Cause of Action

G.R. No.
175151 September 21, 2011
TOBIAS SELGA and CEFERINA GARANCHO SELGA, Petitioners,

vs.
SONY ENTIERRO BRAR, represented by her Attorney-in-Fact MARINA T. ENTIERRO, Respondent.
DECISION
LEONARDO-DE CASTRO, J.:
Before Us is a Petition for Review under Rule 45 of the Rules of Court of the Decision1 dated May 31, 2006 and Resolution2 dated
September 28, 2006 of the Court Appeals in CA-G.R. CV No. 72987, which reversed the Decision3 dated July 27, 2001 of Branch
56, Regional Trial Court (RTC) of Himamaylan City, Negros Occidental (RTC-Branch 56), in Civil Case No. 573 for Legal
Redemption with Damages.
The following facts are not disputed:
Francisco Entierro (Francisco) died intestate on March 7, 1979, and left behind a parcel of land, identified as Lot 1138-A, located in
Himamaylan City, Negros Occidental, with an area of 39,577 square meters, and covered by Transfer Certificate of Title (TCT) No.
T-10273 in his name (subject property).
On May 15, 1985, Francisco’s spouse, Basilia Tabile (Basilia), and legitimate children, Esteban, Herminia, Elma, Percival, and
Gilda, all surnamed Entierro (collectively referred to as Basilia, et al.), executed a Deed of Sale with Declaration of Heirship. In said
Deed, Basilia, et al., declared themselves to be Francisco’s only heirs who inherited the subject property; and at the same time,
sold the subject property to petitioners, spouses Tobias Selga and Ceferina Garancho Selga, for ₱120,000.00. By reason of said
sale, TCT No. T-10273 in Francisco’s name was cancelled and replaced by TCT No. T-134408 in petitioners’ names.
Seven years later, on July 10, 1992, respondent Sony Entierro Brar, represented by her sister-in-law and attorney-in-fact, Marina T.
Entierro, filed before Branch 55 of the RTC of Himamaylan City, Negros Occidental (RTC-Branch 55) a Complaint for Annulment of
Sale with Damages against petitioners, which was docketed as Civil Case No. 276. Respondent claimed that she was one of the
legitimate children of Francisco and Basilia, and that she had been preterited and illegally deprived of her rightful share and
interests in the subject property as one of Francisco’s legal heirs. Among respondent’s allegations in her Complaint was:
10. That as one of the co-heirs of the undivided portion of the questioned lot 1138-A, [herein respondent] is legally entitled to
redeem the said property from the [herein petitioners] for the price the said [petitioners] have paid her co-heirs as appearing in the
Deed of Sale with Declaration of Heirship, Annex "B."4
Respondent prayed that RTC-Branch 55 render judgment:
1. Declaring the [herein respondent] as one of the legitimate children and legal heirs of the late Francisco Entierro and is
legally entitled to inherit and share in Lot No. 1138-A of Himamaylan, which the latter had left behind upon his demise on
March 7, 1979;
2. Declaring the annulment of the Deed of Sale with Declaration of Heirship, Annex "B", because [respondent] was unduly
preterited therein, as one of the children and heirs of the late Francisco Entierro and consequently, the said document
should be ordered cancelled insofar as [respondent’s] legal share and participation over the said Lot 1138-A is concerned;
3. Ordering the [respondent] legally entitled to redeem from the [herein petitioners] the subject Lot 1138-A for the
redemption price of ₱52,000.00 as one of the co-heirs and co-owners proindiviso of the said property at the time, the
same was sold and conveyed in favor of the [petitioners] on May 15, 1985, as shown in Annex "B" hereof;
4. Ordering the [petitioners] to account to the [respondent] her share in the produce of the land in question with respect to
her legal share on said property is concerned from May 15, 1985, up to the time, that [respondent’s] legal share and
participation therefrom, shall have been ordered delivered to her;
5. Ordering the [petitioners] to pay the [respondent] the sum of ₱50,000.00 by way of attorney’s fee and to pay the costs of
this suit;
6. [Respondent] further prays for such other reliefs as may be deemed just and equitable in the premises. 5
After trial on the merits, RTC-Branch 55 rendered a Decision dated May 8, 1996.
According to RTC-Branch 55, it was duly proven that respondent is a legitimate daughter of Francisco and Basilia; a fact admitted
by petitioner Tobias Selga himself during his cross-examination. Upon Francisco’s death, half of the subject property was inherited
by his spouse, Basilia; while the other half was inherited by his children, pro-indiviso. The property relation of Francisco’s heirs as
regards the subject property was governed by the provisions on co-ownership. Basilia, et al., validly sold all their rights and
interests over the subject property to petitioners, excluding the rights and interests over the same pertaining to respondent, who did
not participate in the execution of the Deed of Sale. RTC-Branch 55 summed up its findings, thus:
The other heirs have no right to sell the share belonging to the [herein respondent]. Although this fact is known to the [herein
petitioners], the [respondent’s] share was included in the Deed of Sale by selling the entire Lot No. 1138-A. The [petitioners],
knowing that [respondent] Sony Entierro Brar was preterited during the settlement and disposition of the subject Lot No. 1138-A,
was in bad faith when he caused for the registration of the entire lot in his name. Knowing that there was a flaw in his title, an
implied trust was created with respect to that of the share belonging to respondent Sony Entierro Brar. 6
RTC-Branch 55 finally disposed:
WHEREFORE, based on the foregoing premises and considerations, the Court hereby renders judgment declaring the annulment
of the Deed of Sale with Declaration of heirship dated May 15, 1985 adjudicating ownership of Lot No. 1138-A in the name of
[herein respondent] Sony Entierro Brar being one of the legitimate heirs of spouses Francisco Entierro and Basilia Tabile one
eleventh (1/11) share and ten eleventh (10/11) share in the name of [herein petitioner] Tobias Selga married to Ceferina Garancho
and further orders the following:
1. For the relocation survey of Lot No. 1138-A to establish the definite location of the respective share of the parties, the
expenses to be borne by them proportionately to their share;
2. The Register of Deeds of the Province of Negros Occidental is hereby directed to cancel Transfer Certificate of Title No.
T-134408 and in lieu thereof issue a new transfer certificate of title in the name of Tobias Selga consisting of an area of
Thirty[-]Seven Thousand Seven Hundred Seventy[-]Eight (37,778) square meters and another new transfer certificate of
title in the name of Sony Entierro Brar consisting of an area of One Thousand Seven Hundred Ninety[-]Nine (1,799)
square meters upon submission of an approved subdivision plan;
3. For the [petitioners] to account to [respondent] her share in the produce of the land from May 15, 1985 up to the time
that [respondent’s] possession of her share of Lot No. 1138-A is restored to her; and, finally,
4. For the [petitioners] to pay [respondent] the sum of ₱50,000.00 as attorney’s fee and to pay the costs of suit. 7
Unsatisfied, respondent filed an appeal of the aforequoted judgment of RTC-Branch 55 before the Court of Appeals, where it was
docketed as CA-G.R. CV No. 9520A UDK. However, respondent subsequently moved to withdraw her appeal, which the Court of
Appeals granted in a Resolution dated June 13, 1997. The Decision dated May 8, 1996 of RTC-Branch 55 eventually attained
finality.
In a Letter dated August 11, 1997, respondent informed petitioners that she was exercising her right to redeem petitioners’ ten-
eleventh (10/11) share in the subject property, in accordance with the final and executory Decision dated May 8, 1996 of RTC-
Branch 55 in Civil Case No. 276. In their Reply-Letter dated August 20, 1997, petitioners’ counsel rejected respondent’s demand for
the following reasons:
Please be informed that your claim re redemption is devoid of complete merit.
It must be remembered that in your complaint, you pleaded redemption as one of your causes of action and even specifically
sought the same as a prayer in your complaint. However, on the basis of the decision of the Regional Trial Court, dated May 8,
1996, the court did not see fit to grant you the right of redemption.
It is the considered view of the undersigned that in line with established jurisprudence, you cannot now or in the future, exercise this
right.8
This prompted respondent to institute on January 21, 1998 a Complaint for Legal Redemption with Damages, which was docketed
as Civil Case No. 573 before RTC-Branch 56.
In their Answer with Counterclaim9 in Civil Case No. 576, petitioners invoked the defenses of res judicata and/or forum shopping,
arguing that the cause of action pleaded by respondent was among those that had already been litigated in Civil Case No. 276
before RTC-Branch 55.
In its Decision dated July 27, 2001, RTC-Branch 56 agreed with petitioners and dismissed Civil Case No. 573, ratiocinating that:
The primary issue to be resolved in this case is whether or not the present action is barred by res judicata in view of the finality of
the decision in Civil Case No. 276 involving the same parties herein. Although the prior case was entitled annulment of sale with
damages, yet, the averments in the complaint and the reliefs sought for included the legal redemption of Lot 1138-A, which is the
subject of the present action, particularly paragraph 10 of the complaint and paragraph 3 of the prayer therein which were earlier
quoted. The elements of res judicata are (1) the judgment bring sought to bar the new action must be final; (2) the decision must
have been rendered by a court having jurisdiction over the subject matter and the parties; (3) the disposition of the case must be
based on a judgment or order on the merits; and (4) there must be identity of parties, subject matter and causes of action as
between the prior and the subsequent actions. Clearly, these elements are present. It is an elementary rule that the nature of a
cause of action is determined by the facts alleged in the complaint as constituting a cause of action. There is, therefore, identity of
parties, subject matter and cause of action between the two (2) cases.
Since the decision in Civil Case No. 276 was silent on the issue of legal redemption, it can be inferred therefrom that the court did
not see it fit to grant the same. Plaintiff should have moved for the reconsideration thereof or should have appealed to the Court of
Appeals raising this particular issue. It did not do so. Thus, the decision had become final and executory.
The filing of the present action constitutes forum shopping. "The filing of multiple suits involving the same parties for the same
cause of action, either simultaneously or successively, for the purpose of obtaining a favorable judgment amounts to forum
shopping. Only when the successive filing of the suits as part of an appeal, or a special civil action, will there be no forum shopping
because the party no longer availed of different fora but, rather, through a review of a lower tribunal’s decision or order." (Quinsay
v. CA, et al., G.R. No. 127058, Aug. 31, 2000.)10
Respondent’s appeal of the aforementioned judgment of RTC-Branch 56 was docketed as CA-G.R. CV No. 72987 before the Court
of Appeals.
On May 31, 2006, the Court of Appeals promulgated its Decision in CA-G.R. CV No. 72987, which reversed and set aside the
assailed July 27, 2001 Decision of RTC-Branch 56 in Civil Case No. 573.
The Court of Appeals held that respondent had validly exercised her right to redemption of the subject property:
As a rule, co-heir/s or co-owner/s of undivided property are required to notify in writing the other co-heir/s or co-owner/s of the
actual sale of the former’s share in the co-ownership. And, within one (1) month or 30 days from the said notice, a co-heir or co-
owner who wish to redeem such property must make a claim for the reconveyance of the same by either consignation in court or
offer to repurchase by tendering the vendor payment of the redemption money.1âwphi1
A thorough perusal of the records as well as the documentary evidences presented by both parties reveal that no written notice was
given by the heirs of Francisco Entierro to [herein respondent] regarding the sale of Lot No. 1138-A, because, [respondent] was
preterited or omitted in the inheritance during the settlement and disposition of the subject lot. She was initially not considered nor
included as heir of Francisco Entierro not until she was judicially declared one. However, despite the absence of a written notice,
[respondent], in her complaint in Civil Case No. 276, impleaded therein her claim to redeem Lot No. 1138-A sold by her co-heirs to
[herein petitioners]. Hence, by such act, [respondent] had effectively enforced her right. 11
The appellate court further ruled that Civil Case No. 573 before RTC-Branch 56 was not barred by the final judgment in Civil Case
No. 276 of RTC-Branch 55:
What had became final and conclusive in Civil Case No. 276 is only with respect to the filiation of [herein respondent] and [her] right
to inherit, but not as to [respondent’s] right to redeem the property sold by her co-heirs.
We disagree with the court a quo’s holding which provides, to wit: "Since the decision in Civil Case No. 276 was silent on the issue
of legal redemption, it can be inferred therefrom that the court did not see it fit to grant the same."
Right of legal redemption is a statutory right provided by law – as long as the redemptioner possesses all the essential requisites
and comply with the requirements, such right need not be judicially declared in order for it to be enforced. The role of the court is
only to ascertain whether the essential requisites and requirements are properly complied with. As the right of redemption is
inherent to every co-heir or co-owner, denial of the said right must be explicitly and expressly provided and justified by the court
and not by mere silence only. Silence of the decision in Civil Case No. 276 on the issue of [respondent’s] right of redemption does
not mean that the same was denied. Only the issues of filiation and the validity of the Deed of Sale with Declaration of Heirship
were judicially determined by the lower court on the said case. Hence, in the instant case, this Court may rule upon the issue of
redemption.12
The Court of Appeals decreed in the end:
WHEREFORE, premises considered, the assailed Decision of the Regional Trial Court of Himamaylan City, Negros Occidental,
Branch 56 dated July 27, 2001 is hereby REVERSED and SET ASIDE and a new one is hereby ENTERED by recognizing [herein
respondent’s] legal right to redeem Lot No. 1138-A of Himamaylan Cadastre, Negros Occidental from [herein petitioners].
[Respondent] is hereby given thirty (30) days from the finality of this Decision within which to exercise his right of redemption over
Lot No. 1138-A by reimbursing [petitioners] the price of the sale in the amount of ₱120,000.00 plus the total value of the
improvements, if any, on the subject lot based on the current fair market value.
Failure of [respondent] to redeem the property within the period herein provided shall vest [petitioners] absolute right over subject
property.13
Petitioners now come before this Court via the instant Petition for Review, insisting that respondent’s right to redemption of the
subject property from petitioners was among the causes of action already litigated in Civil Case No. 276 before RTC-Branch 55;
and the very same cause of action between the same parties involving the same subject matter was merely duplicated in Civil Case
No. 573 before RTC-Branch 56. Thus, the prior final judgment rendered in Civil Case No. 276 already barred Civil Case No. 573.
Respondent counters that Civil Case No. 573 before RTC-Branch 56 involving her legal right to redeem the subject property from
petitioners cannot be deemed barred by the final judgment in Civil Case No. 276 rendered by RTC-Branch 55 because said issue
was not explicitly ruled upon in the latter case.
We find merit in the instant Petition.
Res judicata means "a matter adjudged; a thing judicially acted upon or decided; a thing or matter settled by judgment." It lays the
rule that an existing final judgment or decree rendered on the merits, without fraud or collusion, by a court of competent jurisdiction,
upon any matter within its jurisdiction, is conclusive of the rights of the parties or their privies, in all other actions or suits in the
same or any other judicial tribunal of concurrent jurisdiction on the points and matters in issue in the first suit. 14
It must be remembered that it is to the interest of the public that there should be an end to litigation by the parties over a subject
fully and fairly adjudicated. The doctrine of res judicata is a rule that pervades every well-regulated system of jurisprudence and is
founded upon two grounds embodied in various maxims of the common law, namely: (1) public policy and necessity, which dictates
that it would be in the interest of the State that there should be an end to litigation — republicae ut sit litium; and (2) the hardship on
the individual that he should be vexed twice for the same cause — nemo debet bis vexari pro una et eadem causa. A contrary
doctrine would subject public peace and quiet to the will and neglect of individuals and prefer the gratification of the litigious
disposition on the part of suitors to the preservation of public tranquility and happiness. 15
Res judicata has two concepts. The first is bar by prior judgment under Rule 39, Section 47(b), and the second is conclusiveness of
judgment under Rule 39, Section 47(c).16 These concepts differ as to the extent of the effect of a judgment or final order as follows:
SEC. 47. Effect of judgments or final orders. – The effect of a judgment or final order rendered by a court of the Philippines, having
jurisdiction to pronounce the judgment or final order, may be as follows:
xxxx
(b) In other cases, the judgment or final order is, with respect to the matter directly adjudged or as to any other matter that
could have been raised in relation thereto, conclusive between the parties and their successors in interest by title
subsequent to the commencement of the action or special proceeding, litigating for the same thing and under the same
title and in the same capacity; and
(c) In any other litigation between the same parties or their successors in interest, that only is deemed to have been
adjudged in a former judgment or final order which appears upon its face to have been so adjudged, or which was actually
and necessarily included therein or necessary thereto.
Jurisprudence taught us well that res judicata under the first concept or as a bar against the prosecution of a second action exists
when there is identity of parties, subject matter and cause of action in the first and second actions. The judgment in the first action
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 demand, but as to any other admissible matter which might have
been offered for that purpose and of all matters that could have been adjudged in that case. In contrast, res judicata under the
second concept or estoppel by judgment exists when there is identity of parties and subject matter but the causes of action are
completely distinct. The first judgment is conclusive only as to those matters actually and directly controverted and determined and
not as to matters merely involved herein.17
The case at bar satisfies the four essential requisites of res judicata under the first concept, bar by prior judgment, viz:
(a) finality of the former judgment;
(b) the court which rendered it had jurisdiction over the subject matter and the parties;
(c) it must be a judgment on the merits; and
(d) there must be, between the first and second actions, identity of parties, subject matter and causes of action. 18
It is not disputed that the Decision dated May 8, 1996 of RTC-Branch 55 in Civil Case No. 276 had become final and executory.
Petitioners no longer appealed the said decision, while respondent withdrew her appeal of the same before the Court of Appeals.
There is also no question that RTC-Branch 55 had jurisdiction over the subject matter and parties in Civil Case No. 276, and that its
Decision dated May 8, 1996 was a judgment on the merits, i.e., one rendered after a consideration of the evidence or stipulations
submitted by the parties at the trial of the case.19
Controversy herein arises from the fourth requirement: the identity of parties, subject matter and, particularly, the causes of action
between Civil Case No. 276 and Civil Case No. 573.
There is identity of parties. Civil Case No. 276 and Civil Case No. 573 were both instituted by respondent against petitioners.
There is also identity of subject matter. Civil Case No. 276 and Civil Case No. 573 both involved respondent’s rights and interests
over the subject property as Francisco’s legitimate child and compulsory heir.
Finally, there is identity of causes of action.
Section 2, Rule 2 of the Rules of Court defines a cause of action as "the act or omission by which a party violates a right of
another." The cause of action in Civil Case No. 273 and Civil Case No. 576 is the sale of the entire subject property by Basilia, et
al., to petitioners without respondent’s knowledge and consent, hence, depriving respondent of her rights and interests over her
pro-indiviso share in the subject property as a co-heir and co-owner. The annulment of the sale of respondent’s share in the subject
property, the legal redemption by respondent of her co-heirs’ share sold to petitioners, and the claim for damages should not be
mistaken to be the causes of action, but they were the remedies and reliefs prayed for by the respondent to redress the wrong
allegedly committed against her.
The allegations in respondent’s Complaint in Civil Case No. 573 initially give the impression that the cause of action therein was
petitioners’ refusal to heed respondent’s demand to redeem petitioners’ ten-eleventh (10/11) share in the subject property. But a
closer study of said Complaint, as well as the trial proceedings before RTC-Branch 56, reveal that respondent’s right to redeem
petitioners’ ten-eleventh (10/11) share in the subject property also arose from the sale of the said subject property to petitioners by
respondent’s co-heirs and co-owners, alleged to be without respondent’s knowledge or consent – the very same cause of action at
the crux of Civil Case No. 276.
In their Memorandum20 filed on September 3, 2007 before this Court, respondent invoked Articles 1088 and 1620 of the Civil Code
of the Philippines in support of their right to redeem the subject property. The said provisions state:
Art. 1088. Should any of the heirs sell his hereditary rights to a stranger before the partition, any or all of the co-heirs may be
subrogated to the rights of the purchaser by reimbursing him for the price of the sale, provided they do so within the period of one
month from the time they were notified in writing of the sale by the vendor.
xxxx
Art. 1620. A co-owner of a thing may exercise the right of redemption in case the shares of all the other co-owners or of any of
them, are sold to a third person. If the price of the alienation is grossly excessive, the redemptioner shall pay only a reasonable
one.
Should two or more co-owners desire to exercise the right of redemption, they may only do so in proportion to the share they may
respectively have in the thing owned in common.
In her Complaint in Civil Case No. 276, respondent already alleged her right to redemption and prayed, among others, the RTC-
Branch 55 to order respondent legally entitled to redeem the subject property for the price of ₱52,000.00. The Decision dated May
8, 1996 of the RTC-Branch 55 neither discussed respondent’s right to redemption nor ordered in its decretal portion for petitioners
to accept respondent’s offer to redeem the subject property. In consonance with the provisions of Rule 39, Section 47 of the Rules
of Court cited above, we hold that all the matters within the issues raised in Civil Case No. 276 were laid before RTC-Branch 55
and passed upon by it. Resultantly, the silence of the Decision dated May 8, 1996 in Civil Case No. 276 on respondent’s right to
redemption invoked by the latter does not mean that RTC-Branch 55 did not take cognizance of the same, but rather, that RTC-
Branch 55 did not deem respondent entitled to said right.
Regardless of whether or not RTC-Branch 55 erred in not ordering the redemption by respondent of the subject property in the
Decision dated May 8, 1996 in Civil Case No. 276, said judgment can no longer be reviewed or corrected by RTC-Branch 56 in
Civil Case No. 573. Any error committed by RTC-Branch 55 in the Decision dated May 8, 1996 in Civil Case No. 276 could only be
reviewed or corrected on appeal. Although respondent initially filed an appeal of said judgment before the Court of Appeals, she
eventually filed a motion to withdraw the same, which was granted by the appellate court. Hence, the Decision dated May 8, 1996
attained finality.
As we held in Ram’s Studio and Photographic Equipment, Inc. v. Court of Appeals, 21 a judgment which has acquired finality
becomes immutable and unalterable, hence, may no longer be modified in any respect except to correct clerical errors or mistakes,
all the issues between the parties being deemed resolved and laid to rest. We added in Manila Electric Company v. Philippine
Consumers Foundation, Inc.22 that a final and executory judgment or order can no longer be disturbed or reopened no matter how
erroneous it may be. Although judicial determinations are not infallible, judicial error should be corrected through appeals, not
through repeated suits on the same claim.
We rationalized in Navarro v. Metropolitan Bank & Trust Company23 the doctrine of immutability of a final judgment as follows:
No other procedural law principle is indeed more settled than that once a judgment becomes final, it is no longer subject to change,
revision, amendment or reversal, except only for correction of clerical errors, or the making of nunc pro tunc entries which cause no
prejudice to any party, or where the judgment itself is void. The underlying reason for the rule is two-fold: (1) to avoid delay in the
administration of justice and thus make orderly the discharge of judicial business, and (2) to put judicial controversies to an end, at
the risk of occasional errors, inasmuch as controversies cannot be allowed to drag on indefinitely and the rights and obligation of
every litigant must not hang in suspense for an indefinite period of time. As the Court declared in Yau v. Silverio:
Litigation must end and terminate sometime and somewhere, and it is essential to an effective and efficient administration of justice
that, once a judgment has become final, the winning party be, not through a mere subterfuge, deprived of the fruits of the verdict.
Courts must therefore guard against any scheme calculated to bring about that result. Constituted as they are to put an end to
controversies, courts should frown upon any attempt to prolong them.
Indeed, just as a losing party has the right to file an appeal within the prescribed period, the winning party also has the correlative
right to enjoy the finality of the resolution of his case by the execution and satisfaction of the judgment. Any attempt to thwart this
rigid rule and deny the prevailing litigant his right to savor the fruit of his victory must immediately be struck down. Thus, in Heirs of
Wenceslao Samper v. Reciproco-Noble, we had occasion to emphasize the significance of this rule, to wit:
It is an important fundamental principle in our Judicial system that every litigation must come to an end x x x Access to the courts is
guaranteed. But there must be a limit thereto. Once a litigant's rights have been adjudicated in a valid final judgment of a competent
court, he should not be granted an unbridled license to come back for another try. The prevailing party should not be harassed by
subsequent suits. For, if endless litigations were to be encouraged, then unscrupulous litigants will multiply in number to the
detriment of the administration of justice.24
Exceptions to the immutability of final judgment are allowed only under the most extraordinary of circumstances. The instant case
cannot be considered an exception especially when respondent had the opportunity to appeal the Decision dated May 8, 1996 of
RTC-Branch 55 in Civil Case No. 276, but by her own action, desisted from pursuing the same.
Therefore, Civil Case No. 573 before RTC-Branch 56 should be dismissed, being barred by res judicata, given the final and
executory Decision dated May 8, 1996 of RTC-Branch 55 in Civil Case No. 276. We stress that res judicata, in the concept of bar
by prior judgment, renders the judgment or final order conclusive between the parties and their privies, not just with respect to a
matter directly adjudged, but also any other matter that could have been raised in relation thereto.
WHEREFORE, the instant Petition is hereby GRANTED. The Decision dated May 31, 2006 and Resolution dated September 28,
2006 of the Court Appeals in CA-G.R. CV No. 72987 are SET ASIDE. The Decision dated July 27, 2001 of Branch 56 of the
Regional Trial Court of Himamaylan City, Negros Occidental, dismissing Civil Case No. 573, is REINSTATED.
SO ORDERED.
SECOND DIVISION
G.R. No. 189121 July 31, 2013
AMELIA GARCIA-QUIAZON, JENNETH QUIAZON and MARIA JENNIFER QUIAZON, Petitioners,

