Professional Documents
Culture Documents
2003 Update On Remedial Law
2003 Update On Remedial Law
I. CIVIL PROCEDURE
A. Jurisdiction
1. Departure From Tijam v. Sibonhanoy
Atuel v. Valdez, 403 SCRA 517, June 10, 2003
Even if the parties never questioned the jurisdiction of the DARAB as in fact they
actively participated in the proceedings thereof, the SC nonetheless ruled upon the issue of
jurisdiction and pronounced the DARAB to have no jurisdiction because there was no tenancy
relationship between the parties. The High Court ruled, contrary to Tijam v. Sibonhanoy, that
estoppel cannot confer upon a court or a tribunal a jurisdiction that it does not have under the
law.
Note: Just about 6 months before Atuel v. Valdez, the SC in Gonzaga v. CA, G.R. No.
144025, Dec. 27, 2002 ruled that petitioner having invoked the jurisdiction of the trial court,
cannot after receiving an adverse verdict, claim that that court had no jurisdiction for the
subject matter of the suit properly belongs to the HLURB. The High Court reiterated the
Sibonhanoy doctrine.
Similarly, a year earlier, in the case of Alcantara v. Commission on Settlement of Land
Problems (COSLAP), G.R. No. 145838, July 20, 2001, the SC ruled that petitioner is in
estoppel from questioning the jurisdiction of the COSLAP after participating actively n the
proceedings before said commission by filing an answer and a motion for reconsideration of the
decision of the latter without raising the issue of jurisdiction.
2. Jurisdiction over an Action for Expropriation (Rule 67, RCP)
Bardellon v. Barangay Masili of Calamba, G.R. No. 146886, April 30, 2003
An action for expropriation is one whose subject is incapable of pecuniary estimation
and it is, therefore, within the exclusive jurisdiction of the RTC.
3. Jurisdiction over Matters Pertaining to the Settlement of Estate of a Deceased Person (Rules 7391, RRC)
Arbolario v. CA, G.R. No. 129163, (April 22, 2003)
An ordinary court hearing an action for recovery of possession of a realty has no
jurisdiction to make determinations re the heirs of a decedent, proof of filiation, the estate of
the decedent and claims against it. Only a probate court in a special proceeding for the
settlement of the estate of a deceased person can resolve those questions.
Note: The same ruling was made in Natcher v. CA, G.R. No. 133000, Oct. 2, 2001
where a regular court was resolving the question of the alleged advancement of property made
by the decedent to one of his heirs. The SC ruled that the regular court had no jurisdiction over
the issue. It belongs to the probate court.
4. Custom's Seizure and Detention of Imported Merchandise
Zuo v. Judge Cabredo, A.M. RTJ-1779, April 30, 2003
A regular court does not have jurisdiction over seizure and forfeiture proceedings
undertaken by the Deputy Collector of Customs. The action of this official is reviewable by the
Collector of Customs whose action is reviewable by the Court of Tax Appeals.
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deceased. The order of the court admitting the motion for substitution of party does not comply
with the rule.
Notes:
a. If heirs of original party are also original parties over whom the court had already
acquired jurisdiction over their person, a formal order of substitution is not necessary.
b. Even if there is no formal substitution of deceased party of the heirs actively
participated on the hearing as witnesses who gave evidence in support of the deceased's cause,
the defect is cured.
D.
E. Forum Shopping (S.C. Cir. No. 28-91 and S.C. Cir. No. 04-94)
1. UP v. Susi, G.R. No. 130912, Feb. 14, 2003
Susi claimed part of the titled Diliman campus of UP on the strength of a certificate of
title in her name.
She tried several times to fence and occupy said portion of the UP campus but was
repulsed. So she filed an action for damages and injunction with prayer for a TRO and WPI
against UP and some of its officials.
UP filed an action for cancellation of the title of Susi over said property.
Issue: Is there forum shopping?
Held: None. UP could not have raised as counterclaim the cancellation of title on the
damage suit because the court would not have jurisdiction thereof. Cancellation of title can
only be pursued on a separate and direct action for said purpose. Certificate of title under the
torrens systems cannot be collaterally attached.
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mode parties for as long as those impleaded in the subsequent case represent the interest which
was the subject mater of the previous case, the requirement is satisfied.
That the two cases are different (like one is for declaratory relief while the other is for
specific performance) does not negate res judicata if the issues on both cases are substantially
the same.
2. Rivera v. CA, G.R. No. 141863, June 30, 2003
Double Jeopardy Rule 16, Sec. 1, RCP
A judgment in an accion publiciana does not bar an accion reivindicatoria over the said
land. Determinations of ownership in the accion publiciana should be treated as provisional in
nature.
I.
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That the unlawful detainer case was filed later than the action for declaratory relief
is of no moment because what is important is which of the two actions is the more appropriate
one to resolve the controversy between plaintiff and defendant.
