the first proposition, there can be no debate that the court which had tried and decided the
case No. 34498, had jurisdiction over the parties and the subject matter, the decision rendered therein was on the
merits, and the same has become final. Neither can it be disputed that the res in said case No. 34498 is the same
parcel of land involved in the case at bar.chanroblesvirtualawlibrarychanrobles virtual law library
It is the contention of the appellants, however, that the cause of action in said case No. 34498, which was
for recovery of damages, representing the equivalent value of the land which Bermudez and Martin claimed to
have been deprived through deceit, fraud and misrepresentation, is not the same or identical cause of action
involved in the present case, which is for the recovery of possession of the same

land.chanroblesvirtualawlibrarychanrobles virtual law library


Although, primarily, the cause of action in said case No. 34498, was for recovery of damages, representing
the equivalent value of the land which the plaintiffs therein, now appellants herein, have lost through the alleged
fraud, deceit and misrepresentation practiced on Dominga Martin by the Andrades, nevertheless, it is a fact that
the issue of ownership of the land which was claimed by the defendants Roxas spouses was intricately involved
in the case, such that the claim for damages could not be awarded without proof that the party claiming them had
a right to the land. Proof of ownership of or right to the land is as essential and necessary as that needed to
recover damages. In the inter-relation of issues, the resulting damages was the effect, and the loss of the land
through deceit and fraud was the cause.chanroblesvirtualawlibrarychanrobles virtual law library
In civil case No. 34498, the defendants, the Roxas spouses, have pleaded in their answer and special
defense that they have purchased the land in good faith and for value; that they are the owners thereof; and that
their title thereto is evidenced by a torrens transfer certificate of title No. 35655 of the City of Manila. The
defendants Andrade spouses also traversed the claim of ownership of Bermudez and Martin, and contended that
the sale of the land by Dominga Martin to them was valid. On the other hand, the issue posed by the plaintiffs in
said case No. 34498, was that the deed of sale executed by Dominga Martin to Joaquin Andrade, and that by the
latter in favor of Venancia Roxas were secured through fraud and deceit. Upon such adverse claim on the land by
the opposing parties, the court was called up to determine who was the owner thereof. The court, however, found
that the evidence sustained the claim of the spouses Roxas, and, accordingly, dismissed the amended complaint
and the complaint-in-intervention. The dispositive portion of the decision could not have any other meaning and
effect than to justify the conclusion that said dispositive portion of the decision reflected the merits of the case.
The trial court said:
From the evidence of the record, the claim of the intervenor, Dominga Martin,that she was made to sign
the affidavit of adjudication by defendant Estela Martinez Andrade by means of fraud, deceit and
misrepresentation and taking advantage of her ignorance in connivance with defendant Joaquin Andrade and
Atty. Mariano Z. Sunga, before whom said affidavit was ratified, is absolutely unfounded. From the testimony of
Atty. Mariano Z. Sunga, it has clearly been shown that on May 22, 1959, Dominga Martin, accompanied by
Joaquin Andrade and Mrs. Estela Martinez Andrade, came to see him and inquired if she could sell the property
described in Transfer Certificate of Title No. 36734 of the Office of the Register of Deeds of Manila which was
in the name of Apolonio Bermudez, widower: Atty. Sunga told her that she could not sell the property as she was
not its registered owner; however, she asked if it would be possible to have the property transferred to her name
as she was a sister of Apolonio Bermudez on the mother side and she wanted to sell the property to the
Andrades; Atty. Sunga suggested that it was necessary to secure an affidavit to that effect, and she left the
Torrens Title in his possession and promised that she would come back the following day; Atty. Sunga,
accordingly, prepared the affidavit of adjudication and when Dominga Martin came the following day,
accompanied again by the Andrades, and after having explained to her the contents of the affidavit in Tagalog,
she readily signed it; Atty. Sunga then filed the affidavit of adjudication with the Office of the Register of Deeds
of Manila for the issuance of a new title in the name of Dominga Martin; Atty. Sunga was able to get a new
transfer certificate of title in the name of Dominga Martin which he delivered to her. One year afterwards,
Dominga Martin came again and told Atty. Sunga that she would like to sell the lot to the Andrades, but Atty.
Sunga said that the property being a Barrio Obrero lot, it was necessary for her to secure the permission of the
Mayor of Manila. Atty. Sunga prepared the necessary request which Dominga Martin signed, and it was filed
with the Mayor's Office. The request was approved by the City Mayor and Atty. Sunga prepared the
corresponding deed of sale in favor of Joaquin R. Andrade. Upon the signing of the deed of sale, Atty. Sunga