vs.
MA. LOURDES BELEN, for and in behalf of MARIA LOURDES ELISE QUIAZON, Respondent.
DECISION
PEREZ, J.:
This is a Petition for Review on Certiorari filed pursuant to Rule 45 of the Revised Rules of Court, primarily assailing the 28
November 2008 Decision rendered by the Ninth Division of the Court of Appeals in CA-G.R. CV No. 88589,1the decretal portion of
which states:
WHEREFORE, premises considered, the appeal is hereby DENIED. The assailed Decision dated March 11, 2005, and the Order
dated March 24, 2006 of the Regional Trial Court, Branch 275, Las Piñas City are AFFIRMED in toto. 2
The Facts
This case started as a Petition for Letters of Administration of the Estate of Eliseo Quiazon (Eliseo), filed by herein respondents
who are Eliseo’s common-law wife and daughter. The petition was opposed by herein petitioners Amelia Garcia-Quaizon (Amelia)
to whom Eliseo was married. Amelia was joined by her children, Jenneth Quiazon (Jenneth) and Maria Jennifer Quiazon (Jennifer).
Eliseo died intestate on 12 December 1992.
On 12 September 1994, Maria Lourdes Elise Quiazon (Elise), represented by her mother, Ma. Lourdes Belen (Lourdes), filed a
Petition for Letters of Administration before the Regional Trial Court (RTC) of Las Piñas City. 3 In her Petition docketed as SP Proc.
No. M-3957, Elise claims that she is the natural child of Eliseo having been conceived and born at the time when her parents were
both capacitated to marry each other. Insisting on the legal capacity of Eliseo and Lourdes to marry, Elise impugned the validity of
Eliseo’s marriage to Amelia by claiming that it was bigamous for having been contracted during the subsistence of the latter’s
marriage with one Filipito Sandico (Filipito). To prove her filiation to the decedent, Elise, among others, attached to the Petition for
Letters of Administration her Certificate of Live Birth 4 signed by Eliseo as her father. In the same petition, it was alleged that Eliseo
left real properties worth ₱2,040,000.00 and personal properties worth ₱2,100,000.00. In order to preserve the estate of Eliseo and
to prevent the dissipation of its value, Elise sought her appointment as administratrix of her late father’s estate.
Claiming that the venue of the petition was improperly laid, Amelia, together with her children, Jenneth and Jennifer, opposed the
issuance of the letters of administration by filing an Opposition/Motion to Dismiss. 5 The petitioners asserted that as shown by his
Death Certificate, 6 Eliseo was a resident of Capas, Tarlac and not of Las Piñas City, at the time of his death. Pursuant to Section
1, Rule 73 of the Revised Rules of Court,7 the petition for settlement of decedent’s estate should have been filed in Capas, Tarlac
and not in Las Piñas City. In addition to their claim of improper venue, the petitioners averred that there are no factual and legal
bases for Elise to be appointed administratix of Eliseo’s estate.
In a Decision8 dated 11 March 2005, the RTC directed the issuance of Letters of Administration to Elise upon posting the necessary
bond. The lower court ruled that the venue of the petition was properly laid in Las Piñas City, thereby discrediting the position taken
by the petitioners that Eliseo’s last residence was in Capas, Tarlac, as hearsay. The dispositive of the RTC decision reads:
Having attained legal age at this time and there being no showing of any disqualification or incompetence to serve as administrator,
let letters of administration over the estate of the decedent Eliseo Quiazon, therefore, be issued to petitioner, Ma. Lourdes Elise
Quiazon, after the approval by this Court of a bond in the amount of ₱100,000.00 to be posted by her. 9
On appeal, the decision of the trial court was affirmed in toto in the 28 November 2008 Decision10 rendered by the Court of Appeals
in CA-G.R.CV No. 88589. In validating the findings of the RTC, the Court of Appeals held that Elise was able to prove that Eliseo
and Lourdes lived together as husband and wife by establishing a common residence at No. 26 Everlasting Road, Phase 5, Pilar
Village, Las Piñas City, from 1975 up to the time of Eliseo’s death in 1992. For purposes of fixing the venue of the settlement of
Eliseo’s estate, the Court of Appeals upheld the conclusion reached by the RTC that the decedent was a resident of Las Piñas City.
The petitioners’ Motion for Reconsideration was denied by the Court of Appeals in its Resolution11 dated 7 August 2009.
The Issues
The petitioners now urge Us to reverse the assailed Court of Appeals Decision and Resolution on the following grounds:
I. THE COURT OF APPEALS GRAVELY ERRED IN AFFIRMING THAT ELISEO QUIAZON WAS A RESIDENT OF LAS
PIÑAS AND THEREFORE, THE PETITION FOR LETTERS OF ADMINISTRATION WAS PROPERLY FILED WITH THE
RTC OF LAS PIÑAS;
II. THE COURT OF APPEALS GRAVELY ERRED IN DECLARING THAT AMELIA GARCIA-QUIAZON WAS NOT
LEGALLY MARRIED TO ELISEO QUIAZON DUE TO PREEXISTING MARRIAGE; AND
III. THE COURT OF APPEALS OVERLOOKED THE FACT THAT ELISE QUIAZON HAS NOT SHOWN ANY INTEREST
IN THE PETITION FOR LETTERS OF ADMINISTRATION.12
The Court’s Ruling
We find the petition bereft of merit.
Under Section 1, Rule 73 of the Rules of Court, the petition for letters of administration of the estate of a decedent should be filed in
the RTC of the province where the decedent resides at the time of his death:
Sec. 1. Where estate of deceased persons settled. – If the decedent is an inhabitant of the Philippines at the time of his death,
whether a citizen or an alien, his will shall be proved, or letters of administration granted, and his estate settled, in the Court of First
Instance now Regional Trial Court in the province in which he resides at the time of his death, and if he is an inhabitant of a foreign
country, the Court of First Instance now Regional Trial Court of any province in which he had estate. The court first taking
cognizance of the settlement of the estate of a decedent, shall exercise jurisdiction to the exclusion of all other courts. The
jurisdiction assumed by a court, so far as it depends on the place of residence of the decedent, or of the location of his estate, shall
not be contested in a suit or proceeding, except in an appeal from that court, in the original case, or when the want of jurisdiction
appears on the record. (Emphasis supplied).
The term "resides" connotes ex vi termini "actual residence" as distinguished from "legal residence or domicile." This term
"resides," like the terms "residing" and "residence," is elastic and should be interpreted in the light of the object or purpose of the
statute or rule in which it is employed. In the application of venue statutes and rules – Section 1, Rule 73 of the Revised Rules of
Court is of such nature – residence rather than domicile is the significant factor.13Even where the statute uses word "domicile" still it
is construed as meaning residence and not domicile in the technical sense.14 Some cases make a distinction between the terms
"residence" and "domicile" but as generally used in statutes fixing venue, the terms are synonymous, and convey the same
meaning as the term "inhabitant."15In other words, "resides" should be viewed or understood in its popular sense, meaning, the
personal, actual or physical habitation of a person, actual residence or place of abode. 16 It signifies physical presence in a place
and actual stay thereat.17 Venue for ordinary civil actions and that for special proceedings have one and the same meaning. 18 As
thus defined, "residence," in the context of venue provisions, means nothing more than a person’s actual residence or place of
abode, provided he resides therein with continuity and consistency. 19
Viewed in light of the foregoing principles, the Court of Appeals cannot be faulted for affirming the ruling of the RTC that the venue
for the settlement of the estate of Eliseo was properly laid in Las Piñas City. It is evident from the records that during his lifetime,
Eliseo resided at No. 26 Everlasting Road, Phase 5, Pilar Village, Las Piñas City. For this reason, the venue for the settlement of
his estate may be laid in the said city.
In opposing the issuance of letters of administration, the petitioners harp on the entry in Eliseo’s Death Certificate that he is a
resident of Capas, Tarlac where they insist his estate should be settled. While the recitals in death certificates can be considered
proofs of a decedent’s residence at the time of his death, the contents thereof, however, is not binding on the courts. Both the RTC
and the Court of Appeals found that Eliseo had been living with Lourdes, deporting themselves as husband and wife, from 1972 up
to the time of his death in 1995. This finding is consistent with the fact that in 1985, Eliseo filed an action for judicial partition of
properties against Amelia before the RTC of Quezon City, Branch 106, on the ground that their marriage is void for being
bigamous.20 That Eliseo went to the extent of taking his marital feud with Amelia before the courts of law renders untenable
petitioners’ position that Eliseo spent the final days of his life in Tarlac with Amelia and her children. It disproves rather than
supports petitioners’ submission that the lower courts’ findings arose from an erroneous appreciation of the evidence on record.
Factual findings of the trial court, when affirmed by the appellate court, must be held to be conclusive and binding upon this Court. 21
Likewise unmeritorious is petitioners’ contention that the Court of Appeals erred in declaring Amelia’s marriage to Eliseo as void ab
initio. In a void marriage, it was though no marriage has taken place, thus, it cannot be the source of rights. Any interested party
may attack the marriage directly or collaterally. A void marriage can be questioned even beyond the lifetime of the parties to the
marriage.22 It must be pointed out that at the time of the celebration of the marriage of Eliseo and Amelia, the law in effect was the
Civil Code, and not the Family Code, making the ruling in Niñal v. Bayadog 23 applicable four-square to the case at hand. In Niñal,
the Court, in no uncertain terms, allowed therein petitioners to file a petition for the declaration of nullity of their father’s marriage to
therein respondent after the death of their father, by contradistinguishing void from voidable marriages, to wit:
Consequently, void marriages can be questioned even after the death of either party but voidable marriages can be assailed only
during the lifetime of the parties and not after death of either, in which case the parties and their offspring will be left as if the
marriage had been perfectly valid. That is why the action or defense for nullity is imprescriptible, unlike voidable marriages where
the action prescribes. Only the parties to a voidable marriage can assail it but any proper interested party may attack a void
marriage.24
It was emphasized in Niñal that in a void marriage, no marriage has taken place and it cannot be the source of rights, such that any
interested party may attack the marriage directly or collaterally without prescription, which may be filed even beyond the lifetime of
the parties to the marriage.25
Relevant to the foregoing, there is no doubt that Elise, whose successional rights would be prejudiced by her father’s marriage to
Amelia, may impugn the existence of such marriage even after the death of her father. The said marriage may be questioned
directly by filing an action attacking the validity thereof, or collaterally by raising it as an issue in a proceeding for the settlement of
the estate of the deceased spouse, such as in the case at bar. Ineluctably, Elise, as a compulsory heir,26 has a cause of action for
the declaration of the absolute nullity of the void marriage of Eliseo and Amelia, and the death of either party to the said marriage
does not extinguish such cause of action.
Having established the right of Elise to impugn Eliseo’s marriage to Amelia, we now proceed to determine whether or not the
decedent’s marriage to Amelia is void for being bigamous.
Contrary to the position taken by the petitioners, the existence of a previous marriage between Amelia and Filipito was sufficiently
established by no less than the Certificate of Marriage issued by the Diocese of Tarlac and signed by the officiating priest of the
Parish of San Nicolas de Tolentino in Capas, Tarlac. The said marriage certificate is a competent evidence of marriage and the
certification from the National Archive that no information relative to the said marriage exists does not diminish the probative value
of the entries therein. We take judicial notice of the fact that the first marriage was celebrated more than 50 years ago, thus, the
possibility that a record of marriage can no longer be found in the National Archive, given the interval of time, is not completely
remote. Consequently, in the absence of any showing that such marriage had been dissolved at the time Amelia and Eliseo’s
marriage was solemnized, the inescapable conclusion is that the latter marriage is bigamous and, therefore, void ab initio.27
Neither are we inclined to lend credence to the petitioners’ contention that Elise has not shown any interest in the Petition for
Letters of Administration.
Section 6, Rule 78 of the Revised Rules of Court lays down the preferred persons who are entitled to the issuance of letters of
administration, thus:
Sec. 6. When and to whom letters of administration granted. — If no executor is named in the will, or the executor or executors are
incompetent, refuse the trust, or fail to give bond, or a person dies intestate, administration shall be granted:
(a) To the surviving husband or wife, as the case may be, or next of kin, or both, in the discretion of the court, or to such
person as such surviving husband or wife, or next of kin, requests to have appointed, if competent and willing to serve;
(b) If such surviving husband or wife, as the case may be, or next of kin, or the person selected by them, be incompetent
or unwilling, or if the husband or widow, or next of kin, neglects for thirty (30) days after the death of the person to apply
for administration or to request that administration be granted to some other person, it may be granted to one or more of
the principal creditors, if competent and willing to serve;
(c) If there is no such creditor competent and willing to serve, it may be granted to such other person as the court may
select.
Upon the other hand, Section 2 of Rule 79 provides that a petition for Letters of Administration must be filed by an interested
person, thus:
Sec. 2. Contents of petition for letters of administration. — A petition for letters of administration must be filed by an interested
person and must show, so far as known to the petitioner:
(a) The jurisdictional facts;
(b) The names, ages, and residences of the heirs, and the names and residences of the creditors, of the decedent;
(c) The probable value and character of the property of the estate;
(d) The name of the person for whom letters of administration are prayed.
But no defect in the petition shall render void the issuance of letters of administration.
An "interested party," in estate proceedings, is one who would be benefited in the estate, such as an heir, or one who has a claim
against the estate, such as a creditor. Also, in estate proceedings, the phrase "next of kin" refers to those whose relationship with
the decedent Is such that they are entitled to share in the estate as distributees.28
In the instant case, Elise, as a compulsory heir who stands to be benefited by the distribution of Eliseo’s estate, is deemed to be an
interested party. With the overwhelming evidence on record produced by Elise to prove her filiation to Eliseo, the petitioners’
pounding on her lack of interest in the administration of the decedent’s estate, is just a desperate attempt to sway this Court to
reverse the findings of the Court of Appeals. Certainly, the right of Elise to be appointed administratix of the estate of Eliseo is on
good grounds. It is founded on her right as a compulsory heir, who, under the law, is entitled to her legitimate after the debts of the
estate are satisfied.29 Having a vested right in the distribution of Eliseo’s estate as one of his natural children, Elise can rightfully be
considered as an interested party within the purview of the law.
WHEREFORE, premises considered, the petition is DENIED for lack of merit. Accordingly, the Court of Appeals assailed 28
November 2008 Decision and 7 August 2009 Resolution, arc AFFIRMED in toto.
SO ORDERED.
SECOND DIVISION
G.R. No. 173783, June 17, 2015
RIVIERA GOLF CLUB, INC., Petitioner, v. CCA HOLDINGS, B.V., Respondent.
DECISION
BRION, J.:
Before the Court is the petition for review on certiorari1 filed by Riviera Golf Club, Inc. (Riviera Golf) assailing the January 11, 2006
decision2 and the July 5, 2006 resolution3 of the Court of Appeals (CA) in CA-G.R.CV No. 83824.
Background Facts
Riviera Golf, a domestic corporation, is the owner of Riviera Golf Club (Club), a 36-hole golf course and recreational facility in
Silang, Cavite. On October 11, 1996, Riviera Golf entered into a Management Agreement with CCA Holdings, B.V. (CCA
Holdings), a foreign corporation, for the management and operation of the Club.
The Management Agreement was for a period of five (5) years. Under this agreement, Riviera Golf would pay CCA Holdings a
monthly Base Management Fee of 5.5% of the Adjusted Gross Revenue equivalent to US$16,500.00 per month, adjusted to 4.5%
per month from the opening date, plus an incentive Management Fee of 10% of the Gross Operating Profit.
The parties also entered into a co-terminous Royalty Agreement that would allow Riviera Golf and the Club's developer, Armed
Forces of the Philippines' Retirement and Separation Benefits System (AFP-RSBS), to use CCA Holdings' name and facilities to
market the Club's shares. In consideration of the license to use CCA Holdings' name, Riviera Golf and AFP-RSBS will pay CCA
Holdings a gross licensing fee of 1% on all membership fees paid in the sale of shares, an additional gross licensing fee of 4% on
all club shares, and 7% on non-golf memberships sold.
Riviera Golf initially paid the agreed fees, but defaulted in its payment of the licensing fees and the reimbursement claims in
September 1997. Riviera Golf likewise failed to pay the monthly management and incentive fees in June 1999, prompting CCA
Holdings to demand the amounts due under both agreements.
On October 29, 1999, Riviera Golf sent CCA Holdings a letter informing the latter that it was pre-terminating the Management
Agreement purportedly to alleviate the financial crisis that the AFP-RSBS was experiencing. The Royalty Agreement was also
deemed pre-terminated.
CCA Holdings protested the termination of the agreement and demanded that Riviera Golf settle its unpaid management and
royalty fees. Riviera Golf however refused on the ground that CCA Holdings violated the terms of the agreement.
In April 2001, CCA Holdings filed before the Regional Trial Court (RTC), Branch 146, Makati City, a complaint for sum of money
with damages docketed as Civil Case No. 01-611 (first complaint) against Riviera Golf. During the pendency of the case, the parties
tried to extrajudicially settle their differences and executed a Compromise Agreement.
On April 25, 2002, the RTC rendered a decision4 approving the parties' Compromise Agreement. Paragraph 4 of the agreement
reads:
chanRoblesvirtualLawlibrary
4) It is understood that the execution of this compromise agreement or the payment of the aforementioned sum of money shall not
be construed as a waiver of or with prejudice to plaintiffs rights/cause of action, if any, arising from or relative to the pre-
termination of the parties' Management and Royalty Agreements by the defendant subject to whatever claims and defenses
may have relative thereto; (Emphasis supplied.)
chanroblesvirtuallawlibrary
Subsequently, or on November 22, 2002, CCA Holdings again sent a letter to Riviera Golf, this time, demanding the sum of
US$390,768.00 representing the projected net income or expected business profits it was supposed to derive for the unexpired
two-year term of the Management Agreement. As its demands went unheeded, CCA Holdings filed another complaint for sum of
money and damages docketed as Civil Case No. 03-399 (second complaint) before Branch 57 of the RTC of Makati City.
Noting that the first and second complaints involve the same parties, the same subject matter, and the same causes of action,
Riviera Golf filed on August 6, 2003, a Motion to Dismiss on the grounds of res judicata and violation of the rule against splitting of
causes of action. CCA Holdings opposed the motion contending that there is no splitting of causes of action since the two cases
are entirely independent of each other. CCA Holdings also justified its belated filing of the second complaint, arguing that the
needed financial records were in Riviera Golfs possession.
The RTC Ruling
The RTC, Branch 57, Makati City granted the motion to dismiss, holding that the first and second complaints have identical causes
of action and subject matter. Since the claims in Civil Case No. 01-611 and Civil Case No. 03-399 arose from alleged violations of
the terms and conditions of the Management and Royalty Agreements, the rules on res judicata and splitting of causes of action
apply.
The RTC also noted that CCA Holdings had every opportunity to raise the issue of pre-termination when it filed Civil Case No. 01-
611. That CCA Holdings did not do so and opted instead to reserve it for future litigation only show that it was speculating on the
results of the litigation.
The RTC likewise pointed out that the reservation clause or the "nonwaiver clause" that the parties inserted in the Compromise
Agreement was qualified by the phrase subject to whatever claims and defenses the defendant may have relative thereto. The RTC
held that the defenses that Riviera Golf could raise are not limited only to those relating to the legality of the pre-termination of the
agreements, but could also include all other claims and defenses such as res judicata and splitting of a single cause of action.
CCA Holdings appealed the dismissal of its complaint to the CA.
The CA Ruling
In its decision dated January 11, 2006, the CA set aside the order granting the motion to dismiss, and remanded the case to the
RTC for adjudication on the merits. The CA held that res judicata and splitting of a single cause of action were not committed based
on the following reasons:
First, there is no identity of causes of action in the two civil cases.
The test to determine the identity of causes of action is to ascertain whether the same evidence is necessary to sustain the two
suits. In this case, the sets of evidence in the two complaints were different.
Second, there is no splitting of a single cause of action because Riviera Golf violated separate primary rights of CCA Holdings
under the management contract.
Third, Riviera Golf recognized CCA Holdings' right to seek damages arising from or relative to the premature termination of the
Management Agreement. This view is evident from the literal interpretation of Paragraph 4 (or the "non waiver clause") of the
parties' compromise agreement.
Riviera Golf moved for the reconsideration of the decision, but the CA denied its motion in its resolution of July 5, 2006; hence, the
present recourse to us pursuant to Rule 45 of the Rules of Court.
The Petition
Riviera Golf asks the Court to set aside the CA decision, contending that the appellate court committed a grave error in not holding
that the filing of the second complaint amounted to res judicata and splitting of a single cause of action. Riviera Golf submits that
based on the allegations in the two complaints, the facts that are necessary to support the second case (Civil Case No. 03-399)
would have been sufficient to authorize recovery in the first case (Civil Case No. 01-611).
Moreover, the documentary evidence that CCA Holdings submitted to support both complaints are also the same. Thus, both civil
cases involve not only the same facts and the same subject matter, but also the same cause of action, i.e., breach of the
Management and Royalty Agreements.
Riviera Golf also argued that although there seems to be several rights violated, there is only one delict or wrong committed and
consequently, only one cause of action that should have been alleged in a single complaint. Since the alleged breach of contract
in this case was already total at the time of the filing of Civil Case No. 01-611, the filing of the second complaint for the
recovery of damages for the pre-termination of the Management and Royalty Agreements constitutes splitting a single cause of
action that is expressly prohibited by the Rules of Court.
Riviera Golf likewise disagrees with the CA's interpretation of the non-waiver clause. It argues that the phrase if any and the
condition that the causes of action are subject to whatever claims and defenses the defendant may have relative thereto in the non-
waiver clause limited its recognition of CCA Holdings' rights and causes of action. It also maintains that the filing of the motion to
dismiss based on res judicata and splitting of causes of action clearly falls within the non-waiver clause's limitation.
The Case for the Respondent
CCA Holdings reiterates that there was absolutely no identity of subject matter and causes of action because the first case sought
the payment for the services it already rendered, while the second case sought the recovery of damages representing the projected
net income that it failed to realize by reason of the unilateral and premature termination of the Management and Royalty
Agreements. Thus, the principles of res judicata and splitting of a single cause of action do not apply.
Even assuming that the prohibition against res judicata operates in this case, CCA Holdings contends that Riviera Golf is already
estopped from questioning the filing of the second complaint in view of the non-waiver clause inserted in the compromise
agreement.
The Issues
As defined by the parties, the issues before us are limited to:
1. Whether the CCA Holdings violated the prohibitions against res judicata and splitting a single cause of action when it filed the
claim for damages for unrealized profits; and
2. Whether the CA's interpretation of paragraph 4 of the compromise agreement is correct. If in the affirmative, whether the parties
may stipulate on an agreement violating the prohibitions against res judicata and splitting a single cause of action.
Our Ruling
We find the petition meritorious.
The Second Complaint is Barred by Res Judicata
Res judicata is defined as a matter adjudged; a thing judicially acted upon or decided; or a thing or matter settled by judgment.
Under this rule, a final judgment or decree on the merits by a court of competent jurisdiction is conclusive as to the rights of the
parties or their privies in all later suits, and on all points and matters determined in the former suit. 5ChanRoblesVirtualawlibrary
The concept of res judicata is embodied in Section 47(b) and (c) of Rule 39 of the Rules of Court, which reads:
SEC. 47. Effect of judgments or final orders. — The effect of a judgment or final order rendered by a court of the Philippines, having
jurisdiction to pronounce the judgment or final order, may be as follows:
(a) In case of a judgment or final order against a specific thing or in respect to the probate of a will, or the administration of the
estate of a deceased person, or in respect to the personal, political, or legal condition or status of a particular person or his
relationship to another, the judgment or final order is conclusive upon the title to the thing, the will or administration, or the
condition, status or relationship of the person; however, the probate of a will or granting of letters of administration shall only
be prima facie evidence of the death of the testator or intestate;
(b) In other cases, the judgment or final order is, with respect to the matter directly adjudged or as to any other matter that could
have been raised in relation thereto, conclusive between the parties and their successors in interest by title subsequent to the
commencement of the action or special proceeding, litigating for the same thing and under the same title and in the same capacity;
and,
(c) In any other litigation between the same parties or their successors in interest, that only is deemed to have been adjudged in a
former judgment or final order which appears upon its face to have been so adjudged, or which was actually and necessarily
included therein or necessary thereto.
Res judicata requires the concurrence of the following requisites: (1) the former judgment must be final; (2) it must have been
rendered by a court having jurisdiction of the subject matter and the parties; (3) it must be a judgment on the merits; and (4) there
must be, between the first and second actions (a) identity of parties, (b) identity of subject matter, and (c) identity of causes of
action.6ChanRoblesVirtualawlibrary
All the Elements of Res Judicata are Present