Notes:
a) Rosales v. CFI of Lanao del Norte, 154 SCRA 153
The MTC can resolve in an unlawful detainer case the issue of the right of a lessee
to a renewal of the contract of lease. This is to prevent the multiplicity of suits.
b) University Physicians Services, inc. v. CA, 233 SCRA 869
In resolving which of 2 cases, one for damages and another for ejectment filed in 2
different courts involving the same parties and subject matter, the SC ruled that the action for
damages should be dismissed. The issues on damages may be resolved in the ejectment case.
The filing of the action for damages with an application for preliminary injunction was merely
a pre-emptive action to forestall the filing of the ejectment case.
c) Alvir v. Vera, 230 SCRA 357
In an ejectment case the MTC can make a determination on the following incidents:
a. whether or not the relationship between the parties is one of landlord and tenant.
b. whether or not there is a lease contract and whether or not the lease contract had already
expired.
c. The just and reasonable amount of the rent and the date when it will take effect.
d. The right of the tenant to keep the premises against the will of the landlord.
e. If the defendant has built on the land a substantial and valuable building and there is no
dispute between the parties as to the ownership of the land and the building, their rights
shall be governed according to the Civil Code.
f. The power of the court to fix the period of lease (Divina-gracia v. CA, 102 SCRA 189;
Ramirez v. Chit, 221 SCRA 1364)
2. Parties Against Whom a Decision in a ejectment case
may be Enforced (Rule 39, RCP)
Sunflower Neighborhood Assn. v. CA, G.R. No. 136274, Sept. 4, 2003
A decision ejecting a homeowner's association may be enforced to eject the members of
the association even if they were not impleaded in the case. A judgment in an ejectment case is
binding even to non-parties if he or she is:
a)
b)
c)
d)
e)
f)
In this case, it was the Sunflower Neighborhood Assn. which was sued. The final
decision was sought to be enforced against the unimpleaded members. The SC ruled that the
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decision can be enforced against the members because they are mere squatters or trespassers
without any right to occupy plaintiff's property.
Q. Contempt (Rule 71, RCP)
1. Imprisonment of Respondent Until He Complies with the Order of the Court (Sec.
8, Rule 71, RCP)
Vergara v. Judge Gedorio, G.R. No. 154037, April 30, 2003.
In a probate proceeding, the court ordered Vergara to pay the administratrix rentals for
the property he was occupying. Vergara refused to pay because according to him he already
paid an advance rental to one who claimed to be one of the heirs of the decedent. The
administratrix filed a petition for contempt against Vergara. After hearing the court rendered a
decision ordering Vergara to pay a fine of P30,000.00 and his directing his imprisonment until
he pays the rentals.
Issue: Had the judge exercised his contempt power properly?
Held:
The invocation of the judge of Sec. 8, Rule 71 of the RCP was wrong. The
enforcement of the order to pay rental should be based upon Sec. 9, Rule 39, RCP which is to
levy upon properties of the respondent to satisfy the rentals in arrears.
Payment of rentals is covered by the constitutional guarantee against imprisonment
and so the imprisonment of Vergara was unlawful.
2. Torcende v. Judge Sardido, A.M.No. MTJ-99-1238, Jan. 24, 2003
For the second time, the accused appeared without counsel. His counsel filed on the
day of the hearing a motion to postpone without notice of hearing. The judge denied the
motion and slapped a fine of P1,000.00 against counsel for failure to appear and for violating
the rules on motions.
Ruling:
The judge acted with gross ignorance of the law. The act of counsel at most
constituted only indirect contempt and not direct contempt and so summary of conviction was
improper.
In indirect contempt, a written charge is necessary pursuant to Sec. 7, Rule 71 of the
Rules of Court. The written charge may partake of the nature of: (1) an order requiring the
respondent (not accused) to show cause why he should not be punished for contempt of court
for having committed the contemptuous acts imputed against him; and (2) a petition for
contempt by way of special civil action under Rule 71 of the Rules of court. This written
charge applies if the contemptuous act was committed against a court or judicial officer
without authority to punish the contemptuous act.
Respondent judge has already been administratively sanctioned twice and this being
the third time, he was dismissed.
R. Miscellaneous Subjects
1. Notice of Lis Pendens
Atlantic Erectors, Inc. v. Herbal Cave Realty
Corporation, G.R. No. 148568, March 20, 2003
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Claiming that X failed to pay the materials it obtained from A to build houses, A
filed an action for sum of money and damages against X. On the same day, A caused to be
annotated a notice of lis pendens on the titles of the land in which the houses were erected. X
filed a cancellation of the notice of lis pendens because the action is just a money claim and
there was no allegation about recovery of possession of a realty or enforcement of a lien. The
court ordered the cancellation of the notice of lis pendens. A filed an MR but it was denied.
Hence, the petition for certiorari.