brought the document to the Office of the Mayor and it was approved. The deed of sale was duly registered and a
new title was issued in the name of Joaquin R. Andrade. According to Atty. Sunga, Dominga Martin never
mentioned to him the fact that she was the widow of the deceased, Apolonio Bermudez, and that she had
children with him.chanroblesvirtualawlibrarychanrobles virtual law library
The evidence further shows that after Dominga Martin had secured the transfer certificate of title of the
said parcel of land in her name, on June 11, 1950, she received from Estela de Andrade, mother of Joaquin R.
Andrade, the sum of P500.00 as initial payment of the purchase price of said lot. On December 18, 1950, she
again received from Estela de Andrade an additional sum of P200.00 as part payment of the consideration for the
sale of said lot. On July 24, 1951, Dominga Martin again received from Estela de Andrade still another sum of
P1,000.00 as additional consideration for the sale. On July 30, 1951, she sent a letter to the City Mayor of
Manila, seeking permission to transfer said property in favor of Joaquin R. Andrade, should the latter be duly
qualified to acquire a lot in the said subdivision. On November 7, 1951, Dominga Martin received a further sum
of P800.00 from Estela de Andrade, thereby making a total of P2,500.00 as the full consideration for the sale of
the lot. She then executed in favor of Joaquin R. Andrade a deed of absolute sale of said lot on November 16,
1951. The deed of absolute sale was duly approved by the then Mayor of Manila, Manuel de la Fuente, and
attested by then Secretary to the Mayor, Carmelo S. Mendoza, and was prepared by and acknowledged before
the Notary Public, Atty. Mariano Z. Sunga. After the sale, the real estate taxes for the parcel of land in question
were paid by the Andrades from the years 1952 and 1953. On January 30, 1954, defendant Joaquin Andrade sold
the same parcel of land to the defendant spouses, Jose B. Roxas and Venancia Roxas, which sale was approved
by the then Mayor of the City of Manila, Arsenio H. Lacson, attested by the then Secretary to the Mayor, Jesus
Marcos Roces. The sale was duly registered and a new Transfer Certificate of Title No. 35655 was issued in the
name of the Roxas spouses. Thereafter, the real estate taxes on said lot from the year 1955 have been paid by the
Roxas spouses.chanroblesvirtualawlibrarychanrobles virtual law library
From the evidence then, the Court is convinced that if there was any fraud committed here, the same was
perpetrated by the intervenor, Dominga Martin, for she made it appear that she was the sister on the mother side
of the deceased, Apolonio Bermudez, in order that the lot in question could be adjudicated in her favor. She
concealed the fact that she was the widow of the said Apolonio Bermudez and with children with him, who are
the plaintiffs in this case. Undoubtedly, had she revealed such facts, it would not have been easy for her to
dispose of the lot as she intended. Her claim that she only wanted to mortgage the lot instead of selling it rests
merely on her uncorroborated testimony and inasmuch as the transactions here are all embodied in public
documents, the same have in their favor the presumption of regularity as to their due execution and authenticity,
and to overcome such presumption, the evidence must not be merely preponderant but must be clear, strong,
convincing and conclusive. Moreover, Atty. Mariano Z. Sunga, the notary public before whom Dominga Martin
acknowledged the affidavit of adjudication and the deed of absolute sale in favor of Joaquin R. Andrade, assured
the Court that Dominga Martin fully understood the nature of the agreements she was entering into, and his
testimony is highly credible coming as it is from a notary public who is at the same time a lawyer, who is
supposed to act in accordance with the oath of his office. Indeed, such testimony must be given more credence
than that of a party denying a contract acknowledged before the same notary public.
Upon the foregoing considerations, and it clearly appearing that the connection between the two cases is
so intimate and the parties and the subject matter of the controversy being the same in the former as well as in
the present, We cannot but conclude that the issue raised herein has really been determined by a competent court
in a prior case.chanroblesvirtualawlibrarychanrobles virtual law library

Even taking the view that the issue of ownership of the land in said case No. 34498, was only a secondary
question in the proceedings before said court, nevertheless, it cannot detract from the conclusive effect of the
adjudication of the case, it being an issue therein, whether direct or collateral. (Tolentino vs. Lim Bun Hioc L6333, May 10, 1956.)chanrobles virtual law library
Consequently, the trial court did not err in holding that the decision in civil case No. 34498 constitutes res
judicata to the present case.
A judgment rendered by a court having jurisdiction of the parties and subject matter is conclusive and
indisputable evidence as to all rights, questions or facts put in issue in the suit and actually adjudicated therein
when the same came again into controversy between the same parties or their privies even though according to
the decision of the question, the subsequent proceedings are on a different cause of action, since the law abhors a
multiplicity of suits.chanroblesvirtualawlibrarychanrobles virtual law library
Another statement of the rule is that any right, fact or matter in issue, and directly adjudicated on,
necessarily involved in, the determination of an action before a competent court in which a judgment or decree is
rendered on the merits is conclusively settled by the judgment therein and cannot again be litigated between the
parties and privies whether or not the claim or demand, purpose, or subject matter of the two suits is the same.
(50 C.J.S. pp. 168- 173.)chanrobles virtual law library
On the other hand, it is equally well settled that a fact which has been directly tried and decided by a court
of competent jurisdiction cannot be contested again between the same parties in the same or any other court, and
that where some controlling fact or question material to the determination of both actions has been determined
in a former suit, and the fact or question is again at issue between the same parties, its adjudication in the first
will, if properly presented, be conclusive of the question in the latter suit, without regard to whether the cause of
action is the same or not, or whether the second suit involves the same or different subject matter, or whether or
not it is the same form of proceeding. In such cases, it is also immaterial that the two actions were based on
different grounds, or tried on different theories, or are instituted for different purposes, and seek different relief.
(Samahang Magsasaka, Inc. vs. Chua Guan, G.R. No. L-7252, Feb. 25, 1955.) [Emphasis supplied]chanrobles
virtual law library
The general rule common to all civilized systems of jurisprudence is that the solemn and deliberate
sentence of the law, pronounced by its appointed organs, upon a disputed fact, or 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 rule of law, more even than an important
principle of public policy; and that it is a fundamental concept in the organization of every jural society. (Ponce
vs. Macadaeg, 91 Phil. 410.)
The second proposition needs no elaborate discussion. A careful perusal of the allegations of facts
constituting the cause of action in the third party complaint reveals that they are but reiterations of the
allegations in the amended complaint and the complaint in intervention in Civil Case No. 34498, and of the
special defenses pleaded by Pedro Bermudez, Loreta Bermudez and Dominga Martin in the present case, that is,
that through deceit, fraud, and misrepresentation practiced on Dominga Martin by the Andrade spouses, they
(herein appellants) lost their lands. But as the issue of ownership of the land, as earlier stated, has been adversely
resolved by the trial court in Civil Case No. 34498, against herein defendants Pedro Bermudez and Loreta
Bermudez, and their mother Dominga Martin, the trial court was then right when it said:

... it appearing that the allegations contained in the said third party complaint have already been decided
and passed upon by this Court in civil case No. 34498, entitled "Pedro Bermudez and Loreta Bermudez vs.
Joaquin Andrade, et al.", which decision has already become final, the admission of the third party complaint is
hereby denied.
For, indeed, the admission of the third party complaint would be superfluous under the circumstances,
considering that the issues therein raised had been passed upon by the trial court in Civil Case No. 34498. We
hold, therefore, that the trial court did not err in denying admission of the third party complaint in this
case.chanroblesvirtualawlibrarychanrobles virtual law library
WHEREFORE, finding the decision appealed from to be in accordance with the law and the evidence, the
same is affirmed with costs against defendants-appellants.
Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez, Castro, Fernando and Capistrano, JJ.,
concur.

