OROPEZA v ALLIED BANK

FACTS:
Respondent Allied Bank extended a loan with interest at 22% per annum, to petitioners Oropeza
Marketing Corporation (OMC) and the spouses Rogaciano and Imelda Oropeza. The loan was payable at
a monthly amortization of P20,000, subject to a penalty of 1.0% per month in case of non-payment, until
the obligation was fully paid. To secure this obligation, petitioners executed Promissory Note in Allied
Banks favor. The spouses Oropeza executed a Continuing Guaranty/Comprehensive Surety Agreement
where they bound themselves jointly and severally with petitioner corporation to pay said obligation
without need of demand in the aggregate amount of P840,000. As additional security for the loan, they
also executed a Real Estate Mortgage over their properties. Due to financial constraints, petitioners
allegedly defaulted and reneged on their obligation. Thus, Allied Bank filed a collection suit with an
application for a writ of preliminary attachment before the RTC.
Pending application of writ of preliminary attachment, Allied Bank discovered that the Oropeza spouses
had executed an Absolute Deed of Sale with Assumption of Mortgage in favor of Solid Gold Commercial
Corporation, covering most of petitioner spouses real properties, including those mortgaged to
respondent.
Allied Bank then filed a complaint for the annulment of said Deed of Sale, before the RTC likewise
instituted a separate criminal complaint for fraudulent insolvency under Article 314 of the RPC against
petitioner spouses. Subsequently, the court granted application for attachment and fixed the attachment
bond but Allied Bank failed to comply and moved that service of summons be held in abeyance.
RTC dismissed the respondents complaint on the ground of litis pendentia ruling further that:
While it is true that the decision of RTC, Sala 9 in pending appeal, it is equally true that there is identity
of parties and identity of cause of action. This is obvious from the pleadings and the documents attached
as annexes in this case. The relief being sought; that is for the defendant to pay the plaintiff, is the same in
both cases.
Respondents appealed to the CA, the RTC decision is reversed and set aside.

ISSUE:
Whether or not the decision of the Court of Appeals applying res judicata is proper

RULING:
Yes. The SC granted the petition and the order of the RTC dismissing respondent Allied Bank complaint
is REINSTATED with the MODIFICATION that the case is not dismissed but is deemed concluded on
the ground of res judicata, i.e., as conclusiveness of judgment.

The principle of res judicata has two aspects, namely: (a) bar by prior judgment as enunciated in Rule 39,
Section 49 (b)[20] of the 1997 Rules of Civil Procedure; and (b) conclusiveness of judgment which is
contained in Rule 39, Section 47 (c).
There is bar by prior judgment when, as between the first case where the judgment was rendered and the
second case that is sought to be barred, there is identity of parties, subject matter, and causes of action. In
this instance, the judgment in the first case constitutes an absolute bar to the second action. Otherwise put,
the judgment or decree of the court of competent jurisdiction on the merits concludes the litigation
between the parties, as well as their privies, and constitutes a bar to a new action or suit involving the
same cause of action before the same or any other tribunal.
But where there is identity of parties in the first and second cases, but no identity of causes of action, the
first judgment is conclusive only as to those matters actually and directly controverted and determined
and not as to matters merely involved therein. This is the concept of res judicata known as conclusiveness
of judgment. Stated differently, any right, fact, or matter in issue directly adjudicated or necessarily
involved in the determination of an action before a competent court in which judgment is rendered on the
merits is conclusively settled by the judgment therein and cannot again be litigated between the parties
and their privies whether or not the claim, demand, purpose, or subject matter of the two actions is the
same.
We must focus on whether identity of parties, subject matter, and causes of action are present in the two
civil cases below. Should identity of parties, subject matter, and causes of action be shown in the two
cases, then res judicata in its aspect as a bar by prior judgment would apply. If as between the two cases,
only identity of parties can be shown, but not identical causes of action, then res judicata as
conclusiveness of judgment applies.

However, the rule on identity of parties does not require absolute, but only substantial identity of parties
The rule is that a party may not evade the application of res judicata by simply including additional
parties in subsequent litigation or by excluding parties in the later case certain parties in the previous suit.
With respect to identity of subject matter, this is included in identity of causes of action. When there is
identity of the cause or causes of action, there is necessarily identity of subject matter. But the converse is
not true, for different causes of action may exist regarding the same subject matter, in which case, the
conclusiveness of judgment shall be only with regard to the questions directly and actually put in issue
and decided in the first case

The test to determine the identity of causes of action is to consider whether the same evidence would
sustain both causes of action. We find that in Civil Case No. 19325-88, Allied Bank will have to present
evidence showing the existence of the loan and petitioners failure to comply with their bounden duty to
pay such loan in accordance with the terms of the promissory note executed by petitioners. However, in
Civil Case No. 19634-89, respondents evidence must establish and prove its allegations to the effect that:
(a) petitioners secured a loan from it; (b) said loan was secured by a promissory note and a mortgage over
properties owned by the Oropezas; (c) petitioners failed to pay their debt; and (d) petitioners sold the
mortgaged properties with intent to defraud respondent bank.