Held: The lien of a supplier of material is the one mentioned in Art. 2242 of the
Civil Code. In this article, it merely grants the supplies of materials a preferred lien over the
structure built with said materials. The complaint however did not raise that lien and so an
action was merely a personal action for collection of money.
But even if that lien had been raised, still the annotation of the notice of lis pendens
was improper. Art. 2242 applies only when there are other claims against the realty by other
creditors and the value of the property is not sufficient to pay all the claims. No such situation
obtained in this case.
Notice of lis pendens may be availed of only on the following cases:
a) action to recover possession of real estate
b) action for partition
c) any other court proceedings that directly affect title to a realty or the use or
occupation thereof
d) any action seeking to establish a right to, or an equitable estate or interest in a
specific real property to enforce a lien.
2. Extrajudicial Foreclosure of Mortgage
Quano v. CA, G.R. No. 129279, March 4, 2003
When a scheduled extrajudicial foreclosure of real estate mortgage is cancelled and
reset to another date, the requirements of posting of notices and publication of notice should be
repeated. Failure to do so renders the proceedings null and void because these requirements
are jurisdictional.
The parties cannot agree to waive re-publication because as earlier held in PNB v.
Nepomuceno Production, Inc., G.R. No. 135479, Dec. 27, 2002, the publication of notice
does not only benefit the mortgagor but the general public because other people who come to
know of it may want to bid.
There are three (3) kinds of sales under the law:
1. ordinary execution sale which is governed by Rule 39, RC.
2. judicial foreclosure sale which is governed by Rule 68, RCP.
3. extrajudicial foreclosure sale which is governed by Art. 3135 as amended by Art.
4118.
3. Authority of a Judge to Act on Cases in the Court
which He Temporarily Vacated
Executive Judge Abad Santos v. Judge de Guzman, AM No. 96-1-05-RTC, Jan. 28, 2003
Judge de Guzman was the regular presiding judge of a Makati RTC. He was assigned
to a Pasay court. Judge Fernandez was detailed as a replacement of Judge de Guzman in the
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Makati court. Subsequently, Judge de Guzman was transferred to the Manila court. While
acting as judge of the Manila court, he decided a case of the Makati court which was already
submitted for decision before he left that court. On motion of the prevailing party, Judge de
Guzman also granted a motion for execution pending appeal.
Issue: Did Judge de Guzman have the authority to render the decision and grant
execution pending appeal of his decision.
Held:
a) Judge de Guzman had authority to decide the Makati court case because the case
was submitted for decision while he was still the presiding judge of that court. (Sec. 9, Rule
135, RRC)
b) It was however improper for Judge de Guzman to act upon the motion for
execution pending appeal of his decision. This should be resolved by the judge who replaced
him, Judge Fernandez.
c) While a judge who has been assigned to another court may resolve motions for
reconsideration and new trial which were already filed before he left the court, the new judge
who replaced him is the only one who can conduct the new trial.
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1. Double Jeopardy
People v. Degamo, GR No. 121211, April 30, 2003
The accused was charged with rape. After his arraignment, the prosecutor moved to
amend the information to allege that as a result of the rape, the victim became insane. Over
the opposition of the accused, the court granted the motion.
Held: There is no double jeopardy because the insanity of the victim became
manifest only after the arraignment.
2. Provisional Dismissal
People v. Lacson, G.R. No. 149453, April 1, 2003
Rule 117, Sec. 8, RCrP. Time-bar for reinstating or re-filing a provisionally dismissed
case.
Lacson and several others were charged with multiple murder for the killing of
alleged members of the Kuratong Baleleng gang. In the trial court, Lacson filed a motion for
the judicial determination of probable cause and for examination of witnesses. Since in the
meantime all the main prosecution witnesses had either left the country or executed affidavits
of recantation so that no witness of the prosecution whose testimony was vital appeared
during the scheduled examination of witnesses, and determining that there was no probable
cause, Judge W. Agnir provisionally dismissed the case on March 29, 1999.
Meanwhile, the new Rules of Criminal Procedure took effect on December 1, 2000
containing a new provision, Sec. 8, Rule 117 which states:
Sec. 8. Provisional dismissal. A case shall not be provisionally dismissed except with
the express consent of the accused and with notice to the offended party.
The provisional dismissal of offenses punishable by imprisonment not exceeding six
(6) years or a fine of any amount, or both, shall became permanent one (1) after the issuance
of the order without the case having been revived. With respect to offenses punishable by
imprisonment of more than six (6) years, this provisional dismissal shall become permanent
two (2) years after issuance of the order without the case having been revived.
Note: The Revised Penal Code provides:
Art. 90, RPC. Prescription of Crimes.
Crimes punishable by death, reclusion
perpetua or reclusion temporal shall prescribe in twenty years. Crimes punishable by other
effective penalties shall prescribed in fifteen years. Etcetera.