FIRST DIVISION
[G.R. No. 122181. June 26, 1998]
JOSE A. LINZAG and the HEIRS of CRISTOBAL A. LINZAG, petitioners, vs. COURT OF APPEALS, THE
PRESIDING JUDGE, Regional Trial Court, Branch IV, Mati, Davao Oriental, PATRICIO S. CUNANAN,
ORLANDO SALVADOR, MANUEL P. BLANCO, JR., JOSE MANUEL SERRANO and the REGISTER OF
DEEDS of Mati, Davao Oriental, respondents.
DECISION
DAVIDE, JR., J.:
May a party aggrieved by a judgment of a cadastral court and who subsequently obtains an unfavorable
judgment in an action to annul the original certificate of title issued pursuant to the former, and then loses both in
the Court of Appeals and in this Court in the appeal from the latter, be allowed to file with the Court of Appeals
an action to annul the judgment of the cadastral court? The Court of Appeals resolved the issue in the negative
on the ground of res judicata. Hence, this special civil action of certiorari.
We affirm the Court of Appeals not only because of absence of grave abuse of discretion, but likewise because
an action for annulment of judgment was no longer available. Moreover, the instant special action was not the
proper remedy against the challenged decision of the Court of Appeals.
As gathered from the decisions of the trial court and the Court of Appeals and the pleadings of the parties, the
following are the material facts in this case:

Petitioners Jose A. Linzag and the heirs of Cristobal A. Linzag are members of the non-Christian tribe known as
the Kalagan tribe of Mati, Davao Oriental. Jose and Cristobal claim to have inherited from their deceased
parents, Datu Joaquin Linzag and Regina Agustino, a parcel of land, otherwise known as Waniban Island,
designated as Lot No. 1222 of the Mati Cadastre, with an area of 36,575 square meters, more or less.[1]
At the cadastral proceeding (CAD CASE No. N-16, LRC Cad. Record N-326) involving Lot No. 1222 before the
then Court of First Instance of Davao Oriental sitting in Mati, Davao Oriental, Cristobal Linzag filed his claim
over said Lot. Another claimant, one Patricio Cunanan, likewise filed a claim.
On 26 July 1971, one Orlando L. Salvador filed a motion[2] to award Lot No. 1222, as an uncontested lot, in his
favor. He alleged therein that he had acquired the rights of Patricio Cunanan for sufficient consideration and that
the other claimant, Cristobal Linzag, had withdrawn his answer/claim in favor of Patricio Cunanan and/or his
successors-in-interest, thereby making said lot as a non-contested lot. At the hearing of the motion, which was
not opposed by the Director of Lands, then represented by the Office of the Provincial Fiscal, Salvador offered in
evidence the following: (a) a Deed of Absolute Sale of Hereditary Rights Over an Unregistered Land covering
Lot No. 1222 executed on 29 December 1970[3] by Patricio S. Cunanan, Avelina C. Salazar, Elena C. Abayari,
Igualdad Cunanan, Diosdado Cunanan, Lakandula Cunanan, Josefina C. Sibala as vendors and Orlando L.
Salvador as vendee; and (b) a verified Withdrawal of Claim/Answer dated 13 July 1971[4] signed by Cristobal
and Jose Linzag and executed in favor of Patricio Cunanan and/or his successors-in-interests.
On 10 August 1971, the cadastral court, on the basis of the foregoing, issued an Order[5] declaring that Salvador
and his predecessors-in-interests had been in peaceful, open, continuous, exclusive and adverse possession of
Lot No. 1222, in concept of an owner for a period of at least 30 years; that Salvador was the successor-ininterest of original claimant Patricio S. Cunanan; and that the lot was a non-contested lot. The court thus
decreed:
WHEREFORE, PREMISES CONSIDERED, this Court hereby adjudicates Lot No. 1222, together with all its
improvements thereon, in favor of:
ORLANDO L. SALVADOR, of legal age, Filipino, married to Jovita B. Ramos-Salvador, a resident of
Paraaque, Rizal.
The Land Registration Commissioner is hereby directed to issue the corresponding decree of registration for said
Lot No. 1222, as soon as this Order becomes final and executory.
After the Order became final, the cadastral court issued an Order[6] directing issuance of the decree of
registration.
In due time, Decree No. N-137262 was issued. Then on 13 October 1971, pursuant to said Decree, Original
Certificate of Title (OCT) No. O-2039[7] covering Lot No. 1222 was issued in the name of Orlando L. Salvador.
On 4 February 1977, petitioners herein filed an action for annulment of title and reconveyance with damages[8]
against private respondents Patricio Cunanan and Orlando Salvador before the Court of First instance of Mati,
Davao Oriental (docketed as Civil Case No. 571).