There is no dispute as to the presence of the first three elements in the present case. The decision in Civil Case No. 01-611 is a
final judgment on the merits rendered by a court which had jurisdiction over the subject matter and over the parties. Since a judicial
compromise operates as an adjudication on the merits, it has the force of law and the effect of res
judicata.7ChanRoblesVirtualawlibrary
With respect to the fourth element, a careful examination of the allegations in the two complaints shows that the cases involve the
same parties and the same subject matter. While Civil Case No. 01-611 is for the collection of unpaid management and royalty
fees, and Civil Case No. 03-399 on the other hand, is for recovery of damages for the premature termination of the parties'
agreements, both cases were nevertheless filed on the basis of the same Management and Royalty Agreements. Thus, we agree
that these two cases refer to the same subject matter.
The Court is also convinced that there is identity of causes of action between the first and the second complaints.
A cause of action may give rise to several reliefs, but only one action can be filed. 8 A single cause of action or entire claim or
demand cannot be split up or divided into two or more different actions. The rule on prohibiting the splitting of a single cause of
action is clear. Section 4, Rule 2 of the Rules of Court expressly states:
Section 4. Splitting a single cause of action; effect of. - If two or more suits are instituted on the basis of the same cause of action,
the filing of one or a judgment upon the merits in any one is available as a ground for the dismissal of the others.
In both Civil Case No. 01-611 and Civil Case No. 03-399, CCA Holdings imputed the same wrongful act - the alleged violations of
the terms and conditions of the Management and Royalty Agreements. In Civil Case No. 01-611, CCA Holdings' cause of
action rests on Riviera Golfs failure to pay the licensing fees, reimbursement claims, and monthly management and incentive fees.
In Civil Case No. 03-399 on the other hand, CCA Holdings' cause of action hinges on the damages it allegedly incurred as a result
of Riviera Golfs premature termination of the Management and Royalty Agreements (i.e., the expected business profits it was
supposed to derive for the unexpired two-year term of the Management Agreement). Although differing in form, these two cases are
ultimately anchored on Riviera Golfs breach of the Management and Royalty Agreements. Thus, we conclude that they have
identical causes of action.
Same Evidence Support and Establish Both the Present and the Former Cause of Action
It is a settled rule that the application of the doctrine of res judicata to identical causes of action does not depend on the similarity or
differences in the forms of the two actions. A party cannot, by varying the form of the action or by adopting a different method of
presenting his case, escape the operation of the doctrine of res judicata.9 The test of identity of causes of action rests on whether
the same evidence would support and establish the former and the present causes of action.10ChanRoblesVirtualawlibrary
We held in Esperas v. The Court of Appeals11 that the ultimate test in determining the presence of identity of cause of action is to
consider whether the same evidence would support the cause of action in both the first and the second cases. Under the same
evidence test, when the same evidence support and establish both the present and the former causes of action, there is likely an
identity of causes of action.12ChanRoblesVirtualawlibrary
The pleadings and record of the present case show that there is a glaring similarity in the documentary evidence submitted to
prove the claims under the two complaints. The pieces of evidence both in the collection of unpaid management and royalty
fees, and the recovery of damages for the expected business profits aim at establishing the breach of the Management and Royalty
Agreements.
Furthermore, the evidence in the first complaint will have to be reexamined to support the cause of action in the second complaint.
We specifically note that at least four (4) documents were presented in both actions, namely:
(1) the Management Agreement between Riviera Golf and CCA Holdings;
(2) the Royalty Agreement between Riviera Golf and CCA Holdings;
(3) the Fees Receivable Report of CCA Holdings as of October 1999, amounting to USD 97,122.00; and
(4) the letter dated October 29, 1999, stating the termination of the Management Agreement.
Based on the allegations in the two complaints, the facts that are necessary to support the second complaint would have been
sufficient to allow CCA Holdings to recover in the first complaint. The similarity in the pieces of evidence in these two cases
therefore strongly suggests the identity of their causes of action.
We held in this regard in Stilianopulos v. The City of Legaspi:13cralawlawlibrary

