Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No.

181970 August 3, 2010

BERNARDO DE LEON, Petitioner, vs. PUBLIC ESTATES AUTHORITY substituted by the CITY OF PARAAQUE, RAMON ARELLANO, JR., RICARDO PENA and REYMUNDO ORPILLA, Respondents. x - - - - - - - - - - - - - - - - - - - - - - -x G.R. No. 182678 PUBLIC ESTATES AUTHORITY (now PHILIPPINE RECLAMATION AUTHORITY), substituted by the CITY OF PARAAQUE, Petitioner, vs. HON. SELMA PALACIO ALARAS, in her capacity as the Acting Presiding Judge of Branch 135, Regional Trial Court of Makati City, and BERNARDO DE LEON. Respondents. DECISION PERALTA, J.: Before the Court are two consolidated petitions. G.R. No. 181970 is a petition for review on certiorari under Rule 45 of the Rules of Court filed by Bernardo de Leon seeking the reversal and setting aside of the Decision1 of the Court of Appeals (CA), dated November 21, 2007, in CA-G.R. SP No. 90328 which dismissed his petition for certiorari. De Leon also assails the CA Resolution2 dated March 4, 2008 denying his Motion for Reconsideration. On the other hand, G.R. No. 182678 is a petition for certiorari under Rule 65 of the Rules of Court filed by the Public Estates Authority (PEA)3 seeking the nullification of the Orders dated December 28, 2007 and March 4, 2008 of the Regional Trial Court (RTC) of Makati City, Branch 135 in Civil Case No. 93-143. The pertinent factual and procedural antecedents of the case, as summarized by the CA, are as follows: On [January 15, 1993], petitioner Bernardo De Leon ("De Leon") filed a Complaint for Damages with Prayer for Preliminary Injunction before the Regional Trial Court [RTC] of Makati City, raffled to Branch 135, against respondent Public Estates Authority ("PEA"), a government-owned corporation, as well as its officers, herein private respondents Ramon Arellano, Jr., Ricardo Pena and Reymundo Orpilla. The suit for damages hinged on the alleged unlawful destruction of De Leons fence and houses constructed on Lot 5155 containing an area of 11,997 square meters, situated in San Dionisio, Paraaque, which De Leon claimed has been in the possession of his family for more than 50 years. Essentially, De Leon prayed that one, lawful possession of the land in question be awarded to him; two, PEA be ordered to pay damages for demolishing the improvements constructed on Lot 5155; and, three, an injunctive relief be issued to enjoin PEA from committing acts which would violate his lawful and peaceful possession of the subject premises.

The court a quo found merit in De Leons application for writ of preliminary injunction and thus issued the Order dated 8 February 1993, pertinent portions of which read: After a careful consideration of the evidence presented and without going into the actual merits of the case, this Court finds that plaintiff (De Leon) has duly established by preponderance of evidence that he has a legal right over the subject matter of the instant case and is entitled to the injunctive relief demanded for and may suffer irreparable damage or injury if such right is not protected by Law [Rules (sic) 58, Section 3 of the Revised (Rules of Court)]. Premises considered upon plaintiffs (De Leons) filing of a bond in the amount of P500,000.00, let a writ of preliminary injunction be issued against the defendants, their agents, representatives and other persons (PEA and its officers) acting for and in their behalf are hereby enjoined from disturbing the peaceful possession of plaintiff (De Leon) and his co-owners over Lot 5155 and further, from destroying and/or removing whatever other improvements thereon constructed, until further orders of this Court. SO ORDERED. (Emphasis supplied) PEA sought recourse before the Supreme Court through a Petition for Certiorari with Prayer for a Restraining Order, ascribing grave abuse of discretion against the court a quo for issuing injunctive relief. The Petition was later referred to this Court for proper determination and disposition, and was docketed as CA-G.R. SP No. 30630. On 30 September 1993, the Ninth Division of this Court rendered a Decision discerning that the court a quo did not act in a capricious, arbitrary and whimsical exercise of power in issuing the writ of preliminary injunction against PEA. The Ninth Division ruled that the court a quo was precisely careful to state in its Order that it was "without going into the actual merits of the case" and that the words "plaintiff (De Leon) and his co-owners" were used by the court a quo rather "loosely and did not intend it to be an adjudication of ownership." Unfazed, PEA appealed to the Supreme Court via a Petition for Certiorari insisting that Lot 5155 was a salvage zone until it was reclaimed through government efforts in 1982. The land was previously under water on the coastline which reached nine to twenty meters deep. In 1989, PEA started constructing R-1 Toll Expressway Road for the Manila-Cavite Coastal Road, which project directly traversed Lot 5155. PEA argued that the documentary evidence presented by De Leon to bolster his fallacious claim of possession and ownership were procured only in 1992, thus negating his very own allegation that he and his predecessors-in-interest have been in occupation since time immemorial. Ruling squarely on the issue adduced before it, the Supreme Court declared that Lot 5155 was a public land so that De Leons occupation thereof, no matter how long ago, could not confer ownership or possessory rights. Prescinding therefrom, no writ of injunction may lie to protect De Leons nebulous right of possession. Accordingly, in its Decision dated 20 November 2000, the Supreme Court disposed of the controversy in this wise: WHEREFORE, the Court REVERSES the decision of the Court of Appeals in CA-G.R. SP No. 30630, and DISMISSES the complaint in Civil Case No. 93-143 of the Regional Trial Court, Makati. No costs. SO ORDERED. The aforesaid Decision became final and executory as no motion for reconsideration was filed. In due course, PEA moved for the issuance of a writ of execution praying that De Leon and