On 10 June 1977, petitioners filed an amended complaint[9] wherein they alleged, inter alia, that they and their
predecessors-in-interests had been in actual, lawful, peaceful, public, adverse and uninterrupted possession and
occupation of the land since the Spanish regime up to the present; the lot was ancestral land of the Linzags; the
lot had been included in a prior land registration case filed by Patricio Cunanan which was decided against him,
with the land registration court holding that the land was part of the public domain, which decision was
affirmed by the Court of Appeals on 19 November 1960 in CA-G.R. No. 19594-B; that in the cadastral
proceedings, specifically on 13 July 1971 and after the effectivity of said decision of the Court of Appeals,
Patricio Cunanan, with the aid and participation of his son-in-law, Atty. Galileo Sibala, procured, through fraud,
the signatures of Jose and Cristobal Linzag on a document which turned out to be a withdrawal of their claim to
Lot No. 1222 by representing to them that it was a deed of mortgage over the lot in consideration of P3,000.00;
and thereafter, Cunanan, together with the heirs of his deceased wife, sold the lot to Orlando Salvador for the
sum of P25,000.00. Petitioners further alleged that both the withdrawal of claim and deed of absolute sale were
notarized by Atty. Sibala; on the basis of the deed of sale in his favor, Salvador filed a motion with the cadastral
court to adjudicate the lot in his favor as an uncontested lot; that the cadastral court granted the motion and as a
consequence thereof, OCT No. 0-2039 was issued in Salvadors name; and that it was only on 14 May 1974 that
petitioners discovered the fraud. They then prayed for judgment directing the Register of Deeds of Davao
Oriental to issue a certificate of title in petitioners names, and ordering defendants to pay moral and exemplary
damages, attorneys fees and transportation expenses.
In its decision[10] dated 14 February 1984, the trial court dismissed Civil Case No. 571 because the action
[was] improper and that the claim of plaintiffs have not been duly substantiated by them. The court likewise
ruled that plaintiffs therein were not the true owners of the property; plaintiffs failed to prove extrinsic fraud;
there was no evidence that Salvador was a buyer in bad faith; and that the action was filed beyond the
prescriptive period.
Petitioners appealed the above decision to the Court of Appeals (Eighth Division) in CA-G.R. CV No. 03329.
In its decision[11] of 25 July 1989, the Court of Appeals dismissed the appeal on the ground of prescription.
Petitioners thereafter appealed to this Court by way of a petition for review, which was docketed as G.R. No.
89441. In the resolution[12] of 2 October 1989, this Court (First Division) denied the petition for late filing
and decreed that the judgment sought to be reviewed has now become final and executory.
Meanwhile, on 9 November 1993, Original Certificate of Title No. O-2039 was cancelled and the Registry of
Deeds for the Province of Davao Oriental issued a Transfer Certificate of Title No. T-16604[13] in the name of
Manuel P. Blanco, Jr. and Jose Manuel Serrano.
Undaunted by the foregoing adverse events, on 5 December 1994, petitioners filed with the Court of Appeals, a
petition[14] for the annulment of judgment of the then Court of First Instance of Mati, Davao Oriental in CAD.
CASE No. N-16, LRC Cad. Record No. N-326 concerning Lot No. 1222 (docketed as CA-G.R. SP No. 35877).
Impleaded as respondents were the presiding judge of the Regional Trial Court of Mati, Davao Oriental, which
succeeded the former Court of First Instance that decided the cadastral case, herein private respondents Patricio
Cunanan, Orlando Salvador, Manuel Blanco, Jr., Jose Manuel Serrano and the Register of Deeds of Davao
Oriental.
In its decision[15] of 28 February 1995, public respondent Court of Appeals dismissed the petition for being
barred by the judgment in Civil Case No. 571, i.e., on ground of res judicata. The appellate courts extensive

discussion[16] on this issue deserves to be quoted, thus:


On the issue of res judicata, the private respondent point [sic] to the decision of the Court of First Instance of
Davao Oriental in Civil Case 571 affirmed by this Court in CA G.R. CV. 03329. It was argued that this previous
case involved the same parties, subject matter and cause of action as this instant petition, and is, therefore, a bar
to this petition.
An action is barred by a former judgment if (1) the former judgment is final; (2) the court which rendered it has
jurisdiction over the subject matter and the parties; (3) it must be a judgment on the merits; (4) there must be,
between the first and the second actions, identity of parties, subject matter and causes of action.
An examination of the records show [sic] that the first three requirements for the application of the doctrine of
res judicata are present in this case.
The petitioners themselves related in their petition that they had instituted a complaint for annulment of title and
reconveyance with damages against the private respondents, Salvador and Cunanan. The complaint was dated
10 June 1977 and was docketed as Civil Case No. 571 of the then Court of First Instance of Davao Oriental.
On 14 February 1984, the Court of First Instance rendered judgment against the petitioners dismissing their
complaint and ordering them to pay Orlando Salvador P5,000.00 and Patricio Cunanan, P2,000.00 by way of
litigation expenses and attorneys fees (see Decision, Annex J, Petition; Rollo, pp. 50-68).
The judgment was affirmed by this Court in CA G.R. No. 03329 (Jose A. Linzag, et. [sic] al. vs. Patricio Cunan,
et. [sic] al.) in a decision rendered on 25 July 1989 (see copy of Decision; Annex K, Petition; Rollo, pp. 6974).
The petition for review with the Supreme Court was not filed within the extension period granted to the
petitioners. Thus, on 2 October 1989 the Supreme Court issued a Resolution stating that no appeal was taken on
time by the petitioners and the judgment had already become final and executory (Annex L, Petition; Rollo, p.
75).
The judgment in Civil Case 571 (i.e., the annulment case) having already become final as pronounced in the
Supreme Court Resolution, the first requirement for the application of res judicata is, therefore, present.
The Court of First Instance of Davao Oriental undoubtedly has jurisdiction over the subject matter of the case.
The parcel of land in question is located within the province and as such, lies within the territorial jurisdiction of
said court. No question on the jurisdiction of the trial court over the parties appears to have been raised.
The judgment was on the merits as it was rendered after a determination of which party is right and was not
merely based on a preliminary or technical issue (see Santos vs. Intermediate Appellate Court, 145 SCRA 238,
245-246). A reading of the decision of the trial court shows that it was based on matters of substance and not
merely on technical points.
There is also an identity between the parties in this petition and that in Civil Case 571. The petitioners in this
case, Jose Linzag and the Heirs of Cristobal Linzag are likewise the plaintiffs in Civil Case 571. The defendants
in Civil Case 571 are also the private respondents in this case. The inclusion of Manuel Serrano and Jose