After the effectivity of the new rule in the RCrP, but after 2 years from the provisional
dismissal of the case, the prosecution claiming that there are new witnesses, filed an
Information against Lacson and his co-accused. Some persons were also added as accused.
plus new accused.
Lacson challenged the refiling of the case.
Ruling of the SC:
1. The prescriptive period in Art. 90 of the RPC is a substantive law and the period therein
fixed is jurisdictional. The time-bar under the RCP is akin to a special procedural
limitation qualifying the State's right to persecute so that the lapse of the time-bar
operates to extinguish the right of the State to prosecute the accused. The time-bar in
the RCP does not reduce the periods under Art. 90, RPC. It is just a limitation of the
right of the State to revive a criminal case against an accused after the Information
had been filed, but subsequently provisionally dismissed with the express consent of
the accused.
2.
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The requisites for the application of Sec. 8, Rule 117, RCP are the following:
a) the prosecution with the express conformity of the accused or the accused moves
for provisional dismissal of the case;
b) the offended party is notified by the motion for the provisional dismissal of the
case;
c)
the court issues an order granting the motion and dismissing the case
provisionally;
d) the public prosecutor is served with a copy of the order of provisional dismissal of
the case.
Note: The express consent of the accused is necessary to bar him from
subsequently invoking double jeopardy should the prosecutor refile the case.
3. Explanation of Requisites
a) The period mentioned in Sec. 8, Rule 117 should be counted from service of the
order of dismissal on the public prosecutor.
b) Express consent of the accused may either be viva voce or in writing but it must be
unequivocal positive, direct and clear.
4. The provisionally dismissed case may be revived within the time-bar either by: (a)
refiling the Information or filing a new one for the same offense or for an offense
necessarily included therein.
5. When the information is refiled or a new one is filed, there is no need for a new
preliminary investigation.
Exceptions when a new preliminary investigation is necessary:
a) if the original witnesses are no longer available and new ones appear.
b) new accused are added to the original accused for the same offense or one
necessarily included therein.
c)
d)
In this case, the accused failed to establish requisites numbers 1 and 2; no proof
that the prosecution gave its express conformity to the provisional dismissal and no
proof that the offended parties were notified of the provisional dismissal of the case.
6. The time-bar cannot be applied retroactively. The rule has been promulgated for the
benefit of the accused and the State. The retroactive application of the rule would
prejudice the State because it would no longer have the 2-year period to refile the case
because the same is shortened. The prosecution received the order of dismissal on
March 31, 1999. But then the new rule became effective only on Dec. 1, 2000. If one
applies the rule retroactively, then one begins counting from March 31, 1999 so that
the State would have only 1 year and 3 months to refile the case which is short of
2 years. If applied prospectively, then one begins counting on December 1, 2000
when the rule took effect and the State would have the benefit of a full 2-year term
within which to refile the case.
E. Pre-Trial (Rule 118, RCrP)
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III. EVIDENCE
(Rule 130, RRE)
A. Dead Man's Statute
Sanson v. CA, GR No. 127745, April 22, 2003
Deadman's statute means that parties to a case, their assignors or persons in whose behalf a
case is prosecuted are prohibited from testifying as to a conversation or transaction between the
deceased and a third person, if they took no active part therein. What is prohibited in a testimonial
evidence upon a claim which arose before the death of the deceased. The incompetency is
confined to the giving of testimony.
B. Judicial Notice (Rule 129, RRE)
G. Santos v. People, G.R. No. 147615, Jan. 20, 2003
Sec. 6, Rule 112, RCrP
Is a trial court bound to take judicial notice of records of the preliminary investigation
which are found in the records of the case?
In this case, the accused complained that the court did not take into consideration the
dismissal of the complaint against him by the municipal trial court which preliminarily investigated
the case as well as the provincial prosecutor.
Answer: Unless the said records were offered in evidence, the trial court is not duty
bound to take judicial notice of them. In legal contemplation such records are not parts of the
records of the case before the court.
RES JUDICATA
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 110203
May 9, 2001
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"WHEREFORE, the order appealed from is hereby REVERSED and SET ASIDE and Civil
Case No. 84-24513 for annulment and damages is hereby reinstated. Let the records thereof be
remanded to the court a quo for further proceedings. No costs."2
Also challenged is the May 11, 1993 CA Resolution denying the Motion for Reconsideration.
The instant case originated from the Order3 dated March 14, 1985, issued by the Regional Trial Court
(RTC) of Manila (Branch 17). On the ground of res judicata, the trial court dismissed Civil Case No.