persons claiming rights under him be ordered to vacate and peaceably surrender possession of Lot 5155. Acting on PEAs motion, the court a quo issued the first assailed Order dated 15 September 2004, viz: Acting on the "Motion For Issuance Of Writ of Execution" filed by defendant Public Estate[s] Authority, and finding the same to be impressed with merit, the same is GRANTED. Let a Writ of Execution issue directing plaintiff, his agents, principals, successors-in-interest and all persons claiming rights under him to vacate and peaceably turn over possession of Lot 5155 to defendant Public Estate[s] Authority. SO ORDERED. As could well be expected, De Leon moved for reconsideration thereof and quashal of the writ of execution. He adamantly insisted that the court a quos Order for the issuance of the writ of execution completely deviated from the dispositive portion of the Supreme Courts Decision dated 20 November 2000 as it did not categorically direct him to surrender possession of Lot 5155 in favor of PEA. However, both motions met the same fate as these were denied by the court a quo in the second disputed Order dated 29 April 2005.4 Dissatisfied, De Leon filed another Motion for Reconsideration dated July 1, 2005, but the same was denied by the RTC in an Order dated July 27, 2005. De Leon then filed a special civil action for certiorari with the CA assailing the September 15, 2004 and April 29, 2005 Orders of the RTC of Makati City. This was docketed as CA-G.R. SP No. 90328. In the same proceeding, De Leon filed an Urgent-Emergency Motion for Temporary Restraining Order (TRO) and Issuance of Writ of Preliminary Injunction but the same was denied by the CA in a Resolution dated April 24, 2006. Subsequently, De Leon filed a second special civil action for certiorari with the CA seeking to annul and set aside the same RTC Orders dated September 15, 2004 and April 29, 2005, as well as the RTC Order of July 27, 2005. The case was docketed as CA-G.R. SP No. 90984. On July 26, 2006, PEA filed a Very Urgent Motion for Issuance of Writ of Demolition5 praying that the RTC issue a Special Order directing De Leon and persons claiming under him to remove all improvements erected inside the premises of the subject property and, in case of failure to remove the said structures, that a Special Order and Writ of Demolition be issued directing the sheriff to remove and demolish the said improvements. On October 11, 2006, the RTC issued an Order6 holding in abeyance the Resolution of PEAs Motion. PEA filed a Motion for Reconsideration,7 but it was denied by the RTC in an Order8 dated January 12, 2007. On February 27, 2007, PEA filed an Omnibus Motion9 to dismiss or, in the alternative, resolve the petitions in CA-G.R. SP No. 90328 and CA-G.R. SP No. 90984. In its Decision10 dated March 21, 2007, the CA dismissed De Leons petition in CA-G.R. SP No. 90984 on the ground of forum shopping. Subsequently, on November 21, 2007, the CA also dismissed De Leons petition in CA-G.R. SP No. 90328 holding that an earlier decision promulgated by the Supreme Court, finding the