The underlying objectives or reliefs sought in both the quieting-of-title and the annulment-of-title cases are essentially the same
adjudication of the ownership of the disputed lot and nullification of one of the two certificates of title. Thus, it becomes readily
apparent that the same evidence or set of facts as those considered in the quieting-of-title case would also be used in this Petition.
The difference in form and nature of the two actions is immaterial and is not a reason to exempt petitioner from the effects of res
judicata. The philosophy behind this rule prohibits the parties from litigating 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, as long as it remains unreversed, should be conclusive upon the parties and those in privity with them.
Verily, there should be an end to litigation by the same parties and their privies over a subject, once it is fully and fairly adjudicated.
(Citations omitted.)
At the Time the First Complaint was Filed
The Breach of the Agreements was Already Total
We likewise note that the non-payment of fees and the premature termination of the contract occurred as early as 1999. In other
words, the violation of both the Management and Royalty Agreements preceded the filing of the first complaint. Consequently,
when CCA Holdings filed its first complaint in 2001, the breach of the agreements was already complete and total; and the ground
for the recovery of damages was available and in existence. Thus, allowing CCA Holdings now to file two separate and
independent claims anchored on the same breach of contract (i.e., breach of the Management and Royalty Agreements),
constitutes a blatant disregard of our prohibition against res judicata and splitting of a single cause of action.
In contracts providing several obligations, each obligation may give rise to a single and independent cause of action. But if several
obligations have matured, or if the entire contract is breached at the time of the filing of the complaint, all obligations are
integrated into one cause of action.Hence, the claim arising from such cause of action that is not included in the complaint is
barred forever. The Court's explanation in Blossom and Company, Inc. v. Manila Gas Corporation,14 citing US jurisprudence on the
matter, is instructive, viz:
34 Corpus Juris, p. 839, it is said:
As a general rule[,] a contract to do several things at several times in its nature, so as to authorize successive actions; and a
judgment recovered for a single breach of a continuing contract or covenant is no bar to a suit for a subsequent breach thereof. But
where the covenant or contract is entire, and the breach total, there can be only one action, and [the] plaintiff must therein recover
all his damages.
In the case of Rhoelm v. Horst, 178 U. U., 1; 44 Law. ed., 953, that court said:
An unqualified and positive refusal to perform a contract, though the performance thereof is not yet due, may, if the renunciation
goes to the whole contract, be treated as a complete breach which will entitle the injured party to bring his action at once.
In the present case, CCA Holdings' claim for the unpaid management and royalty fees as well as the damages for its expected
business profits constituted an indivisible demand. Verily, CCA Holdings should have included and alleged the recovery of
damages for its expected business profits as a second cause of action in Civil Case No. 01-611. CCA Holdings cannot be permitted
to split up a single cause of action and make that single cause of action the basis of several suits.
All told, the Court finds that the filing of the second complaint is barred by res judicata.
The "Non-Waiver Clause" Stipulated