84-24513 entitled, "The Manila Manor Hotel, Inc. v. The Development Bank of the Philippines." Ruled
the RTC:
"Wherefore, the Order dated December 19, 1984 is hereby reconsidered and set aside, and this
case is DISMISSED. No special pronouncement as to cost of suit."4
The Facts
On May 21, 1984, Manila Manor Hotel, Inc. filed before the RTC of Manila a Complaint for
Annulment and Damages (Civil Case No. 84-24513) against the Development Bank of the Philippines
(DBP).5 On August 10, 1984, DBP filed a Motion to Dismiss on the ground of res judicata.6 It argued
that in Special Proceeding No. 83-17979 entitled "Gregorio Dizon, et al., v. DBP, et al.," the December
8, 1983 Order7 of the RTC of Manila (Branch 33) had dismissed the legally identical action for failure
to prosecute on the part of therein plaintiffs (the spouses Dizon).8 This earlier civil case, a Petition for
Declaratory Relief, had been filed on June 6, 1983.9
On September 12, 1984, the RTC (Branch 17) granted the Motion to Dismiss Civil Case No. 8424513.10
On October 19, 1984, Manila Manor Hotel, Inc. filed a Motion for Reconsideration, which the trial
court11 granted on December 19, 1984, in these words:
"After due consideration of the plaintiff's motion for reconsideration dated August 4, 1984
which shows that for one reason the dismissal order dated December 8, 1983 in Civil Case No.
83-17979 could not be taken to have the effect of an adjudication upon the merit, and therefore,
res judic[a]ta will not lie, the order dated September 12, 1984 dismissing the complaint in the
instant case is hereby reconsidered and set aside."12
Subsequently, Petitioner DBP (defendant therein) filed its own Motion for Reconsideration13 of the
December 19, 1984 Order. After hearing the parties, the trial court, on March 14, 1985, set aside its
December 19, 1984 Order and, once again, dismissed Civil Case No. 84-24513.14
Ruling of the Court of Appeals
The Court of Appeals ruled that res judicata cannot bar the Manila Manor Complaint. First, it opined
that there was no identity of parties between Special Proceedings No. 83-17979 for declaratory relief
and Civil Case No. 84-24513 for annulment and damages. Second, it also held that there was no
identity of subject matter and cause of action between the two cases. It declared: "No amount of
reconciliation and/or interpretation of the allegations and prayers of the two (2) cases could justify a
conclusion that the Special Proceedings (No. 83-17979) for declaratory relief under Rule 64 of the
Rules of Court, which merely seeks a declaration of the rights and duties of the Dizon spouses and the
DBP under the mortgage contract and Presidential Decree No. 385, apparently x x x non-adversarial
proceedings and the Civil Case for annulment and damages, a highly contentious [case] are one and
identical to the other." It added that the evidence that would sustain the civil case was "not necessarily
the same evidence that would have been presented in the Special Proceedings for declaratory relief had
[the latter] not been dismissed on a technicality."
Hence, this Petition.15
The Issues
Petitioner submits the following grounds for reversing the assailed CA Decision:
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"I
Whether or not the Respondent Court abused its discretion when it whimsically and
capriciously disregarded its earlier finding that there [was] here a commingling of personalities
of the spouses (Gregorio & Luz Dizon) and the Manila Manor Hotel, Inc. x x x[, a] finding
[that] made possible the allowance of an otherwise filed-out-of-time Appellant's Brief.
"II
Whether or not the Respondent Court erred when it said that there [was] no identity of parties
in the instant case.
"III
Whether or not the Respondent Court erred when it said that there [was] no identity of cause of
action in the instant case.
"IV
Whether or not the Respondent Court erred in its appreciation and application of the cases it
cited in its questioned decision."16
In the main, petitioner asks the Court to determine whether res judicata is a bar to the complaint filed
by Manila Manor Hotel in Civil Case No. 84-24513.
The Court's Ruling
The Petition is meritorious.
Main Issue:
Res Judicata
Res judicata or bar by prior judgment is a doctrine which holds that a matter that has been adjudicated
by a court of competent jurisdiction must be deemed to have been finally and conclusively settled if it
arises in any subsequent litigation between the same parties and for the same cause.17 Thus, "[a] final
judgment on the merits rendered by a court of competent jurisdiction is conclusive as to the rights of
the parties and their privies and constitutes an absolute bar to subsequent actions involving the same
claim, demand, or cause of action."18 Res judicata is based on the ground that "the party to be affected,
or some other with whom he is in privity, has litigated the same matter in a former action in a court of
competent jurisdiction, and should not be permitted to litigate it again."19
It frees the parties from undergoing all over again the rigors of unnecessary suits and repetitive trials.
At the same time, it prevents the clogging of court dockets. Equally important, it stabilizes rights and
promotes the rule of law.
For the doctrine to apply, four requisites must be met: (1) the former judgment or order must be final;
(2) it must be a judgment or an order on the merits; (3) it must have been rendered by a court having
jurisdiction over the subject matter and the parties; and (4) there must be, between the first and the
second actions, identity of parties, of subject matter and of cause of action.20
We believe that all four requisites have been satisfied in the present case.