subject property to be public and that De Leon has no title and no clear legal right over the disputed lot, has already attained finality.11 De Leon filed a Motion for Reconsideration, but the CA denied it via its Resolution12 dated March 4, 2008. Thereafter, PEA filed an Urgent Motion to Resolve (Re: Very Urgent Motion for Issuance of Writ of Demolition).13 On December 28, 2007, the RTC issued an Order14 holding in abeyance the resolution of PEAs Motion pending receipt by the trial court of the entry of judgment pertaining to CA-G.R. SP No. 90328. PEA filed a Motion for Reconsideration.15 In its Order dated March 4, 2008, the RTC issued an Order denying PEAs Motion for Reconsideration. On April 23, 2008, De Leon filed the present petition for review on certiorari, docketed as G.R. No. 181970, assailing the November 21, 2007 Decision of the CA. Subsequently, on May 15, 2008, PEA, on the other hand, filed the instant special civil action for certiorari, docketed as G.R. No. 182678, questioning the Orders of the RTC of Makati City, dated December 28, 2007 and March 4, 2008. In G.R. No. 181970, De Leon questions the Decision of the CA on the following grounds: (a) he can only be removed from the subject land through ejectment proceedings; (b) the Decision of this Court in G.R. No. 112172 merely ordered the dismissal of De Leons complaint for damages in Civil Case No. 93-143; and (c) even though petitioner is not the owner and has no title to the subject land, mere prior possession is only required for the establishment of his right. In G.R. No. 182678, the sole issue raised is whether respondent judge committed grave abuse of discretion in issuing the assailed Orders which held in abeyance the resolution of PEAs Motion for the Issuance of a Writ of Demolition. On February 25, 2009, PEA and the City of Paraaque filed a Joint Motion for Substitution stating that PEA had transferred its ownership and ceded its interests over the subject property to the City of Paraaque as full payment for all of the formers real property tax liabilities. As a consequence, the movants prayed that PEA be substituted by the City of Paraaque as petitioner in G.R. No. 182678 and respondent in G.R. No. 181970.16 In a Resolution17 dated on October 14, 2009, this Court granted the Motion for Substitution filed by PEA and the City of Paraaque. The issues raised in the present petitions boil down to the question of whether PEA is really entitled to possess the subject property and, if answered in the affirmative, whether the RTC should proceed to hear PEAs Motion for the Issuance of a Writ of Demolition. The Court rules for PEA. The question of ownership and rightful possession of the subject property had already been settled and laid to rest in this Courts Decision dated November 20, 2000 in G.R. No. 112172 entitled, Public Estates Authority v. Court of Appeals (PEA v. CA).18 In the said case, the Court ruled thus: The issue raised is whether respondent and his brothers and sisters were lawful owners and possessors of Lot 5155 by mere claim of ownership by possession for a period of at least fifty (50) years.

The Court of Appeals ruled that respondent Bernardo de Leon and his brothers and sisters were lawful owners and possessors of Lot 5155 entitled to protection by injunction against anyone disturbing their peaceful possession of said Lot. The ruling is erroneous. An applicant seeking to establish ownership of land must conclusively show that he is the owner in fee simple, for the standing presumption is that all lands belong to the public domain of the State, unless acquired from the Government either by purchase or by grant, except lands possessed by an occupant and his predecessors since time immemorial, for such possession would justify the presumption that the land had never been part of the public domain, or that it had been private property even before the Spanish conquest. In this case, the land in question is admittedly public. The respondent Bernardo de Leon has no title thereto at all. His claim of ownership is based on mere possession by himself and his predecessors-in-interests, who claim to have been in open, continuous, exclusive and notorious possession of the land in question, under a bona fide claim of ownership for a period of at least fifty (50) years. However, the survey plan for the land was approved only in 1992, and respondent paid the realty taxes thereon on October 30, 1992, shortly before the filing of the suit below for damages with injunction. Hence, respondent must be deemed to begin asserting his adverse claim to Lot 5155 only in 1992. More, Lot 5155 was certified as alienable and disposable on March 27, 1972, per certificate of the Department of Environment and Natural Resources. It is obvious that respondents possession has not ripened into ownership. xxxx Consequently, respondent De Leon has no clear legal right to the lot in question, and a writ of injunction will not lie to protect such nebulous right of possession. x x x19 The Court does not subscribe to De Leons argument that the issues of ownership and possession of the subject lot should not have been taken up by the court on the ground that his complaint is only for damages. De Leon must be aware that his action for damages is anchored on his claim that he owns and possesses the subject property.20 On this basis, it would be inevitable for the court to discuss the issues of whether he, in fact, owns the disputed property and, as such, has the right to possess the same. Moreover, it is clear from this Courts Decision in PEA v. CA that the main issue resolved therein was "whether respondent [De Leon] and his brothers and sisters were the lawful owners and possessors of Lot 5155 by mere claim of ownership by possession for a period of at least fifty (50) years." De Leon insists that what this Court did in PEA v. CA was to simply dismiss his complaint for damages and nothing more, and that the RTC erred and committed grave abuse of discretion in issuing a writ of execution placing PEA in possession of the disputed property. He insists that he can only be removed from the disputed property through an ejectment proceeding. The Court is not persuaded. As a general rule, a writ of execution should conform to the dispositive portion of the decision to be executed; an execution is void if it is in excess of and beyond the original judgment or award.21 The settled general principle is that a writ of execution must conform strictly to every essential particular of the judgment promulgated, and may not vary the terms of the judgment it seeks to enforce, nor may it go beyond the terms of the judgment sought to be executed.22 However, it is equally settled that possession is an essential attribute of ownership.23 Where the ownership of a parcel of land was decreed in the judgment, the delivery of the possession of the land should be considered included in the decision, it appearing that the defeated partys claim to the possession thereof is based on his claim of ownership.24 Furthermore, adjudication of ownership would include the delivery of possession if the defeated party has not shown any right to possess the land independently of his claim of ownership which was rejected.25 This is