Manuel Blanco as private respondents does not affect the identity of the parties as these two are successors-ininterest of original defendant Orlando Salvador.
The subject matter between the two cases are also identical. It is the parcel of land known as Waniban Island in
Mati, Davao Oriental and the certificate of title covering such property.
The issue is whether or not there is an identity in the causes of action between this petition and Civil Case No.
571.
The test generally applied in determining whether causes of action are identical as to warrant the application of
the doctrine of res judicata is to consider whether there is an identity in the facts essential to the maintenance of
the two actions or whether the same evidence will sustain both. This is regardless [of whether] the form or
nature of the two actions are different. If the same facts or evidence can sustain either, the two actions are
considered the same so that the judgment in one is [a] bar to the other. If, however, the two actions rest upon
two different state [sic] of facts, or if different proofs would be required to sustain the two actions, a judgment in
one is not a bar to the maintenance of the other (Nabus vs. Court of Appeals, 193 SCRA 732; Aroc vs. Peoples
Homesite and Housing Corporation, 81 SCRA 350; Pagsisihan vs. Court of Appeals, 95 SCRA 540).
In this petition, the petitioners claim for nullity of judgment and their argument of lack of notice to them in the
cadastral case [is] essentially based on allegations of fraud. As narrated earlier, the petitioners also alleged that
the documents submitted by the private respondents to support their application for registration were fraudulent.
They further alleged that the withdrawal of claim filed in their behalf in the cadastral case was procured through
fraud.
It is, however, clear from the complaint and the decision in Civil Case 571, attached to this petition, that these
issues have already been raised by the petitioners and passed upon by the trial court. This can be shown by the
following excerpts of the decision of the Court of First Instance.
In any case, even granting arguendo that plaintiffs or their predecessors-in-interest have been in possession of
the property before 1945, it would appear that at the time of the filing of the action, they had no more right [to]
the property. The main thrust of plaintiffs assault on the validity of defendant Orlando Salvador is that the
waiver of claim is null and void, did not reflect truly the intention of the parties.
An examination of the testimonies of the two (2) witnesses for the plaintiffs, Jose Linzag and Salvacion vda. De
Linzag, who were twice presented as witnesses will show that plaintiffs were not able to successfully
substantiate their claim on the invalidity of said withdrawal of answer or claim. Nothing was said in their
testimonies as would support the contention that the said instrument was not validly executed.
xxx
On the second requirement, that the land must be wrongfully registered through fraud, it is clear from
jurisprudence that the fraud in securing title must be actual fraud and must be proven and that the said fraud
must be extrinsic. It is clear that as earlier discussed, plaintiffs failed to prove any actual fraud. The alleged
fraud plaintiffs claimed is not extrinsic fraud, granting that fraud was committed. xxx (See CFI Decision, pp. 10,
15; Rollo, pp. 59, 64)

Notably also, the underlying objective or relief sought in this petition and in the earlier case are essentially the
same. It is the nullification of the land title in the name of the private respondents and the adjudication of the
land in question to the petitioners.
The only difference is the form and nature of the two actions; while the earlier complaint is for the annulment of
the land title, this present petition is for the nullification of the judgment upon which the title sought to nullified
(sic) in the first case was issued.
It is readily apparent, therefore, that were this petition to be given due course, the same evidence or set of facts
as that considered by the Court of First Instance in the annulment case, Civil Case 571, will be also be [sic]
considered in this petition. Applying then the test earlier discussed, this court finds that the causes of action in
Civil Case 571 and in this petition are the same as to warrant the application of the doctrine of res judicata.
In sum, we find that all the requirements for the application of res judicata are present in this case. This petition
should, therefore, be dismissed. The difference in the form of the actions instituted is immaterial. The
petitioners may not escape the effect of the doctrine by merely varying the form of his [sic] action (Filinvest
Credit Corporation vs. Intermediate Appellate Court, 207 SCRA 59, 63; Sangalang vs. Caparas, 151 SCRA 53;
Ibabao vs. Court of Appeals, 150 SCRA 76, 85).
The underlying philosophy of the doctrine of res judicata is that parties should not be permitted to litigate the
same issue more than once. When a right or fact has been judicially tried and determined by a court of
competent jurisdiction, or an opportunity for such trial has been given, the judgment of the court, so long as it
remains unreversed, should be conclusive upon the parties and those in privity in them in law or estate. It is to
the interest of the public that there should be an end to litigation by the same parties and their privies over a
subject once fully and fairly adjudicated (Ibabao vs. Intermediate Appellate Court, supra, at p. 85; Sangalang vs.
Caparas, supra, at p. 59).
As this petition is already barred by the judgment in Civil Case 571, We see no other course of action but to
resolve to dismiss this petition.
Their motion for reconsideration[17] and supplemental motion for reconsideration[18] having been denied by
the Court of Appeals in its Resolution[19] of 3 October 1995, on the ground that there existed no new and
cogent ground to warrant reversal or modification, petitioners filed the instant special action for certiorari with
mandamus, raising the following issues:
(1) WHETHER OR NOT THE RESPONDENT COURT OF APPEALS CAN DENY DUE COURSE TO THE
INSTANT PETITION FOR ANNULMENT OF JUDGMENT ON THE BASIS THAT THERE WAS AN
EARLIER CASE FOR NULLIFICATION OF TITLE BEFORE THE REGIONAL TRIAL COURT;
(2) WHETHER OR NOT A PETITION FOR DECLARATION OF NULLITY OF TITLE FILED AND
DISMISSED BY THE REGIONAL TRIAL COURT IS A BAR (RES JUDICATA) TO THE FILING OF A
PETITION FOR ANNULMENT OF JUDGMENT BEFORE THE COURT OF APPEALS OF AN LRC
CASE RENDRED BY THE REGIONAL TRIAL COURT SITTING AS A CADASTRAL COURT;
(3) WHETHER OF NOT THE RESPONDENT COURT OF APPEALS CAN DENY DUE COURSE TO A
VALID PETITION ORIGINALLY FILED BEFORE IT MERELY BECAUSE A CASE FOR