in the Compromise Agreement is Null and Void
CCA Holdings contends that Riviera Golf is already estopped from questioning the filing of the second complaint because the non-
waiver clause of the Compromise Agreement recognized CCA Holdings' prerogative to seek damages arising from the premature
termination of the Management Agreement.
We do not see any merit in this contention.
A compromise is a contract whereby the parties, by making reciprocal concessions, avoid a litigation or put an end to one already
commenced.15 Like any other contract, a compromise agreement must be consistent with the requisites and principles of contracts.
While it is true that the agreement is binding between the parties and becomes the law between them, it is also a rule that to be
valid, a compromise agreement must not be contrary to law, morals, good customs, and public policy. 16ChanRoblesVirtualawlibrary
In the present case, a reading of paragraph 4 of the Compromise Agreement shows that it allows the filing of complaints based on
the same cause of action (i.e., breach of the Management and Royalty Agreements), to wit:
4) It is understood that the execution of this compromise agreement or the payment of the aforementioned sum of money shall not
be construed as a waiver of or with prejudice to plaintiffs rights/cause of action, if any, arising from or relative to the pre-
termination of the parties' Management and Royalty Agreements by the defendant subject to whatever claims and defenses
may have relative thereto; (Emphasis supplied.)
Since paragraph 4 allows the splitting of causes of action and res judicata, this provision of the Compromise Agreement should be
invalidated for being repugnant to our public policy.
The well-settled rule is that the principle or rule of res judicata is primarily one of public policy. It is based on the policy against
multiplicity of suits,17 whose primary objective is to avoid unduly burdening the dockets of the courts.
Speaking through Justice J.B.L. Reyes, the Court in Aguila v. J.M. Tuason & Co., Inc.18 held that:
Public policy is firmly set against unnecessary multiplicity of suits; the rule of res judicata, like that against splitting
causes of action, are all applications of the same policy, that matters once settled by a Court's final judgment should not
thereafter be invoked against. Relitigation of issues already settled merely burdens the Courts and the taxpayers, creates
uneasiness and confusion, and wastes valuable time and energy that could be devoted to worthier cases. As the Roman maxim
goes, Non bis in idem.19(Emphasis supplied.)
Because it is contrary to our policy against multiplicity of suits, we cannot uphold paragraph 4 of the Compromise Agreement to be
valid, for we would then render legitimate the splitting of causes of action and negate the prohibition against res judicata. Under
Article 1409 of the Civil Code, contracts which are contrary to public policy and those expressly prohibited or declared void by law
are considered inexistent and void from the beginning.
In sum, we declare paragraph 4 of the Compromise Agreement null and void for being contrary to public policy.
WHEREFORE, premises considered, we GRANT the petition. The decision dated January 11, 2006, of the Court of Appeals in CA-
G.R. CV No. 83824 is hereby REVERSED and SET ASIDE. Accordingly, the decision dated September 29, 2004, of the Regional
Trial Court, Branch 57, Makati City, in Civil Case No. 03-399 is REINSTATED.
SO ORDERED.cralawlawlibrary
FIRST DIVISION
G.R. No. 201892, July 22, 2015
NORLINDA S. MARILAG, Petitioner, v. MARCELINO B. MARTINEZ, Respondent.
DECISION
PERLAS-BERNABE, J.:
Assailed in this petition for review on certiorari1 are the Decision2 dated November 4, 2011 and the Resolution3 dated May 14, 2012
of the Court of Appeals (CA) in CA-G.R. CV No. 81258 which recalled and set aside the Orders dated November 3, 20034 and
January 14, 20045 of the Regional Trial Court (RTC) of Las Piñas City, Branch 202 (court a quo) in Civil Case No. 98-0156, and
reinstated the Decision6 dated August 28, 2003 directing petitioner Norlinda S. Marilag (petitioner) to return to respondent
Marcelino B. Martinez (respondent) the latter's excess payment, plus interest, and to pay attorney's fees and the costs of suit.
The Facts
On July 30, 1992, Rafael Martinez (Rafael), respondent's father, obtained from petitioner a loan in the amount of P160,000.00, with
a stipulated monthly interest of five percent (5%), payable within a period of six (6) months. The loan was secured by a real estate
mortgage over a parcel of land covered by Transfer Certificate of Title (TCT) No. T-208400. Rafael failed to settle his obligation
upon maturity and despite repeated demands, prompting petitioner to file a Complaint for Judicial Foreclosure of Real Estate
Mortgage before the RTC of Imus, Cavite, Branch 907 (RTC-Imus) on November 10, 1995,8 docketed as Civil Case No. 1208-95
Gudicial foreclosure case).
Rafael failed to file his answer and, upon petitioner's motion, was declared in default. After an ex partepresentation of petitioner's
evidence, the RTC-Imus issued a Decision9 dated January 30, 1998, (January 30, 1998 Decision) in the foreclosure case, declaring
the stipulated 5% monthly interest to be usurious and reducing the same to 12% per annum (p.a.). Accordingly, it ordered Rafael to
pay petitioner the amount of P229,200.00, consisting of the principal of P160,000.00 and accrued interest of P59,200.00 from July
30, 1992 to September 30, 1995.10 Records do not show that this Decision had already attained finality.
Meanwhile, prior to Rafael's notice of the above decision, respondent agreed to pay Rafael's obligation to petitioner which was
pegged at P689,000.00. After making a total payment of P400,000.00,11 he executed a promissory note12 dated February 20, 1998
(subject PN), binding himself to pay on or before March 31, 1998 the amount of P289,000.00, "representing the balance of the
agreed financial obligation of [his] father to [petitioner]."13 After learning of the January 30, 1998 Decision, respondent refused to
pay the amount covered by the subject PN despite demands, prompting petitioner to file a complaint 14for sum of money and
damages before the court a quo on July 2, 1998, docketed as Civil Case No. 98-0156 (collection case).
Respondent filed his answer,15 contending that petitioner has no cause of action against him. He averred that he has fully settled
Rafael's obligation and that he committed a mistake in paying more than the amount due under the loan, i.e., the amount of
P229,200.00 as adjudged by the RTC-Imus in the judicial foreclosure case which, thus, warranted the return of the excess
payment. He therefore prayed for the dismissal of the complaint, and interposed a compulsory counterclaim for the release of the
mortgage, the return of the excess payment, and the payment of moral and exemplary damages, attorney's fees and litigation
expenses.16redarclaw
The Court A Quo's Ruling
In a Decision17 dated August 28, 2003 (August 28, 2003 Decision), the court a quo denied recovery on the subject PN. It found that
the consideration for its execution was Rafael's indebtedness to petitioner, the extinguishment of which necessarily results in the
consequent extinguishment of the cause therefor. Considering that the RTC-Imus had adjudged Rafael liable to petitioner only for
the amount of P229,200.00, for which a total of P400,000.00 had already been paid, the court a quo found no valid or compelling
reason to allow petitioner to recover further on the subject PN. There being an excess payment of P171,000.00, it declared that a
quasi-contract (in the concept of solutio indebiti) exists between the parties and, accordingly, directed petitioner to return the said
amount to respondent, plus 6% interest p.a.18 reckoned from the date of judicial demand19 on August 6, 1998 until fully paid, and to
pay attorney's fees and the costs of suit.20redarclaw
In an Order21 dated November 3, 2003 (November 3, 2003 Order), however, the court a quo granted petitioner's motion for
reconsideration, and recalled and set aside its August 28, 2003 Decision. It declared that the causes of action in the collection and
foreclosure cases are distinct, and respondent's failure to comply with his obligation under the subject PN justifies petitioner to seek
judicial relief. It further opined that the stipulated 5% monthly interest is no longer usurious and is binding on respondent
considering the suspension of the Usury Law pursuant to Central Bank Circular 905, series of 1982. Accordingly, it directed
respondent to pay the amount of P289,000.00 due under the subject PN, plus interest at the legal rate reckoned from the last extra-
judicial demand on May 15, 1998, until fully paid, as well as attorney's fees and the costs of suit.22redarclaw
Aggrieved, respondent filed a motion for reconsideration 23 which was denied in an Order24 dated January 14, 2004, prompting him
to elevate the matter to the CA.25redarclaw
The CA Ruling
In a Decision26 dated November 4, 2011, the CA recalled and set aside the court a quo's November 3, 2003 and January 14, 2004
Orders, and reinstated the August 28, 2003 Decision. It held that the doctrine of res judicata finds application in the instant
case,27 considering that both the judicial foreclosure and collection cases were filed as a consequence of the non-payment
ofRafael's loan, which was the principal obligation secured by the real estate mortgage and the primary consideration for the
execution of the subject PN. Since res judicata only requires substantial, not actual, identity of causes of action and/or identity of
issue,28 it ruled that the judgment in the judicial foreclosure case relating to Rafael's obligation to petitioner is final and conclusive
on the collection case.
Petitioner's motion for reconsideration was denied in a Resolution29 dated May 14, 2012; hence, this petition.
The Issue Before the Court
The essential issue for the Court's resolution is whether or not the CA committed reversible error in upholding the dismissal of the
collection case.
The Court's Ruling
The petition lacks merit.
A case is barred by prior judgment or res judicata when the following elements concur: (a) the judgment sought to bar the new
action must be final; (b) the decision must have been rendered by a court having jurisdiction over the subject matter and the
parties; (c) the disposition of the case must be a judgment on the merits; and (d) there must be as between the first and second
action, identity of parties, subject matter, and causes of action.30redarclaw
After a punctilious review of the records, the Court finds the principle of res judicata to be inapplicable to the present case. This is
because the records are bereft of any indication that the August 28, 2003 Decision in the judicial foreclosure case had already
attained finality, evidenced, for instance, by a copy of the entry of judgment in the said case. Accordingly, with the very first element
of res judicata missing, said principle cannot be made to obtain.
This notwithstanding, the Court holds that petitioner's prosecution of the collection case was barred, instead, by the principle of litis
pendentia in view of the substantial identity of parties and singularity of the causes of action in the foreclosure and collection cases,
such that the prior foreclosure case barred petitioner's recourse to the subsequent collection case.
To lay down the basics, litis pendentia, as a ground for the dismissal of a civil action, refers to that situation
wherein another action is pending between the same parties for the same cause of action, such that the second action
becomes unnecessary and vexatious. For the bar of litis pendentia to be invoked, the following requisites must concur: (a)
identity of parties, or at least such parties as represent the same interests in both actions; (b) identity of rights asserted and relief
prayed for, the relief being founded on the same facts; and (c) the identity of the two preceding particulars is such that any
judgment rendered in the pending case, regardless of which party is successful would amount to res judicata in the other.31 The
underlying principle of litis pendentia is the theory that a party is not allowed to vex another more than once regarding the same
subject matter and for the same cause of action. This theory is founded on the public policy that the same subject matter should not
be the subject of controversy in courts more than once, in order that possible conflicting judgments may be avoided for the sake of
the stability of the rights and status of persons, and also to avoid the costs and expenses incident to numerous
suits.32 Consequently, a party will not be permitted to split up a single cause of action and make it a basis for several suits as the
whole cause must be determined in one action.33To be sure, splitting a cause of action is a mode of forum shopping by filing
multiple cases based on the same cause of action, but with different prayers, where the round of dismissal is litis
pendentia for res judicata, as the case may be).34redarclaw
In this relation, it must be noted that the question of whether a cause of action is single and entire orseparate is not always easy to
determine and the same must often be resolved, not by the general rules, but by reference to the facts and circumstances of the
particular case. The true rule, therefore, is whether the entire amount arises from one and the same act or contract which
must, thus, be sued for in one action, or the several parts arise from distinct and different acts or contracts, for which a
party may maintain separate suits.35redarclaw
In loan contracts secured by a real estate mortgage, the rule is that the creditor-mortgagee has a single cause of action against
the debtor mortgagor, i.e., to recover the debt, through the filing of a personal action for collection of sum of money or the
institution of a real action to foreclose on the mortgage security. The two remedies are alternative,36 not cumulative or
successive,37 and each remedy is complete by itself. Thus, if the creditor-mortgagee opts to foreclose the real estate mortgage, he
waives the action for the collection of the unpaid debt, 38except only for the recovery of whatever deficiency may remain in the
outstanding obligation of the debtor-mortgagor after deducting the bid price in the public auction sale of the mortgaged
properties.39 Accordingly, a deficiency judgment shall only issue after it is established that the mortgaged property was sold at
public auction for an amount less than the outstanding obligation.
In the present case, records show that petitioner, as creditor mortgagee, instituted an action for judicial foreclosure pursuant to the
provisions of Rule 68 of the Rules of Court in order to recover on Rafael's debt. In light of the foregoing discussion, the availment of
such remedy thus bars recourse to the subsequent filing of a personal action for collection of the same debt, in this case, under
the principle of litis pendentia, considering that the foreclosure case only remains pending as it was not shown to have attained
finality.
While the ensuing collection case was anchored on the promissory note executed by respondent who was not the original debtor,
the same does not constitute a separate and distinct contract of loan which would have given rise to a separate cause of action
upon breach. Notably, records are bereft of any indication that respondent's agreement to pay Rafael's loan obligation and the
execution of the subject PN extinguished by novation 40 the contract of loan between Rafael and petitioner, in the absence of
express agreement or any act of equal import. Well-settled is the rule that novation is never presumed, but must be clearly and
unequivocally shown. Thus, in order for a new agreement to supersede the old one, the parties to a contract must expressly agree
that they are abrogating their old contract in favor of a new one, 41 which was not shown here.
On the contrary, it is significant to point out that: (a) the consideration for the subject PN was the same consideration that supported
the original loan obligation of Rafael; (b) respondent merely assumed to pay Rafael's remaining unpaid balance in the latter's
behalf, i.e., as Rafael's agent or representative;42and (c) the subject PN was executed after respondent had assumed to pay
Rafael's obligation and made several payments thereon. Case law states that the fact that the creditor accepts payments from a
third person, who has assumed the obligation, will result merely in the addition of debtors, not novation, and the creditor may
enforce the obligation against both debtors.43 For ready reference, the subject PN reads in full:
ChanRoblesVirtualawlibrary
February 20, 1998
PROMISSORY NOTE
P289,000.00
I, MARCELINO B. MARTINEZ, son of Mr. RAFAEL MARTINEZ, of legal age, Filipino, married and a resident of No. 091 Anabu I-A,
Imus, Cavite, by these presents do hereby specifically and categorically PROMISE, UNDERTAKE and bind myself in behalf of my
father, to pay to Miss NORLINDA S. MARILAG, Mortgagee-Creditor of my said father, the sum of TWO HUNDRED EIGHTY NINE
THOUSAND PESOS (P289,000.00), Philippine Currency, on or before MARCH 31, 1998, representing the balance of the
agreed financial obligation of my said father to her. (Emphases supplied)
Executed at Pamplona I, Las Piñas City, Metro Manila, this 20th day of February, 1998.
Sgd.
MARCELINO B. MARTINEZ
Promissor44
Petitioner's contention that the judicial foreclosure and collection cases enforce independent rights 45must, therefore, fail because
the Deed of Real Estate Mortgage46 and the subject PN both refer to one and the same obligation, i.e., Rafael's loan obligation. As
such, there exists only one cause of actionfor a single breach of that obligation. Petitioner cannot split her cause of action on
Rafael's unpaid loan obligation by filing a petition for the judicial foreclosure of the real estate mortgage covering the said loan, and,
thereafter, a personal action for the collection of the unpaid balance of said obligation not comprising a deficiency arising from
foreclosure, without violating the proscription against splitting a single cause of action, where the ground for dismissal is either res
judicata or litis pendentia, as in this case.
As elucidated by this Court in the landmark case of Bachrach Motor Co., Inc. v. Icarangal.47
For non-payment of a note secured by mortgage, the creditor has a single cause of action against the debtor. This single
cause of action consists in the recovery of the credit with execution of the security. In other words, the creditor in his action may
make two demands, the payment of the debt and the foreclosure of his mortgage. But both demands arise from the same cause,
the non-payment of the debt, and, for that reason, they constitute a single cause of action. Though the debt and the mortgage
constitute separate agreements, the latter is subsidiary to the former, and both refer to one and the same obligation.
Consequently, there exists only one cause of action for a single breach of that obligation. Plaintiff, then, by applying the
rule above stated, cannot split up his single cause of action by filing a complaint for payment of the debt, and thereafter
another complaint for foreclosure of the mortgage. If he does so, the filing of the first complaint will bar the subsequent
complaint. By allowing the creditor to file two separate complaints simultaneously or successively, one to recover his credit and
another to foreclose his mortgage, we will, in effect, be authorizing him plural redress for a single breach of contract at so much
cost to the courts and with so much vexation and oppression to the debtor. (Emphases and underscoring supplied)