The evidence to support Allied Banks cause of action in Civil Case No. 19325-88 is included in and
forms part of the evidence needed by respondent bank to support its cause of action in Civil Case No.
19634-89. The converse, however, not true. The evidence needed in Civil Case No. 19634-89 does not
necessarily form part of the evidence needed by respondent in Civil Case No. 19325-88. Accordingly, we
find that the evidence to sustain the respective causes of action in the two cases is not exactly the same.
Perforce, we must rule that there is no identity between the causes of action in Civil Case No. 19325-88
and Civil Case No. 19634-89.

There being substantial identity of parties but no identity of causes of action, the applicable aspect of res
judicata in the instant case is conclusiveness of judgment. There is conclusiveness of judgment only as to
the matters actually determined by the trial court in Civil Case No. 19634-89, as affirmed by the Court of
Appeals in CA-G.R. CV No. 41986. These include the findings that: (1) the promissory note relied upon
by respondent bank is spurious; and (2) that the loan obligation of the Oropeza spouses has been settled
and paid.
Res judicata is founded on the principle that parties ought not to be permitted to litigate the same issue
more than once. Hence, when a right or fact has been judicially tried and established by a court of
competent jurisdiction, or an opportunity for such trial has been given, the judgment of the court - - so
long as it remains unreversed - - is conclusive upon the parties and those in privity with them in law or
estate.[36] It having been determined with finality in CA-G.R. CV No. 41986 that the debt of the
Oropezas has been settled, respondents cause of action in Civil Case No. 19325-88 must be deemed
extinguished.

WHEREFORE, the petition is GRANTED. The decision of the Court of Appeals as well as its resolution
denying herein petitioners motion for reconsideration are hereby SET ASIDE.
The findings of the Regional Trial Court. as affirmed by the appellate court in shall be conclusive upon
the parties. The order of the Regional Trial Court dismissing respondent Allied Banking Corporations
complaint is hereby REINSTATED with the MODIFICATION that the case is not dismissed but is
deemed concluded on the ground of res judicata, i.e., as conclusiveness of judgment. Costs against
respondent.
 TUNG HO v TING GUAN
FACTS:
Tung Ho is a foreign corporation organized under the laws of Taiwan, Republic of China. On the other
hand, respondent Ting Guan Trading Corp. (Ting Guan) is a domestic corporation organized under the
laws of the Philippines. Ting Guan obligated itself under a contract of sale to deliver heavy metal scrap
iron and steel to Tung Ho. Subsequently, Tung Ho filed a request for arbitration before the ICC in
Singapore after Ting Guan failed to deliver the full quantity of the promised heavy metal scrap iron and
steel.6
The ICC ruled in favor of Tung Ho and ordered Ting Guan to pay Tung Ho actual damages, costs of
arbitration and lawyer’s fees.
Tung Ho filed an action against Ting Guan for the recognition and enforcement of the arbitral award
before the Regional Trial Court (RTC) of Makati.Ting Guan moved to dismiss the case based on Tung
Ho’s lack of capacity to sue and for prematurity. Ting Guan subsequently filed a supplemental motion to
dismiss based on improper venue. Ting Guan argued that the complaint should have been filed in Cebu
where its principal place of business was located.
RTC proceeding
The RTC denied Ting Guan’s MTD, Ting Guan moved to reconsider the order and raised the RTC’s
alleged lack of jurisdiction over its person as additional ground for the dismissal of the complaint. Ting
Guan insisted that Ms. Fe Tejero, on whom personal service was served, was not its corporate secretary
and was not a person allowed under Section 11, Rule 14 of the Rules of Court to receive a summons. It
also asserted that Tung Ho cannot enforce the award in the Philippines without violating public policy as
Taiwan is not a signatory to the New York Convention. The RTC denied the motion and ruled that Ting
Guan had voluntarily submitted to the court’s jurisdiction when it raised other arguments apart from lack
of jurisdiction in its motion to dismiss.
CA proceedings