First Requisite:
Finality of the RTC Order
The December 8, 1983 Order issued by the RTC of Manila (Branch 33) dismissing Special
Proceedings No. 83-17979 was a final order. As explained in De Ocampo v. Republic:
"An order is deemed final when it finally disposes of the pending action so that nothing more
can be done with it in the lower court (Mejia v. Alimorong, 4 Phil. 572; Insular Government v.
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Roman Catholic Bishop of Nueva Segovia, 17 Phil. 487; People v. Macaraig, 54 Phil. 904). In
other words, a final order is that which gives an end to the litigation (Olsen & Co. v. Olsen, 48
Phil. 238). The test to ascertain whether an order is interlocutory or final is: does it leave
something to be done in the trial court with respect to the merits of the case? If it does, it is
interlocutory; if it does not, it is final. (Moran, Comments on the Rules of Court, Vol. 1, 3rd ed.
pp. 806-807). A final order is that which disposes of the whole subject-matter or terminates the
particular proceedings or action, leaving nothing to be done but to enforce by execution what
has been determined (2 Am Jur., section 22, pp. 861-862). Reyes v. De Leon, G.R. No. L-3720,
June 24, 1952)."21
An order of dismissal of a complaint is a final disposition because, after its issuance, nothing else need
be done by the trial court in respect to the merits of the case.
Second Requisite:
Judgment on the Merits
Petitioner contends that the December 8, 1983 Order had the effect of an adjudication upon the merits.
We agree. Section 3, Rule 17 of the Rules of Court22 in effect at the time, provided:
"SEC. 3. Failure to prosecute. -- If plaintiff fails to appear at the time of the trial, or to
prosecute his action for an unreasonable length of time, or to comply with these rules or any
order of the court, the action may be dismissed upon motion of the defendant or upon the
court's own motion. This dismissal shall have the effect of an adjudication upon the merits,
unless otherwise provided by court." (emphasis supplied)
Because the trial judge did not state that the dismissal was without prejudice, it is therefore clear,
following the above-mentioned provision, that the Order was an adjudication upon the merits.
Third Requisite:
Court of Competent Jurisdiction
The RTC of Manila (Branch 33), which issued the December 8, 1983 Order of dismissal, had
jurisdiction to hear and decide the Petition for Declaratory Relief23 filed by the spouses Dizon. Ergo, it
also has the power to order the dismissal of the action when warranted by the circumstances.
Fourth Requisite:
Identity of Parties, Subject Matter and Cause of Action
In Special Proceedings No. 83-17979, the petitioners were Spouses Gregorio V. Dizon and Luz
Mojares-Dizon, while the respondents were the Development Bank of the Philippines and the City
Sheriff of Manila. The subject matter was the mortgage contract executed by the Dizon spouses and the
DBP for the construction of the Manila Manor Hotel. The cause of action was the declaration of the
rights and duties of petitioners and respondents under Presidential Decree No. 385 and the said
mortgage contracts.
In Civil Case No. 84-24513, the litigants were the Manila Manor Hotel, Inc. as the plaintiff and the
DBP as the defendant. The subject matter was the validity of the extrajudicial foreclosure of the
properties mortgaged as security for the loan to build the Manila Manor Hotel. The cause of action was
the annulment of the sale at public auction of the mortgaged properties and the consequent nullity of
the certificate of sale issued by the sheriff in favor of the defendant.
We believe that there is an identity of parties, subject matter, and cause of action between the Special
Proceedings (first case) and the Civil Action (second case). Although the parties to the two civil cases
are not exactly the same, we believe that there is substantial identity to warrant the application of res
judicata. In Republic v. Court of Appeals, the Court stressed that substantial identity of parties was
enough, as follows:
"For purposes of res judicata, only substantial identity is required and not absolute identity.
Parties in both cases need not be physically identical provided that there is privity between the
parties or their successors-in-interest subsequent to the commencement of the previous cause of
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action, litigating for the same thing, title or capacity. The Court of Appeals correctly found in
our view, that since all the aforecited cases were ultimately in the interest of these 'small
fishermen,' there is privity of interest in all the cases."24 (citations omitted)
The Dizon spouses filed the first case (1) to seek a declaration of their rights under the mortgage
contract in view of their inability to meet the amortization and (2) to enjoin the foreclosure of the
mortgaged properties of the Manila Manor Hotel, Inc. In its September 27, 1990 Resolution,25 the CA
already made a categorical factual finding that "the Manila Manor Hotel Inc. is owned and controlled
by the Spouses Gregorio and Luz Dizon, it being a family corporation, with Gregorio as President."26
Hence, while the second case was filed directly by the Manila Manor Hotel, Inc. in order to annul the
foreclosure sale of its mortgaged properties, it is clear that the interests sought to be protected in both
actions pertained to the same parties, regardless of their appellation. No amount of verbal legerdemain
can conceal that fact.1wphi1.nt
It is also clear that in both cases, the same subject matter is involved -- the sale at public auction of the
Manila Manor Hotel in connection with the mortgage contract.