Further on the point, the fact that no foreclosure sale appears to have been conducted is of no moment because the remedy of
foreclosure of mortgage is deemed chosen upon the filing of the complainttherefor.48 In Suico Rattan & Buri Interiors, Inc. v. CA,49 it
was explained:LawlibraryofCRAlaw
x x x x In sustaining the rule that prohibits mortgage creditors from pursuing both the remedies of a personal action for debt or a
real action to foreclose the mortgage, the Court held in the case of Bachrach Motor Co., Inc. v. Esteban Icarangal, et al. that a rule
which would authorize the plaintiff to bring a personal action against the debtor and simultaneously or successively another action
against the mortgaged property, would result not only in multiplicity of suits so offensive to justice and obnoxious to law and equity,
but also in subjecting the defendant to the vexation of being sued in the place of his residence or of the residence of the plaintiff,
and then again in the place where the property lies. Hence, a remedy is deemed chosen upon the filing of the suit for
collection or upon the filing of the complaint in an action for foreclosure of mortgage, pursuant to the provisions of Rule
68 of the Rules of Court. As to extrajudicial foreclosure, such remedy is deemed elected by the mortgage creditor upon filing of
the petition not with any court of justice but with the office of the sheriff of the province where the sale is to be made, in accordance
with the provisions of Act No. 3135, as amended by Act No. 4118. (Emphases supplied)
As petitioner had already instituted judicial foreclosure proceedings over the mortgaged property, she is now barred from
availing herself of an ordinary action for collection, regardless of whether or not the decision in the foreclosure case had
attained finality. In fine, the dismissal of the collection case is in order. Considering, however, that respondent's claim for return of
excess payment partakes of the nature of a compulsory counterclaim and, thus, survives the dismissal of petitioner's collection suit,
the same should be resolved based on its own merits and evidentiary support.50redarclaw
Records show that other than the matter of interest, the principal loan obligation and the payments made were not disputed by the
parties. Nonetheless, the Court finds the stipulated 5% monthly interest to be excessive and unconscionable. In a plethora of
cases, the Court has affirmed that stipulated interest rates of three percent (3%) per month and higher are excessive,
iniquitous, unconscionable, and exorbitant,51hence, illegal52and void for being contrary to morals.53 In Agner v. BPI Family
Savings Bank, Inc.,54 the Court had the occasion to rule:LawlibraryofCRAlaw
Settled is the principle which this Court has affirmed in a number of cases that stipulated interest rates of three percent (3%) per
month and higher are excessive, iniquitous, unconscionable, and exorbitant. While Central Bank Circular No. 905-82, which took
effect on January 1, 1983, effectively removed the ceiling on interest rates for both secured and unsecured loans, regardless of
maturity, nothing in the said circular could possibly be read as granting carte blanche authority to lenders to raise interest rates to
levels which would either enslave their borrowers or lead to a hemorrhaging of their assets. Since the stipulation on the interest
rate is void for being contrary to morals, if not against the law, it is as if there was no express contract on said interest
rate; thus, the interest rate may be reduced as reason and equity demand. (Emphases supplied)
As such, the stipulated 5% monthly interest should be equitably reduced to 1% per month or 12% p.a. reckoned from the execution
of the real estate mortgage on July 30, 1992. In order to determine whether there was any overpayment as claimed by respondent,
we first compute the interest until January 30, 199855 when he made a payment in the amount of P300,000.00 on Rafael's loan
obligation. Accordingly, the amount due on the loan as of the latter date is hereby computed as follows:LawlibraryofCRAlaw
Principal P160,000.00
Interest from 07/30/1992 to
Add:
01/30/1998
(P160,000.00 X 12% X 5.5
105,600.00
yrs.)
Amount due on the loan P265,600.00
Less: Payment made on
( 300,000.00)
01/30/98
Overpayment as of 01/30/98 (P 34,400.00)56
Thus, as of January 30, 1998, only the amount of P265,600.00 was due under the loan contract, and the receipt of an amount more
than that renders petitioner liable for the return of the excess. Respondent, however, made further payment in the amount of
P100,000.0057 on the belief that the subject loan obligation had not yet been satisfied. Such payments were, therefore, clearly
made by mistake, giving rise to the quasi-contractual obligation of solutio indebiti under Article 215458 in relation to Article 216359of
the Civil Code. Not being a loan or forbearance of money, an interest of 6% p.a. should be imposed on the amount to be refunded
and on the damages and attorney's fees awarded, if any, computed from the time of demand 60 until its satisfaction.61 Consequently,
petitioner must return to respondent the excess payments in the total amount of P134,400.00, with legal interest at the rate of 6%
p.a. from the filing of the Answer on August 6, 1998 62 interposing a counterclaim for such overpayment, until fully settled.
However, inasmuch as the court a quo failed to state in the body of its decision the factual or legal basis for the award of attorney's
fees to the respondent, as required under Article 2208 63 of the New Civil Code, the Court resolves to delete the same. The rule is
well-settled that the trial court must clearly state the reasons for awarding attorney's fees in the body of its decision, not merely in
its dispositive portion, as the appellate courts are precluded from supplementing the bases for such award. 64redarclaw
Finally, in the absence of showing that the court a quo's award of the costs of suit in favor of respondent was patently
capricious,65 the Court finds no reason to disturb the same.
WHEREFORE, the petition is DENIED. The Decision dated November 4, 2011 and the Resolution dated May 14, 2012 of the Court
of Appeals in CA-G.R. CV No. 81258 reinstating the court a quo's Decision dated August 28, 2003 in Civil Case No. 98-0156 are
hereby AFFIRMED with the MODIFICATIONS: (a) directing petitioner Norlinda S. Marilag to return to respondent Marcelino B.
Martinez the latter's excess payments in the total amount of P134,400.00, plus legal interest at the rate of 6% p.a. from the filing of
the Answer on August 6, 1998 until full satisfaction; and (b) deleting the award of attorney's fees.
SO ORDERED.cralawlawlibrary
BERSAMIN, J.:
Jurisdiction over a real action is determined based on the allegations in the complaint of the assessed value of the property
involved. The silence of the complaint on such value is ground to dismiss the action for lack of jurisdiction because the trial court is
not given the basis for making the determination.
The Case
For review is the decision promulgated on June 25, 2010 [1] and the resolution promulgated on February 16, 2011 in CA-G.R. CV
No. 86735,[2] whereby the Court of Appeals (CA) dismissed the petitioners' complaint in Civil Case No. 96-81167, thereby
respectively reversing and setting aside the decision rendered on May 30, 2005 by the Regional Trial Court (RTC), Branch 32, in
Manila,[3] and denying their motion for reconsideration.
Antecedents
The CA adopted the summary by the RTC of the relevant factual and procedural antecedents, as follows:
This is an action for injunction and quieting of title to determine who owns the property occupied by the plaintiffs and intervenor,
Ciriano C. Mijares.
Additionally, to prevent the defendant Patricia Inc., from evicting the plaintiffs from their respective improvements along Juan Luna
Street, plaintiffs applied for a preliminary injunction in their Complaint pending the quieting of title on the merits.
The complaint was amended to include different branches of the Metropolitan Trial Courts of Manila. A Complaint-in-Intervention
was filed by the City of Manila as owner of the land occupied by the plaintiffs. Another Complaint-in-Intervention by Ciriano Mijares
was also filed alleging that he was similarly situated as the other plaintiffs.
A preliminary injunction was granted and served on all the defendants.
Based on the allegations of the parties involved, the main issue to be resolved is whether the improvements of the plaintiffs stand
on land that belongs to Patricia Inc., or the City of Manila. Who owns the same? Is it covered by a Certificate of Title?
All parties agreed and admitted in evidence by stipulation as to the authenticity of the following documents:
(1) Transfer Certificate of Title No. 44247 in the name of the City of Manila;
(2) Transfer Certificate of Title No. 35727 in the name of Patricia Inc.;
(3) Approved Plan PSD-38540; and
(4) Approved Subdivision Plan PCS-3290 for Ricardo Manotok.
The issue as to whether TCT 35727 should be cancelled as prayed for by the plaintiffs and intervenor, Ciriano C. Mijares is laid to
rest by agreement of the parties that this particular document is genuine and duly executed. Nonetheless, the cancellation of a
Transfer Certificate of Title should be in a separate action before another forum.
Since the Transfer Certificates of Title of both Patricia Inc. and the City of Manila are admitted as genuine, the question now is:
Where are the boundaries based on the description in the respective titles?[4]
To resolve the question about the boundaries of the properties of the City of Manila and respondent Patricia, Inc., the RTC
appointed, with the concurrence of the parties, three geodetic engineers as commissioners, namely: Engr. Rosario Mercado, Engr.
Ernesto Pamular and Engr. Delfin Bumanlag.[5] These commissioners ultimately submitted their reports.
On May 30, 2005, the RTC rendered judgment in favor of the petitioners and against Patricia, Inc., permanently enjoining the latter
from doing any act that would evict the former from their respective premises, and from collecting any rentals from them. The RTC
deemed it more sound to side with two of the commissioners who had found that the land belonged to the City of Manila, and
disposed:
WHEREFORE, it is hereby ORDERED:
1. Defendant Patricia Inc. and other person/s claiming under it, are PERMANENTLY ENJOINED to REFRAIN and
DESIST from any act of EVICTION OR EJECTMENT of the PLAINTIFFS in the premises they occupy;
2. Defendant Patricia Inc. STOP COLLECTING any rentals from the plaintiffs who may seek reimbursement of previous
payments in a separate action subject to the ownership of the City of Manila and;
3. Attorney's fees of P10,000.00 to each plaintiff and intervenor, Ciriano Mijares; P20,000.00 to the City of Manila. (emphasis
ours)
No pronouncement as to costs.
SO ORDERED.[6]
Decision of the CA
On appeal, the CA, in CA-G.R. CV No. 86735, reversed the RTC's judgment,[7] and dismissed the complaint. The CA declared that
the petitioners were without the necessary interest, either legal or equitable title, to maintain a suit for quieting of title; castigated the
RTC for acting like a mere rubber stamp of the majority of the commissioners; opined that the RTC should have conducted
hearings on the reports of the commissioners; ruled as highly improper the adjudication of the boundary dispute in an action for
quieting of title; and decreed:
WHEREFORE, premises considered, We hereby REVERSE and SET ASIDE the decision dated May 30, 2005 of the Regional
Trial Court of Manila, Branch 32. Civil Case No. 96-81167 is hereby DISMISSED for utter want of merit. Accordingly, the
questioned order enjoining Patricia and all other person/s acting on its stead (sic) to refrain and desist from evicting or ejecting
plaintiffs/appellees in Patricia's own land and from collecting rentals is LIFTED effective immediately.
No costs.
SO ORDERED.[8]
The CA denied the motions for reconsideration of the petitioners and intervenor Mijares through the assailed resolution of February
16, 2011.[9]
Hence, this appeal by the petitioners.
Issues
The petitioners maintain that the CA erred in dismissing the complaint, arguing that the parties had openly raised and litigated the
boundary issue in the RTC, and had thereby amended the complaint to conform to the evidence pursuant to Section 5, Rule 10 of
the Rules of Court; that they had the sufficient interest to bring the suit for quieting of title because they had built their
improvements on the property; and that the RTC correctly relied on the reports of the majority of the commissioners.
On its part, the City of Manila urges the Court to reinstate the decision of the RTC. It reprises the grounds relied upon by the
petitioners, particularly the application of Section 5, Rule 10 of the Rules of Court.[10]
In response, Patricia, Inc. counters that the boundary dispute, which the allegations of the complaint eventually boiled down to, was
not proper in the action for quieting of title under Rule 63, Rules of Court; and that Section 5, Rule 10 of the Rules of Court did not
apply to vest the authority to resolve the boundary dispute in the RTCC. [11]
In other words, did the CA err m dismissing the petitioners' complaint?
Ruling of the Court
The appeal lacks merit.
1.
Jurisdiction over a real action depends on
the assessed value of the property involved
as alleged in the complaint
The complaint was ostensibly for the separate causes of action for injunction and for quieting of title. As such, the allegations that
would support both causes of action must be properly stated in the complaint. One of the important allegations would be those
vesting jurisdiction in the trial court.
The power of a court to hear and decide a controversy is called its jurisdiction, which includes the power to determine whether or
not it has the authority to hear and determine the controversy presented, and the right to decide whether or not the statement of
facts that confer jurisdiction exists, as well as all other matters that arise in the case legitimately before the court. Jurisdiction
imports the power and authority to declare the law, to expound or to apply the laws exclusive of the idea of the power to make the
laws, to hear and determine issues of law and of fact, the power to hear, determine, and pronounce judgment on the issues before
the court, and the power to inquire into the facts, to apply the law, and to pronounce the judgment.[12]
But judicial power is to be distinguished from jurisdiction in that the former cannot exist without the latter and must of necessity be
exercised within the scope of the latter, not beyond it. [13]
Jurisdiction is a matter of substantive law because it is conferred only by law, as distinguished from venue, which is a purely
procedural matter. The conferring law may be the Constitution, or the statute organizing the court or tribunal, or the special or
general statute defining the jurisdiction of an existing court or tribunal, but it must be in force at the time of the commencement of
the action.[14]Jurisdiction cannot be presumed or implied, but must appear clearly from the law or it will not be held to exist, [15] but it
may be conferred on a court or tribunal by necessary implication as well as by express terms. [16] It cannot be conferred by the
agreement of the parties;[17]or by the court's acquiescence;[18] or by the erroneous belief of the court that it had jurisdiction;[19] or by
the waiver of objections;[20] or by the silence of the parties.[21]
The three essential elements of jurisdiction are: one, that the court must have cognizance of the class of cases to which the one to
be adjudged belongs; two, that the proper parties must be present; and, three, that the point decided must be, in substance and
effect, within the issue. The test for determining jurisdiction is ordinarily the nature of the case as made by the complaint and the
relief sought; and the primary and essential nature of the suit, not its incidental character, determines the jurisdiction of the court
relative to it.[22]
Jurisdiction may be classified into original and appellate, the former being the power to take judicial cognizance of a case instituted
for judicial action for the first time under conditions provided by law, and the latter being the authority of a court higher in rank to re-
examine the final order or judgment of a lower court that tried the case elevated for judicial review. Considering that the two classes
of jurisdiction are exclusive of each other, one must be expressly conferred by law. One does not flow, nor is inferred, from the
other.[23]
Jurisdiction is to be distinguished from its exercise. [24] When there is jurisdiction over the person and subject matter, the decision of
all other questions arising in the case is but an exercise of that jurisdiction.[25] Considering that jurisdiction over the subject matter
determines the power of a court or tribunal to hear and determine a particular case, its existence does not depend upon the
regularity of its exercise by the court or tribunal. [26] The test of jurisdiction is whether or not the court or tribunal had the power to
enter on the inquiry, not whether or not its conclusions in the course thereof were correct, for the power to decide necessarily
carries with it the power to decide wrongly as well as rightly. In a manner of speaking, the lack of the power to act at all results in a
judgment that is void; while the lack of the power to render an erroneous decision results in a judgment that is valid until set
aside.[27] That the decision is erroneous does not divest the court or tribunal that rendered it of the jurisdiction conferred by law to
try the case.[28] Hence, if the court or tribunal has jurisdiction over the civil action, whatever error may be attributed to it is simply
one of judgment, not of jurisdiction; appeal, not certiorari, lies to correct the error.[29]
The exclusive original jurisdiction of the RTC in civil cases is conferred and provided for in Section 19 of Batas Pambansa Blg.
129 (Judiciary Reorganization Act of 1980), viz.:
Sec. 19. Jurisdiction in civil cases. - Regional Trial Courts shall exercise exclusive original jurisdiction:
(1) In all civil actions in which the subject of the litigation is incapable of pecuniary estimation;
(2) In all civil actions which involve the title to, or possession of, real property, or any interest therein, except actions for forcible
entry into and unlawful detainer of lands or buildings, original jurisdiction over which is conferred upon Metropolitan Trial Courts,
Municipal Trial Courts, and Municipal Circuit Trial Courts;
(3) In all actions in admiralty and maritime jurisdiction where he demand or claim exceeds twenty thousand pesos (P20,000.00);
(4) In all matters of probate, both testate and intestate, where the gross value of the estate exceeds twenty thousand pesos
(P20,000.00);
(5) In all actions involving the contract of marriage and marital relations;
(6) In all cases not within the exclusive jurisdiction of any court, tribunal, person or body exercising judicial or quasi-judicial
functions;
(7) In all civil actions and special proceedings falling within the exclusive original jurisdiction of a Juvenile and Domestic Relations
Court and of the Courts of Agrarian Relations as now provided by law; and
(8) In all other cases in which the demand, exclusive of interest and costs or the value of the property in controversy, amounts to
more than twenty thousand pesos (P20,000.00).
For the purpose of determining jurisdiction, the trial court must interpret and apply the law on jurisdiction in relation to the