Ting Guan filed a petition for certiorari before the CA with an application for the issuance of a temporary
restraining order and a writ of preliminary injunction. Subsequently, Tung Ho argued that a Rule 65
petition is not the proper remedy to assail the denial of a MTD and pointed out that the proper recourse
for Ting Guan was to file an answer and to subsequently appeal the case. It also posited that beyond the
reglementary period for filing an answer, Ting Guan was barred from raising other grounds for the
dismissal of the case. Tung Ho also claimed that the RTC acquired jurisdiction over the person of Ting
Guan since the return of service of summons expressly stated that Tejero was a corporate secretary. The
CA dismissed the complaint for lack of jurisdiction over the person of Ting Guan. The CA held that Tung
Ho failed to establish that Tejero was Ting Guan’s corporate secretary. The CA also ruled that a petition
for certiorari is the proper remedy to assail the denial of a motion to dismiss if the ground raised in the
motion is lack of jurisdiction. Furthermore, any of the grounds for the dismissal of the case can be raised
in a motion to dismiss provided that the grounds were raised before the filing of an answer. The CA
likewise ruled that Tung Ho properly filed the complaint before the RTC-Makati.
Subsequently, both parties moved to partially reconsider the CA decision. Tung Ho reiterated that there
was proper service of summons. On the other hand, Ting Guan sought to modify the CA decision with
respect to the proper venue of the case.
The CA denied Ting Guan’s motion for partial reconsideration.
ISSUES:
1) Whether the present petition is barred by res judicata; and
2) Whether the trial court acquired jurisdiction over the person of Ting Guan, specifically:
a) Whether Tejero was the proper person to receive the summons; and
b) Whether Ting Guan made a voluntary appearance before the trial court.

RULING:
We find the petition meritorious.
1) The Court is not precluded from ruling on the jurisdictional issue raised in the petition and the
petition is not barred by res judicata

Res judicata refers to the rule that a final judgment or decree on the merits by a court of competent
jurisdiction is conclusive on the rights of the parties or their privies in all later suits on all points and
matters determined in the former suit. For res judicata to apply, the final judgment must be on the merits
of the case which means that the court has unequivocally determined the parties’ rights and obligations
with respect to the causes of action and the subject matter of the case. Contrary to Ting Guan’s position,
our ruling in G.R. No. 176110 does not operate as res judicata on Tung Ho’s appeal; G.R. No. 176110 did
not conclusively rule on all issues raised by the parties in this case so that this Court would now be barred
from taking cognizance of Tung Ho’s petition. Our disposition in G.R. No. 176110 only dwelt on
technical or collateral aspects of the case, and not on its merits. Specifically, we did not rule on whether
Tung Ho may enforce the foreign arbitral award against Ting Guan in that case.
The appellate court cannot be ousted of jurisdiction until it finally disposes of the case, thus,Tung Ho’s
timely filing of a motion for reconsideration and of a petition for review on certiorari prevented the July
5, 2006 decision from attaining finality

2) Yes the Court acquired jurisdiction over the person of Ting Guan

a) Tejero was not the proper person to receive the summons.

Nonetheless, we see no reason to disturb the lower courts’ finding that Tejero was not a corporate
secretary and, therefore, was not the proper person to receive the summons under Section 11, Rule 14
of the Rules of Court. This Court is not a trier of facts; we cannot re-examine, review or re-evaluate
the evidence and the factual review made by the lower courts. In the absence of compelling reasons,
 we will not deviate from the rule that factual findings of the lower courts are final and binding on this
Court.

b) Ting Guan voluntarily appeared before the trial court

However, we cannot agree with the legal conclusion that the appellate court reached, given the
established facts. To our mind, Ting Guan voluntarily appeared before the trial court in view of the
procedural recourse that it took before that court. Its voluntary appearance is equivalent to service of
summons.