We also hold that there is identity of the cause of action. To determine the presence of identity of cause
of action, the ultimate test is to consider whether the same evidence would sustain the cause of action
in both the first and the second cases.27 A careful review of the pleadings and other records shows that
the same evidence in the declaratory relief will have to be reexamined to support the cause of action in
the annulment case.
In the Petition for Declaratory Relief, herein respondents alleged that they could not meet the loan
amortizations; that DBP had not acted on their application for restructuring; and that petitioner had
been served notice of sale on extrajudicial foreclosure, without prior notification from DBP. The same
allegations were repeated, albeit differently worded, in the Complaint for Annulment. The objectives of
the two actions, however, were the same to assail the foreclosure sale. Hence, in the special
proceedings for declaratory relief, herein respondents prayed that the trial court enjoin the foreclosure
proceedings and declare their rights and duties under the mortgage contract. In the civil action, they
prayed for the annulment of the foreclosure sale. The two cases are different only in the form of action.
But as the Court has held, "the employment of two different forms of action does not enable one to
escape the operation of the principle that one and the same cause of action shall not be twice
litigated."28
In sum, we hold that all the requisites of res judicata are present in this case.
Indeed, respondents contend that petitioner did not comply with the procedural legal requirements
when it foreclosed extrajudicially the properties mortgaged in its favor. We are not persuaded. As can
be gleaned from the pleadings and other records of the instant case, petitioner complied with the
requirements set by RA No. 3135 ("An Act to Regulate the Sale of Property Under Special Powers
Inserted in or Annexed to Real-Estate Mortgages") when it sold the mortgaged properties at public
auction.
The City Sheriff of Manila served on the Dizon spouses Notice for the extrajudicial foreclosure of the
mortgaged properties. In fact, two Notices were served on them: the first was sometime in April, 1983;
and the second, on May 4, 1983.
The auction sale scheduled on June 15, 1983 at 10:00 a.m. did not take place, because the spouses were
able to get a Temporary Restraining Order (TRO). The sale, however, eventually pushed through after
the lapse of the TRO.
Instead of complying with the procedure provided in paragraph 2, Section 1 of PD No. 385, the Dizon
spouses29 allowed the TRO to lapse or be dissolved upon their failure to liquidate the remaining
balance of their loan; at the time, they only paid for the outstanding arrearages, interests and other
charges thereon.
Worse, the Dizon spouses allowed the case to be dismissed on December 8, 1983, when they did not
appear during the scheduled trial on that said date. The Order of dismissal became final and executory
when they failed to appeal. The inevitable consequence of such inadvertence, which private
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respondents find hard to accept, was that the Order became final and executory. As such, it constituted
a bar to the filing of the subsequent civil action.
WHEREFORE, the Petition is GRANTED and the assailed Decision of the Court of Appeals is
REVERSED; the RTC Order of March 14, 1985 is REINSTATED.
SO ORDERED.
Melo, Vitug, Gonzaga-Reyes, and Sandoval-Gutierrez, JJ., concur.
Footnotes:
1
Penned by Justice Arturo B. Buena (Division chairman and now a member of this Court) and
concurred in by Justices Asaali S. Isnani and Eduardo G. Montenegro, members.
2
Assailed RTC Order dated March 14, 1985, p. 3; rollo, p. 97; records, p. 83.
Order dated December 8, 1983; records, p. 34. In its Motion to Dismiss the Complaint filed on
August 10, 1984, petitioner mistakenly wrote the date December 8, 1984 instead of the correct
date, which was December 8, 1983. This error was repeated all the way to the appellate court.
8
In the aforesaid Order, the dismissal is worded as follows: "For failure of the parties to appear
showing their lack of interest to prosecute and to defend their case, the above-entitled case is
hereby ordered dismissed without pronouncement as to costs."
9
10
Records, p. 42.
11
12
Records, p. 63.
13
14
15
To eliminate its backlog, the Court on February 27, 2001 resolved to redistribute longpending cases to justices who had none, and who were thus tasked to prioritize these old cases.
Consequently, this case was raffled to the ponente for study and report.
16
Petition for Review, pp. 11-12; rollo, pp. 29-30. Upper case used in the original.
17
Gosnell v. Webb, 66 CA2d 518, 521, 152 P2d 463 (1944); Poochigian v. Layne, 120 CA2d
757, 261 P2d 738 (1953).
18
Republic v. Court of Appeals, 324 SCRA 560, 565, February 3, 2000, per Quisumbing, J.
19
Page
23
20
Esperas v. Court of Appeals, GR No. 121182, October 2, 2000; Republic v. Court of Appeals,
supra; Ayala Land, Inc. v. Valisno, 324 SCRA 522, 531-532, February 2, 2000; Van Ngiah v.