averments or allegations of ultimate facts in the complaint regardless of whether or not the plaintiff is entitled to recover upon all or
some of the claims asserted therein.[30] Based on the foregoing provision of law, therefore, the RTC had jurisdiction over the cause
of action for injunction because it was one in which the subject of the litigation was incapable of pecuniary estimation. But the same
was not true in the case of the cause of action for the quieting of title, which had the nature of a real action — that is, an action that
involves the issue of ownership or possession of real property, or any interest in real property [31] — in view of the expansion of the
jurisdiction of the first level courts under Republic Act No. 7691, which amended Section 33(3) of Batas Pambansa Blg. 129
effective on April 15, 1994,[32] to now pertinently provide as follows:
Section 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts in Civil Cases. -
Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts shall exercise:
xxxx
(3) Exclusive original jurisdiction in all civil actions which involve title to, possession of, real property, or any interest
therein where the assessed value of the property or interest therein does not exceed Twenty thousand pesos (P20,000.00)
or, in civil actions in Metro Manila, where such assessed value does not exceeds (sic) Fifty thousand pesos (P50,000.00)
exclusive of interest, damages of whatever kind, attorneys fees, litigation expenses and costs: x x x
As such, the determination of which trial court had the exclusive original jurisdiction over the real action is dependent on the
assessed value of the property in dispute.
An action to quiet title is to be brought as a special civil action under Rule 63 of the Rules of Court. Although Section 1 of Rule 63
specifies the forum to be "the appropriate Regional Trial Court,"[33] the specification does not override the statutory provision on
jurisdiction. This the Court has pointed out in Malana v. Tappa,[34] to wit:
To determine which court has jurisdiction over the actions identified in the second paragraph of Section 1, Rule 63 of the Rules of
Court, said provision must be read together with those of the Judiciary Reorganization Act of 1980, as amended.
It is important to note that Section 1, Rule 63 of the Rules of Court does not categorically require that an action to quiet title be filed
before the RTC. It repeatedly uses the word "may"- that an action for quieting of title "may be brought under [the] Rule" on petitions
for declaratory relief, and a person desiring to file a petition for declaratory relief "may x x x bring an action in the appropriate
Regional Trial Court." The use of the word "may" in a statute denotes that the provision is merely permissive and indicates a mere
possibility, an opportunity or an option.
In contrast, the mandatory provision of the Judiciary Reorganization Act of 1980, as amended, uses the word shall and explicitly
requires the MTC to exercise exclusive original jurisdiction over all civil actions which involve title to or possession of real
property where the assessed value does not exceed P20,000.00, thus:
xxxx
As found by the RTC, the assessed value of the subject property as stated in Tax Declaration No. 02-48386 is only P410.00;
therefore, petitioners Complaint involving title to and possession of the said property is within the exclusive original jurisdiction of
the MTC, not the RTC.[35]
The complaint of the petitioners did not contain any averment of the assessed value of the property. Such failure left the trial court
bereft of any basis to determine which court could validly take cognizance of the cause of action for quieting of title. Thus, the RTC
could not proceed with the case and render judgment for lack of jurisdiction. Although neither the parties nor the lower courts raised
jurisdiction of the trial court in the proceedings, the issue did not simply vanish because the Court can hereby motu proprio consider
and resolve it now by virtue of jurisdiction being conferred only by law, and could not be vested by any act or omission of any
party.[36]
2.
The joinder of the action for injunction
and the action to quiet title
was disallowed by the Rules of Court
Another noticeable area of stumble for the petitioners related to their having joined two causes of action, i.e., injunction and quieting
of title, despite the first being an ordinary suit and the latter a special civil action under Rule 63. Section 5, Rule 2 of the Rules of
Courtdisallowed the joinder, viz.:
Section 5. Joinder of causes of action. — A party may in one pleading assert, in the alternative or otherwise, as many causes of
action as he may have against an opposing party, subject to the following conditions:
(a) The party joining the causes of action shall comply with the rules on joinder of parties;
(b) The joinder shall not include special civil actions or actions governed by special rules;
(c) Where the causes of action arc between the same parties but pertain to different venues or jurisdictions, the joinder may be
allowed in the Regional Trial Court provided one of the causes of action falls within the jurisdiction of said court and the venue lies
therein; and
(d) Where the claims in all the causes of action arc principally for recovery of money, the aggregate amount claimed shall he the
test of jurisdiction.
Consequently, the RTC should have severed the causes of action, either upon motion or motu proprio, and tried them separately,
assuming it had jurisdiction over both. Such severance was pursuant to Section 6, Rule 2 of the Rules of Court, which expressly
provides:
Section 6. Misjoinder of causes of action. -- Misjoinder of causes of action is not a ground for dismissal of an action. A misjoined
cause of action may, on motion of a party or on the initiative of the court, be severed and proceeded with separately. (n)
The refusal of the petitioners to accept the severance would have led to the dismissal of the case conformably with the mandate of
Section, Rule 17 of the Rules of Court, to wit:
Section 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. (3a)
3.
The petitioners did not show that they were
real parties in interest to demand
either injunction or quieting of title
Even assuming that the RTC had jurisdiction over the cause of action for quieting of title, the petitioners failed to allege and prove
their interest to maintain the suit. Hence, the dismissal of this cause of action was warranted.
An action to quiet title or remove the clouds over the title is a special civil action governed by the second paragraph of Section 1,
Rule 63 of the Rules of Court. Specifically, an action for quieting of title is essentially a common law remedy grounded on equity.
The competent court is tasked to determine the respective rights of the complainant and other claimants, not only to put things in
their proper place, to make the one who has no rights to said immovable respect and not disturb the other, but also for the benefit
of both, so that he who has the right would see every cloud of doubt over the property dissipated, and he could afterwards without
fear introduce the improvements he may desire, to use, and even to abuse the property as he deems best. But "for an action to
quiet title to prosper, two indispensable requisites must concur, namely: (1) the plaintiff or complainant has a legal or an equitable
title to or interest in the real property subject of the action; and (2) the deed, claim, encumbrance, or proceeding claimed to be
casting cloud on his title must be shown to be in fact invalid or inoperative despite its prima facie appearance of validity or legal
efficacy.[37]
The first requisite is based on Article 477 of the Civil Code which requires that the plaintiff must have legal or equitable title to, or
interest in the real property which is the subject matter of the action. Legal title denotes registered ownership, while equitable title
means beneficial ownership,[38] meaning a title derived through a valid contract or relation, and based on recognized equitable
principles; the right in the party, to whom it belongs, to have the legal title transferred to him. [39]
To determine whether the petitioners as plaintiffs had the requisite interest to bring the suit, a resort to the allegations of the
complaint is necessary. In that regard, the complaint pertinently alleged as follows:
THE CAUSE OF ACTION
5. Plaintiffs are occupants of a parcel of land situated at Juan Luna Street, Gagalangin, Tondo (hereinafter "subject property");
6. Plaintiffs and their predecessor-in-interest have been in open and notorious possession of the subject property for more than
thirty (30) years;
7. Plaintiffs have constructed in good faith their houses and other improvements on the subject property;
8. The subject property is declared an Area for Priority Development (APD) under Presidential Decree No. 1967, as amended;
9. Defendant is claiming ownership of the subject property by virtue of Transfer Certificate of Title (TCT) No. 35727 of the Registry
of Deeds for the City of Manila. x x x
10. Defendant's claim of ownership over the subject property is without any legal or factual basis because, assuming but not
conceding that the TCT No. 35727 covers the subject property, the parcel of land covered by and embraced in TCT No. 35727 has
already been sold and conveyed by defendant and, under the law, TCT No. 35727 should have been cancelled;
11. By virtue of TCT No. 35727, defendant is evicting, is about to evict or threatening to evict the plaintiffs from the said parcel of
land;
12. Because of the prior sales and conveyances, even assuming but not conceding that the subject property is covered by and
embraced in Transfer Certificate of title No. 35727, defendant cannot lawfully evict the plaintiffs from the subject property since it no
longer owns the subject property;
13. Any attempted eviction of the plaintiffs from the subject property would be without legal basis and consequently, would only be
acts of harassment which are contrary to morals, good customs and public policy and therefore, plaintiffs are entitled to enjoin the
defendant from further harassing them;
14. Plaintiffs recently discovered that the subject property is owned by the City of Manila and covered by and embraced in Transfer
Certificate of Title No. 44247, a copy of which is attached hereto as Annex "B", of the Registry of Deeds for the City of Manila;
15. TCT No. 35727 which is apparently valid and effective is in truth and in fact invalid, ineffective, voidable or unenforceable, and
constitutes a cloud on the rights and interests of the plaintiffs over the subject property;
16. Plaintiffs are entitled to the removal of such cloud on their rights and interests over the subject property;
17. Even assuming, but not admitting, that defendant owns the subject property, it cannot evict the plaintiffs from the subject
property because plaintiffs' right to possess the subject property is protected by Presidential Decree No. 2016.
18. Even assuming, but not admitting, that defendant owns the subject property, it cannot evict the plaintiffs from the subject
property without reimbursing the plaintiffs for the cost of the improvements made upon the subject property;
19. Because of defendant's unwarranted claim of ownership over the subject property and its attempt to evict or disposses the
plaintiffs from the subject property, plaintiffs experienced mental anguish, serious anxiety, social humiliation, sleepless nights and
loss of appetite for which defendant should be ordered to pay each plaintiff the amount of P20,000.00 as moral damages;
20. Because of defendant's unwarranted claim of ownership over the subject property and its attempt to evict or disposses the
plaintiffs from the subject property, plaintiffs were constrained to litigate to protect their rights and interests, and hire services of a
lawyer, for which they should each be awarded the amount of P10,000.00.
21. The plaintiffs and the defendants are not required to undergo conciliation proceeding before the Katarungan Pambarangay prior
to the filing of this action.[40]
The petitioners did not claim ownership of the land itself, and did not show their authority or other legal basis on which they had
anchored their alleged lawful occupation and superior possession of the property. On the contrary, they only contended that their
continued possession of the property had been for more than 30 years; that they had built their houses in good faith; and that the
area had been declared an Area for Priority Development (APD) under Presidential Decree No. 1967, as amended. Yet, none of
such reasons validly clothed them with the necessary interest to maintain the action for quieting of title. For one, the authenticity of
the title of the City of Manila and Patricia, Inc. was not disputed but was even admitted by them during trial. As such, they could not
expect to have any right in the property other than that of occupants whose possession was only tolerated by the owners and
rightful possessors. This was because land covered by a Torrens title cannot b e acquired by prescription or by adverse
possession.[41] Moreover, they would not be builders entitled to the protection of the Civil Code as builders in good faith. Worse for
them, as alleged in the respondent's comments,[42] which they did not deny, they had been lessees of Patricia, Inc. Such
circumstances indicated that they had no claim to possession in good faith, their occupation not being in the concept of owners.
At this juncture, the Court observes that the fact that the area was declared an area for priority development (APD) under
Presidential Decree No. 1967, as amended, did not provide sufficient interest to the petitioners. When an area is declared as an
APD, the occupants would enjoy the benefits provided for in Presidential Decree No. 1517 (Proclaiming Urban land Reform in the
Philippines and Providing for the Implementing Machinery Thereof). In Frilles v. Yambao,[43] the Court has summarized the salient
features of Presidential Decree No. 1517, thus:
P. D. No. 1517, which took effect on June 11, 1978, seeks to protect the rights of bona-fide tenants in urban lands by prohibiting
their ejectment therefrom under certain conditions, and by according them preferential right to purchase the land occupied by them.
The law covers all urban and urbanizable lands which have been proclaimed as urban land reform zones by the President of the
Philippines. If a particular property is within a declared Area for Priority Development and Urban Land Reform Zone, the qualified
lessee of the said property in that area can avail of the right of first refusal to purchase the same in accordance with
Section 6 of the same law. Only legitimate tenants who have resided for ten years or more on specific parcels of land
situated in declared Urban Land Reform Zones or Urban Zones, and who have built their homes thereon, have the right not to be
dispossessed therefrom and the right of first refusal to purchase the property under reasonable terms and conditions to
be determined by the appropriate government agency. [Bold emphasis supplied]
Presidential Decree No. 1517 only granted to the occupants of APDs the right of first refusal, but such grant was true only if and
when the owner of the property decided to sell the property. Only then would the right of first refusal accrue. Consequently, the right
of first refusal remained contingent, and was for that reason insufficient to vest any title, legal or equitable, in the petitioners.
Moreover, the CA's adverse judgment dismissing their complaint as far as the action to quiet title was concerned was correct. The
main requirement for the action to be brought is that there is a deed, claim, encumbrance, or proceeding casting cloud on the
plaintiffs' title that is alleged and shown to be in fact invalid or inoperative despite its prima facie appearance of validity or legal
efficacy, the eliminates the existence of the requirement. Their admission of the genuineness and authenticity of Patricia, Inc.'s title
negated the existence of such deed, instrument, encumbrance or proceeding that was invalid, and thus the action must necessarily
fail.
4.
The petitioners did not have
a cause of action for injunction
The petitioners did not also make out a case for injunction in their favor.
The nature of the remedy of injunction and the requirements for the issuance of the injunctive writ have been expounded
in Philippine Economic Zone Authority v. Carantes,[44] as follows:
Injunction is a judicial writ, process or proceeding whereby a party is directed either to do a particular act, in which case it is called a
mandatory injunction or to refrain from doing a particular act, in which case it is called a prohibitory injunction. As a main action,
injunction seeks to permanently enjoin the defendant through a final injunction issued by the court and contained in the judgment.
Section 9, Rule 58 of the 1997 Rules of Civil Procedure, as amended, provides,
SEC. 9. When final injunction granted. If after the trial of the action it appears that the applicant is entitled to have the act or acts
complained of permanently enjoined, the court shall grant a final injunction perpetually restraining the party or person enjoined from
the commission or continuance of the act or acts or confirming the preliminary mandatory injunction.
Two (2) requisites must concur for injunction to issue: (1) there must be a right to be protected and (2) the acts against which
the injunction is to be directed are violative of said right. Particularly, in actions involving realty, preliminary injunction will lie
only after the plaintiff has fully established his title or right thereto by a proper action for the purpose. [Emphasis Supplied]
Accordingly, the petitioners must prove the existence of a right to be protected. The records show, however, that they did not have
any right to be protected because they had established only the existence of the boundary dispute between Patricia, Inc. and the
City of Manila. Any violation of the boundary by Patricia, Inc., if any, would give rise to the right of action in favor of the City of
Manila only. The dispute did not concern the petitioners at all.
5.
Section 5, Rule 10 of the Rules of Court
did not save the day for the petitioners
The invocation of Section 5, Rule 10 of the Rules of Court in order to enable the raising of the boundary dispute was unwarranted.
First of all, a boundary dispute should not be litigated in an action for the quieting of title due to the limited scope of the action. The
action for the quieting of title is a tool specifically used to remove of any cloud upon, doubt, or unce1iainty affecting title to real
property;[45] it should not be used for any other purpose. And, secondly, the boundary dispute would essentially seek to alter or
modify either the Torrens title of the City of Manila or that of Patricia, Inc., but any alteration or modification either way should be
initiated only by direct proceedings, not as an issue incidentally raised by the parties herein. To allow the boundary dispute to be
litigated in the action for quieting of title would violate Section 48[46] of the Property Registration Decree by virtue of its prohibition
against collateral attacks on Torrens titles. A collateral attack takes place when, in another action to obtain a different relief, the
certificate of title is assailed as an incident in said action.[47] This is exactly what the petitioners sought to do herein, seeking to
modify or otherwise cancel Patricia, Inc.'s title.
WHEREFORE, the Court AFFIRMS the decision promulgated on June 25, 2010 by the Court of Appeals in CA-G.R. CV No. 86735;
and ORDERS the petitioners to pay the costs of suit.
SO ORDERED.