Instead of filing an answer, the defendant may opt to file a motion for reconsideration. Only after the trial.
We cannot allow and simply passively look at Ting Guan’s blatant disregard of the rules of procedure in
the present case. The Rules of Court only allows the filing of a motion to dismiss once. Ting Guan’s filing
of successive motions to dismiss, under the guise of "supplemental motion to dismiss" or "motion for
reconsideration", is not only improper but also dilatory. Ting Guan’s belated reliance on the improper
service of summons was a mere afterthought, if not a bad faith ploy to avoid the foreign arbitral award’s
enforcement which is still at its preliminary stage after the lapse of almost a decade since the filing of the
complaint.
To now recognize the finality of the Resolution of Ting Guan petition (G.R. No. 176110) based on its
entry of judgment and to allow it to foreclose the present meritorious petition of Tung Ho, would of
course cause unfair and unjustified injury to Tung Ho. First, as previously mentioned, the Ting Guan
petition did not question or assail the full merits of the CA decision. It was Tung Ho, the party aggrieved
by the CA decision, who substantially questioned the merits of the CA decision in its petition; this
petition showed that the CA indeed committed error and Tung Ho’s complaint before the RTC should
properly proceed. Second, the present case is for the enforcement of an arbitral award involving millions
of pesos. Tung Ho already won in the foreign arbitration and the present case is simply for the
enforcement of this arbitral award in our jurisdiction. Third, and most importantly, Tung Ho properly and
timely availed of the remedies available to it under the Rules of Court, which provide that filing and
pendency of a motion for reconsideration stays the execution of the CA judgment. Therefore, at the time
of the entry of judgment in G.R. No. 176110 in the Supreme Court on January 8, 2008, the CA decision
which the Court affirmed was effectively not yet be final.
According to this ruling, the motu proprio recall or setting aside of the entry of final judgment was proper
and "entirely consistent with the inherent power of every court inter alia to amend and control its process
and orders so as to make them conformable to law and justice [Sec. 5(g), Rule 135, Rules of Court,]. That
the recall has in fact served to achieve a verdict consistent with law and justice is clear from the judgment
subsequently rendered on the merits." This course of action is effectively what the Court undertook today,
adapted of course to the circumstances of the present case.

In light of these premises, we hereby REVERSE and SET ASIDE the 2006 decision and the 2008
resolution of the Court of Appeals in hereby ordered reinstated. Let the records of this case be remanded
to the court of origin for further proceedings. No costs.
 LEE BUN TING v ALIGAEN
FACTS:
In a previous cases [G. R. No. L-5996,"Rafael Dinglasan, et al. vs. Lee Bun Ting, et al.] decided by the
SC with the same set of private parties, it was found that private respondents sold to herein petitioner a
parcel of land located in Roxas City, Capiz through a conditional sale. Lee, the buyer, on the other hand
avers that it was an absolute sale. Both trial court and CA ruled in favor of buyer Lee. The SC found that
Lee is normally not allowed to purchase the property on the count of the constitutional prohibition
(Section 5. Save in cases of hereditary succession, no private agricultural land shall be transferred or
assigned except to individuals, corporations, or associations qualified to acquire or hold lands of the
public domain But since it was also found out that the buyers (private respondents) are in pari delicto for
selling the property in spite of the constitutional prohibition they are proscribed from assailing the sale
made between them and herein private respondents.
12 years after the above mentioned case was promulgated, the present case for the recovery of the lot was
instituted with the same contention of the respondents Dinglasan that the sale should be null and void on
account of the constitutional prohibition. A motion to dismiss was filed by petitioners in this case on the
ground of res judicata. An opposition thereto was filed by plaintiffs, with the averment that the decision in
the prior case "cannot be pleaded in bar of the instant action because of new or additional facts or grounds
of recovery and because of change of law or jurisprudence. The Court of Appeals denied the motion to
dismiss.
ISSUE:
Whether or not the motion to dismiss should be granted
RULING:
The SC ruled in the Affirmative. The decision of this Court in G. R. No. L-5996,"Rafael Dinglasan, et al.
vs. Lee Bun Ting, et al."constitutes a bar to Civil Case No. V-3064 before the respondent court. Said Civil
case, therefore, should have been dismissed because it is a mere relitigation of the same issues previously
adjudged with finality, way back in 1956, between the same parties or their privies and concerning the
same subject matter. We have consistently held that the doctrine of res judicata applies where, between a
pending action and one which has been finally and definitely settled, there is Identity of parties, subject
matter and cause of action. We find that in the ultimate analysis, Civil Case No. V-3064 is but an attempt
to reopen the issues which were resolved in the previous case. Contrary to the contentions of private
respondents, there has been no change in the facts or in the conditions of the parties. Posterior changes in
the doctrine of this Court cannot retroactively be applied to nullify a prior final ruling in the same
proceeding where the prior adjudication was had, whether the case should be civil or criminal in nature.
The determination of the questions of fact and of law by this Court on June 27, 1956 in case No. L-5996
has become the law of the case, and may not now be disputed or relitigated by a reopening of the same
questions in a subsequent litigation between the same parties and their privies the same subject matter.