Rodriguez, 324 SCRA 217, 220-221, January 31, 2000; Pagsisihan v. Court of Appeals, 95
SCRA 540, 545, January28, 1980; Vda. de Nator v. Court of Industrial Relations, 4 SCRA 727,
733, March 30, 1962.
21
9 SCRA 440, 443, October 31, 1963, per Bautista Angelo, J.; quoted in Diesel Construction
Company, Inc., v. Jollibee Foods Corp., 323 SCRA 844, 854, January 28, 2000.
22
At the time the December 8, 1983 Order was issued, the governing rules were the 1964 Rules
of Court. These rules on civil procedure were amended by the 1997 Revised Rules of Civil
Procedure.
Section 3, Rule 17 of the 1997 Revised Rules of Civil Procedure amended the abovequoted provision as follows: "SEC. 3. Dismissal due to fault of plaintiff. -- If, for no
justifiable cause, the plaintiff fails to appear on the date of the presentation of his
evidence in chief on the complaint, or to prosecute his action for an unreasonable length
of time, or to comply with these Rules or any order of the court, the complaint may be
dismissed upon motion of the defendant or upon the court's own motion, without
prejudice to the right of the defendant to prosecute his counterclaim in the same or in a
separate action. This dismissal shall have the effect of an adjudication upon the merits,
unless otherwise declared by the court."
23
Paragraph 1, Section 1, Rule 63 of the 1997 Rules of Civil Procedure provides who and
where to file a petition for declaratory relief, to wit: "SEC. 1. Who may file petition. -- Any
person interested under a deed, will, contract or other written instrument, whose rights are
affected by a statute, executive order or regulation, ordinance, or any other governmental
regulation may, before breach or violation thereof, bring an action in the appropriate Regional
Trial Court to determine any question of construction or validity arising, and for a declaration
of his rights or duties, thereunder."
Prior to the 1997 Rules, the filing of a petition for declaratory relief was governed by
paragraph 1, Section 1, Rule 64 of the Rules of Court, to wit: "SEC. 1. Who may file
petition. -- Any person interested under a deed, will, contract or other written
instrument, whose rights are affected by a statute, executive order or regulation, may,
before breach or violation thereof, bring an action to determine any question of
construction or validity arising under the instrument or statute and for a declaration of
his rights or duties, thereunder."
24
Supra, 567.
25
Written by Justice Venancio D. Aldecoa Jr., with the concurrence of Justices Gloria C. Paras
(Division chairman) and Regina G. Ordoez-Benitez.
26
CA Resolution dated September 27, 1990, p. 2; rollo, p. 166. See also CA Records, p. 270.
27
Esperas v. Court of Appeals, supra, citing Bachrach Corporation v. Court of Appeals, 296
SCRA 487, 494, September 25, 1998.
28
Yusingco v. Ong Hing Lian, 42 SCRA 589, December 24, 1971, per Makasiar, J. See also
Villanueva v. CA, 285 SCRA 180, January 28, 1998; Rasay-Lahoz v. Leonor, 38 SCRA 47,
March 23, 1971.
29
Section 2 of PD No. 385, which took effect in 1974, provides: "No restraining order,
temporary or permanent injunction shall be issued by the court against any government
financial institution in any action taken by such institution in compliance with the mandatory
foreclosure provided in Section 1 hereof, whether such restraining order, temporary or
permanent injunction is sought by the borrower(s) or any third party or parties, except after due
hearing in which it is established by the borrower and admitted by the government financial
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24
institution concerned that twenty percent (20%) of the outstanding arrearages has been paid
after the filing of foreclosure proceedings.
In case a restraining order or injunction is issued the borrower shall nevertheless be
legally obligated to liquidate the remaining balance of the arrearages, paying ten percent
(10%) of the arrearages outstanding as of the time of foreclosure, plus interest and other
charges, on every succeeding thirtieth (30th) day after the issuance of such restraining order or
injunction until the entire arrearages have been liquidated. These shall be in addition to the
payment of amortizations currently maturing. The restraining order or injunction shall
automatically be dissolved should the borrower fail to make any of the above-mentioned
payments on due dates, and no restraining order or injunction shall be issued thereafter. This
shall be without prejudice to the exercise by the government financial institutions of such rights
and/or remedies available to them under their respective charters and their respective contracts
with their debtors, nor should this provision be construed as restricting the government
financial institutions concerned from approving, solely at its own discretion, any restructuring,
recapitalization, or any other arrangement that would place the entire account on a current
basis, provided, however, that at least twenty (20%) of the arrearages outstanding at the time of
the foreclosure is paid.
All restraining orders and injunctions existing as of the date of this Decree on
foreclosure proceedings filed by said government financial institutions shall be considered
lifted unless finally resolved by the court within (60) days from date hereof." (emphasis
supplied)