ANNULMENT OF TITLE WAS ALREADY FILED AND DECIDED BEFORE THE REGIONAL TRIAL
COURT;
(4) WHETHER OR NOT PETITION FOR ANNULMENT OF JUDGMENT OF WHICH THE HONORABLE
COURT OF APPEALS HAS ORIGINAL JURISDICTION IS THE SAME AS A PETITION FOR
NULLITY OF TITLE WHICH THE REGIONAL TRIAL COURT HAS ORIGINAL JURISDICTION.
(5) WHETHER OR NOT THE RESPONDENT COURT VIOLATED THE CONSTITUTIONAL RIGHT OF
THE PETITIONERS OF DUE PROCESS IN DISMISSING THE INSTANT CASE EVEN BEFORE
RECEIVING EVIDENCE AND WITHOUT DETERMINING THE ACTUAL MERITS OF THE
PETITION FILED FOR THE ANNULMENT OF A PATENTLY NULL AND VOID JUDGMENT.
Petitioners contend that the decision in Civil Case No. 571, an action for annulment of title and reconveyance
with damages, does not constitute res judicata to bar the instant petition for annulment of judgment. Petitioners
further insist that the 10 August 1971 decision of the cadastral court is void for violation of due process and
extrinsic fraud, stressing that a void judgment never acquires finality and is subject to collateral attack.
Petitioners underscore that in the proceedings before the cadastral court they were not informed of the dates of
hearing, and as a result, were unable to hire the services of counsel. Thus if they had been afforded their day in
court, they could have proved possession of the land for the required number of years that would have entitled
them to ownership thereof; and that private respondents procured spurious documents showing a waiver of
petitioners claim over the disputed property. Moreover, petitioners were not furnished a copy of the trial courts
decision. Finally, petitioners contend that the transfer of the land title to private respondents Blanco and Serrano,
who failed to verify true ownership of the land, was part of Salvadors fraudulent schemes and strategies to
deprive petitioners of an opportunity to recover the land.
Cunanans comment[20] filed on 12 January 1996 does not meet squarely the substantive issues raised by
petitioners and, instead, interposes the following defenses: (1) he is not a party-in-interest, having sold all his
rights over the subject property to Orlando Salvador; (2) Galileo Sibala has not appeared as counsel on behalf of
the other respondents; (3) there is no new and cogent reason to disturb the 28 February 1995 decision as the
allegations in the petition are a mere rehash of the issues already passed upon by respondent Court of Appeals;
and (4) the petition fails to show that petitioners motion for reconsideration was filed within the reglementary
period.
In their comment filed on 4 October 1996, respondents Manuel P. Blanco, Jr. and Jose Manuel Serrano contend
that: (1) petitioners were not denied due process since they were afforded ample opportunity to present their side
of the controversy; (2) the trial courts finding on the issue of possession and extrinsic fraud must be accorded
great weight and respect, if not finality, on appeal; (3)the transfer certificate of title evidencing their ownership
over the land has become incontrovertible and indefeasible; (4) they are purchasers in good faith and for value
and may safely rely on what appears on the face of the title; (5) the instant petition is barred by res judicata; and
(7) there is no showing that respondent Court of Appeals gravely abused its discretion when it refused to give
due course to the petition.
Petitioners filed separate replies to the comments of Cunanan and Blanco and Serrano.
In his manifestation filed on 20 September 1996, counsel for private respondent Cunanan informed the Court
that Cunanan died on 8 April 1996, and on 20 November 1996, said counsel submitted the names and addresses

of the heirs of Cunanan. Upon motion of petitioners, to which the other parties submitted their comment, the
Court granted, on 2 July 1997, petitioners motion to substitute the heirs of Cunanan for the latter.
The Court resolved to give due course to the petition and required the parties to submit their memoranda, which
petitioners and respondents Serrano and Blanco did on 4 September 1997 and 26 August 1997, respectively. The
parties likewise filed reply memoranda.
This petition is devoid of merit.
Respondent Court of Appeals did not err, much less, commit grave abuse of discretion, in dismissing CA-G.R.
SP No. 35877 on ground of res judicata.
Paragraph (b) of Section 47(b), Rule 39 of the 1997 Rules of Civil Procedure, which was likewise Section 47(b),
Rule 39 of the 1964 Rules of Court, enshrines the doctrine of res judicata:
SEC. 47. Effect of judgment 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 under the same title and in the same capacity
The doctrine of res judicata is a rule which pervades every well-regulated system of jurisprudence and is
founded upon two grounds embodied in various maxims of the common law, namely: (1) public policy and
necessity which makes it to the interest of the State that there should be an end to litigation - republicae ut sit
litium, and (2) the hardship on the individual that he should be vexed twice for the same cause nemo debet bis
vexari et eadem causa. A contrary doctrine would subject the public peace and quiet to the will and neglect of
individuals and prefer gratification of the litigious disposition on the part of suitors to the preservation of the
public tranquility and happiness.[21]
The requisites of res judicata are: (1) there must be a final judgment or order; (2) the court rendering it must
have jurisdiction over the subject matter and the parties; (3) it must be a judgment or order on the merits; and (4)
there must be, between the two cases, identity of parties, subject matter and causes of action.[22]
The doctrine of res judicata has two aspects, to wit: (1) the effect of a judgment as a bar to the prosecution of a
second action upon the same claim, demand or cause of action; and (2) preclude relitigation of a particular fact
or issue in another action between the same parties on a different claim or cause of action.[23] As earlier shown,
the Court of Appeals convincingly demonstrated that the decision in Civil Case No. 571 of the Court of First
Instance of Mati, Davao Oriental operates to bar, on the ground of res judicata, the case for annulment of
judgment -- CA-G.R. SP No. 35877. As stated earlier, the decision in Civil Case No. 571 dismissed petitioners
complaint for annulment of title and reconveyance with damages; and, in effect, affirmed the judgment of the
cadastral court. The judgment in Civil Case No. 571 was then affirmed by the Court of Appeals in its decision in
CA-G.R. CV No. 03329, while a petition to review the latter was denied by this Court in G.R. No. 89441.