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G.R. No.

175151 September 21, 2011

TOBIAS SELGA and CEFERINA GARANCHO SELGA, Petitioners,

LEONARDO-DE CASTRO, J.:

The following facts are not disputed:

Respondent prayed that RTC-Branch 55 render judgment:

RTC-Branch 55 finally disposed:

Please be informed that your claim re redemption is devoid of complete merit.

The Court of Appeals decreed in the end:

We find merit in the instant Petition.

(a) finality of the former judgment;

(c) it must be a judgment on the merits; and

Finally, there is identity of causes of action.

G.R. No. 189121 July 31, 2013

AMELIA GARCIA-QUIAZON, JENNETH QUIAZON and MARIA JENNIFER QUIAZON, Petitioners,

Eliseo died intestate on 12 December 1992.

The Court’s Ruling

We find the petition bereft of merit.

(a) The jurisdictional facts;

G.R. No. 173783, June 17, 2015

RIVIERA GOLF CLUB, INC., Petitioner, v. CCA HOLDINGS, B.V., Respondent.

The RTC Ruling

CCA Holdings appealed the dismissal of its complaint to the CA.

First, there is no identity of causes of action in the two civil cases.

The Case for the Respondent

As defined by the parties, the issues before us are limited to:

We find the petition meritorious.

The Second Complaint is Barred by Res Judicata

All the Elements of Res Judicata are Present

We held in this regard in Stilianopulos v. The City of Legaspi:13cralawlawlibrary

The "Non-Waiver Clause" Stipulated

We do not see any merit in this contention.

G.R. No. 201892, July 22, 2015

NORLINDA S. MARILAG, Petitioner, v. MARCELINO B. MARTINEZ, Respondent.

The Court A Quo's Ruling

The Issue Before the Court

The Court's Ruling

The petition lacks merit.

A preliminary injunction was granted and served on all the defendants.

(3) Approved Plan PSD-38540; and

(4) Approved Subdivision Plan PCS-3290 for Ricardo Manotok.

WHEREFORE, it is hereby ORDERED:

In other words, did the CA err m dismissing the petitioners' complaint?

Ruling of the Court

The appeal lacks merit.

THE CAUSE OF ACTION

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