The claim of petitioners that the judgment in Civil Case No. 571 does not bar CA-G.R. SP No. 35877 because
the former was for annulment of title only, while the latter was for annulment of the judgment, is palpably
unmeritorious. There is here a clear case of hair-splitting. It is settled that a party cannot evade or avoid the
application of res judicata by simply varying the form of his action or adopting a different method of presenting
his case.[24] This is as good a time as any to remind lawyers that any attempt to do so merits the Courts
condemnation for being an abuse or misuse of the rules of procedure.
We stress in this connection that petitioners may have resorted to the filing of Civil Case No. 571 because they
had lost the right to file a petition for review. It is settled that a party deprived of his property in a cadastral
proceeding may file within one (1) year from entry of the decree, a petition for review. After the lapse of said
period, if the property has not yet passed on to an innocent purchaser for value, an action for reconveyance may
still be filed by the aggrieved party.[25] An action for reconveyance attacks not only the judgment of the
cadastral court; it likewise seeks confirmation by the court of plaintiffs title to the land.
Another more telling reason why CA-G.R. SP No. 35877 should be dismissed was that the remedy of annulment
of judgment allowed in Section 9(2) of B.P. Blg. 129 was no longer available to petitioners. Such is available
only where the ordinary remedies of new trial, appeal, petition for relief or other appropriate remedies are no
longer available through no fault of petitioners.[26] Here, petitioners had, in fact, availed of an action for
reconveyance where they litigated the grounds for annulment of judgment. There would be no end to litigations
if parties who have unsuccessfully availed of any of the appropriate remedies or lost them through their fault
would still be heard in an action to annul the judgment.
A final word before ending.
The proper remedy of a party aggrieved by a decision of the Court of Appeals in an action to annul a judgment
of a Regional Trial Court (or of its predecessor the Court of First Instance) is a petition for review on certiorari
under Rule 45, where only questions of law may be raised. Petitioners, however, have availed of the special civil
action for certiorari and mandamus under Rule 65 of the Rules of Court. No special reasons exist in this case to
justify resort to Rule 65. Of course, every lawyer should be familiar with the obvious distinctions[27]between a
special civil action for certiorari under Rule 65 and an appeal by petition for review on certiorari under Rule 45.
For one, that under Rule 45 is a continuation of the judgment complained of, while that under Rule 65 is an
original or independent action.[28] It is likewise settled that, generally, the special civil action of certiorari under
Rule 65 will not be allowed as a substitute for failure to timely file a petition for review under Rule 45[29] or for
the lost remedy of appeal.[30]
The wrong choice of remedy thus provides another reason to dismiss this petition.
WHEREFORE, the instant petition is hereby DISMISSED for lack of merit and the challenged decision of the
Court of Appeals in CA-G.R. SP No. 35877 is AFFIRMED in toto.
Costs against petitioners.
SO ORDERED.
Bellosillo, Vitug, Panganiban and Quisumbing, JJ. concur

PERKINS VS. ROXAS Leave a comment


IDONAH PERKINS vs. ROXAS ET AL.
GRN 47517, June 27, 1941
FACTS:
July 5, 1938, respondent Eugene Perkins filed a complaint in the CFI- Manila against the Benguet Consolidated
Mining Company for the recovery of a sum consisting of dividends which have been declared and made payable
on shares of stock registered in his name, payment of which was being withheld by the company, and for the
recognition of his right to the control and disposal of said shares to the exclusion of all others. The company
alleged, by way of defense that the withholding of plaintiffs right to the disposal and control of the shares was
due to certain demands made with respect to said shares by the petitioner Idonah Perkins, and by one Engelhard.
Eugene Perkins included in his modified complaint as parties defendants petitioner, Idonah Perkins, and
Engelhard. Eugene Perkins prayed that petitioner Idonah Perkins and H. Engelhard be adjudged without interest
in the shares of stock in question and excluded from any claim they assert thereon. Summons by publication
were served upon the nonresident defendants Idonah Perkins and Engelhard. Engelhard filed his answer.
Petitioner filed her answer with a crosscomplaint in which she sets up a judgment allegedly obtained by her
against respondent Eugene Perkins, from the SC of the State of New York, wherein it is declared that she is the
sole legal owner and entitled to the possession and control of the shares of stock in question with all the cash
dividends declared thereon by the Benguet Consolidated Mining Company.
Idonah Perkins filed a demurrer thereto on the ground that the court has no jurisdiction of the subject of the
action, because the alleged judgment of the SC of the State of New York is res judicata. Petitioners demurrer
was overruled, thus this petition.
ISSUE:
WON in view of the alleged judgment entered in favor of the petitioner by the SC of New York and which is
claimed by her to be res judicata on all questions raised by the respondent, Eugene Perkins, the local court has
jurisdiction over the subject matter of the action.
RULING:
By jurisdiction over the subject matter is meant the nature of the cause of action and of the relief sought, and this
is conferred by the sovereign authority which organizes the court, and is to be sought for in general nature of its
powers, or in authority specially conferred. In the present case, the amended complaint filed by the respondent,
Eugene Perkins alleged calls for the adjudication of title to certain shares of stock of the Benguet Consolidated
Mining Company and the granting of affirmative reliefs, which fall within the general jurisdiction of the CFIManila. Similarly CFI- Manila is empowered to adjudicate the several demands contained in petitioners
crosscomplaint.
Idonah Perkins in her crosscomplaint brought suit against Eugene Perkins and the Benguet Consolidated Mining
Company upon the alleged judgment of the SC of the State of New York and asked the court below to render

judgment enforcing that New York judgment, and to issue execution thereon. This is a form of action recognized
by section 309 of the Code of Civil Procedure (now section 47, Rule 39, Rules of Court) and which falls within
the general jurisdiction of the CFI- Manila, to adjudicate, settle and determine.
The petitioner expresses the fear that the respondent judge may render judgment annulling the final, subsisting,
valid judgment rendered and entered in this petitioners favor by the courts of the State of New York, which
decision is res judicata on all the questions constituting the subject matter of civil case and argues on the
assumption that the respondent judge is without jurisdiction to take cognizance of the cause. Whether or not the
respondent judge in the course of the proceedings will give validity and efficacy to the New York judgment set
up by the petitioner in her cross-complaint is a question that goes to the merits of the controversy and relates to
the rights of the parties as between each other, and not to the jurisdiction or power of the court. The test of
jurisdiction is whether or not the tribunal has power to enter upon the inquiry, not whether its conclusion in the
course of it is right or wrong. If its decision is erroneous, its judgment can be reversed on appeal; but its
determination of the question, which the petitioner here anticipates and seeks to prevent, is the exercise by that
court and the rightful exercise of its jurisdiction.
Petition denied.

PHILSEC VS. CA Leave a comment


PHILSEC INVESTMENT et al vs.CA et al
G.R. No. 103493
June 19, 1997
FACTS: Private respondent Ducat obtained separate loans from petitioners Ayala International Finance Limited
(AYALA) and Philsec Investment Corp (PHILSEC), secured by shares of stock owned by Ducat.

In order to facilitate the payment of the loans, private respondent 1488, Inc., through its president, private
respondent Daic, assumed Ducats obligation under an Agreement, whereby 1488, Inc. executed a Warranty
Deed with Vendors Lien by which it sold to petitioner Athona Holdings, N.V. (ATHONA) a parcel of land in
Texas, U.S.A., while PHILSEC and AYALA extended a loan to ATHONA as initial payment of the purchase
price. The balance was to be paid by means of a promissory note executed by ATHONA in favor of 1488, Inc.
Subsequently, upon their receipt of the money from 1488, Inc., PHILSEC and AYALA released Ducat from his
indebtedness and delivered to 1488, Inc. all the shares of stock in their possession belonging to Ducat.
As ATHONA failed to pay the interest on the balance, the entire amount covered by the note became due and
demandable. Accordingly, private respondent 1488, Inc. sued petitioners PHILSEC, AYALA, and ATHONA in
the United States for payment of the balance and for damages for breach of contract and for fraud allegedly
perpetrated by petitioners in misrepresenting the marketability of the shares of stock delivered to 1488, Inc.
under the Agreement.
While the Civil Case was pending in the United States, petitioners filed a complaint For Sum of Money with
Damages and Writ of Preliminary Attachment against private respondents in the RTC Makati. The complaint
reiterated the allegation of petitioners in their respective counterclaims in the Civil Action in the United States
District Court of Southern Texas that private respondents committed fraud by selling the property at a price 400
percent more than its true value.
Ducat moved to dismiss the Civil Case in the RTC-Makati on the grounds of (1) litis pendentia, vis-a-vis the
Civil Action in the U.S., (2) forum non conveniens, and (3) failure of petitioners PHILSEC and BPI-IFL to state
a cause of action.
The trial court granted Ducats MTD, stating that the evidentiary requirements of the controversy may be more
suitably tried before the forum of the litis pendentia in the U.S., under the principle in private international law
of forum non conveniens, even as it noted that Ducat was not a party in the U.S. case.
Petitioners appealed to the CA, arguing that the trial court erred in applying the principle of litis pendentia and
forum non conveniens.
The CA affirmed the dismissal of Civil Case against Ducat, 1488, Inc., and Daic on the ground of litis pendentia.
ISSUE: is the Civil Case in the RTC-Makati barred by the judgment of the U.S. court?
HELD: CA reversed. Case remanded to RTC-Makati
NO
While this Court has given the effect of res judicata to foreign judgments in several cases, it was after the parties
opposed to the judgment had been given ample opportunity to repel them on grounds allowed under the law.
This is because in this jurisdiction, with respect to actions in personam, as distinguished from actions in rem, a
foreign judgment merely constitutes prima facie evidence of the justness of the claim of a party and, as such, is
subject to proof to the contrary. Rule 39, 50 provides:

Sec. 50. Effect of foreign judgments. The effect of a judgment of a tribunal of a foreign country, having
jurisdiction to pronounce the judgment is as follows:
(a) In case of a judgment upon a specific thing, the judgment is conclusive upon the title to the thing;
(b) In case of a judgment against a person, the judgment is presumptive evidence of a right as between the
parties and their successors in interest by a subsequent title; but the judgment may be repelled by evidence of a
want of jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or fact.
In the case at bar, it cannot be said that petitioners were given the opportunity to challenge the judgment of the
U.S. court as basis for declaring it res judicata or conclusive of the rights of private respondents. The
proceedings in the trial court were summary. Neither the trial court nor the appellate court was even furnished
copies of the pleadings in the U.S. court or apprised of the evidence presented thereat, to assure a proper
determination of whether the issues then being litigated in the U.S. court were exactly the issues raised in this
case such that the judgment that might be rendered would constitute res judicata.
Second. Nor is the trial courts refusal to take cognizance of the case justifiable under the principle of forum non
conveniens:
First, a MTD is limited to the grounds under Rule 16, sec.1, which does not include forum non conveniens. The
propriety of dismissing a case based on this principle requires a factual determination, hence, it is more properly
considered a matter of defense.
Second, while it is within the discretion of the trial court to abstain from assuming jurisdiction on this ground, it
should do so only after vital facts are established, to determine whether special circumstances require the
courts desistance.

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