precisely what happened in the present case. This Court had already declared the disputed property as owned by the State and that De Leon does not have any right to possess the land independent of his claim of ownership. In addition, a judgment for the delivery or restitution of property is essentially an order to place the prevailing party in possession of the property.26 If the defendant refuses to surrender possession of the property to the prevailing party, the sheriff or other proper officer should oust him.27 No express order to this effect needs to be stated in the decision; nor is a categorical statement needed in the decision that in such event the sheriff or other proper officer shall have the authority to remove the improvements on the property if the defendant fails to do so within a reasonable period of time.28 The removal of the improvements on the land under these circumstances is deemed read into the decision, subject only to the issuance of a special order by the court for the removal of the improvements.29 It bears stressing that a judgment is not confined to what appears upon the face of the decision, but also those necessarily included therein or necessary thereto.30 In the present case, it would be redundant for PEA to go back to court and file an ejectment case simply to establish its right to possess the subject property. Contrary to De Leons claims, the issuance of the writ of execution by the trial court did not constitute an unwarranted modification of this Courts decision in PEA v. CA, but rather, was a necessary complement thereto. Such writ was but an essential consequence of this Courts ruling affirming the nature of the subject parcel of land as public and at the same time dismissing De Leons claims of ownership and possession. To further require PEA to file an ejectment suit to oust de Leon and his siblings from the disputed property would, in effect, amount to encouraging multiplicity of suits. De Leon also contends that there "was never any government infrastructure project in the subject land, much less a Manila-Cavite Coastal Road traversing it, at any time ever since, until now" and that "allegations of a government project in the subject land and of such Road traversing the subject land have been downright falsities and lies and mere concoctions of respondent PEA."31 However, this Court has already ruled in PEA v. CA that "it is not disputed that there is a government infrastructure project in progress traversing Lot 5155, which has been enjoined by the writ of injunction issued by the trial court." In any case, De Leons argument that there was no government infrastructure project in the subject property begs the issue of ownership and rightful possession. The subject lot was properly identified. There is no dispute as to its exact location. Hence, whether or not there is a government project existing within the premises or that which traverses it is not relevant to the issue of whether petitioner is the owner of the disputed lot and, therefore, has legal possession thereof. As to whether or not the RTC committed grave abuse of discretion in holding in abeyance the resolution of PEAs Motion for the Issuance of a Writ of Demolition, Section 7,32 Rule 65 of the Rules of Court provides the general rule that the mere pendency of a special civil action for certiorari commenced in relation to a case pending before a lower court or court of origin does not stay the proceedings therein in the absence of a writ of preliminary injunction or temporary restraining order. It is true that there are instances where, even if there is no writ of preliminary injunction or temporary restraining order issued by a higher court, it would be proper for a lower court or court of origin to suspend its proceedings on the precept of judicial courtesy.33 The principle of judicial courtesy, however, remains to be the exception rather than the rule. As held by this Court in Go v. Abrogar,34 the precept of judicial courtesy should not be applied indiscriminately and haphazardly if we are to maintain the relevance of Section 7, Rule 65 of the Rules of Court. Indeed, in the amendments introduced by A.M. No. 07-7-12-SC, a new paragraph is now added to Section 7, Rule 65, which provides as follows:

The public respondent shall proceed with the principal case within ten (10) days from the filing of a petition for certiorari with a higher court or tribunal, absent a temporary restraining order or a preliminary injunction, or upon its expiration. Failure of the public respondent to proceed with the principal case may be a ground for an administrative charge.
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While the above quoted amendment may not be applied in the instant case, as A.M. No. 07-712-SC was made effective only on December 27, 2007, the provisions of the amendatory rule clearly underscores the urgency of proceeding with the principal case in the absence of a temporary restraining order or a preliminary injunction. This urgency is even more pronounced in the present case, considering that this Courts judgment in PEA v. CA, finding that De Leon does not own the subject property and is not entitled to its possession, had long become final and executory. As a consequence, the writ of execution, as well as the writ of demolition, should be issued as a matter of course, in the absence of any order restraining their issuance. In fact, the writ of demolition is merely an ancillary process to carry out the Order previously made by the RTC for the execution of this Courts decision in PEA v. CA. It is a logical consequence of the writ of execution earlier issued. Neither can De Leon argue that he stands to sustain irreparable damage. The Court had already determined with finality that he is not the owner of the disputed property and that he has no right to possess the same independent of his claim of ownership. Furthermore, the Order of the RTC holding in abeyance the resolution of PEAs Motion for the Issuance of a Writ of Demolition also appears to be a circumvention of the provisions of Section 5, Rule 58 of the Rules of Court, which limit the period of effectivity of restraining orders issued by the courts. In fact, the assailed Orders of the RTC have even become more potent than a TRO issued by the CA because, under the Rules of Court, a TRO issued by the CA is effective only for sixty days. In the present case, even in the absence of a TRO issued by a higher court, the RTC, in effect, directed the maintenance of the status quo by issuing its assailed Orders. Worse, the effectivity of the said Orders was made to last for an indefinite period because the resolution of PEAs Motion for the Issuance of a W rit of Demolition was made to depend upon the finality of the judgment in G.R. No. 181970. Based on the foregoing, the Court finds that the RTC committed grave abuse of discretion in issuing the assailed Orders dated December 28, 2007 and March 4, 2008.
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Finally, the Court reminds the De Leon that it does not allow the piecemeal interpretation of its Decisions as a means to advance his case. To get the true intent and meaning of a decision, no specific portion thereof should be isolated and read in this context, but the same must be considered in its entirety.35 Read in this manner, PEAs right to possession of the subject property, as well as the removal of the improvements or structures existing thereon, fully follows after considering the entirety of the Courts decision in PEA v. CA. This is consistent with the provisions of Section 10, paragraphs (c) and (d), Rule 39 of the Rules of Court, which provide for the procedure for execution of judgments for specific acts, to wit: SECTION 10. Execution of judgments for specific act. xxxx (c) Delivery or restitution of real property. - The officer shall demand of the person against whom the judgment for the delivery or restitution of real property is rendered and all persons claiming rights under him to peaceably vacate the property within the three (3) working days, and restore possession thereof to the judgment obligee; otherwise, the officer shall oust all such persons therefrom with the assistance, if necessary, of appropriate peace officers, and employing such means as may be reasonably necessary to retake possession, and place the judgment obligee in possession of such property.

Any costs, damages, rents or profits awarded by the judgment shall be satisfied in the same manner as a judgment for money. (d) Removal of improvements on property subject of execution. - When the property subject of execution contains improvements constructed or planted by the judgment obligor or his agent, the officer shall not destroy, demolish or remove said improvements, except upon special order of the court, issued upon motion of the judgment obligee after due hearing and after the former has failed to remove the same within a reasonable time fixed by the court. As a final note, it bears to point out that this case has been dragging for more than 15 years and the execution of this Courts judgment in PEA v. CA has been delayed for almost ten years now simply because De Leon filed a frivolous appeal against the RTCs order of execution based on arguments that cannot hold water. As a consequence, PEA is prevented from enjoying the fruits of the final judgment in its favor. The Court agrees with the Office of the Solicitor General in its contention that every litigation must come to an end once a judgment becomes final, executory and unappealable. 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, which is the "life of the law."36 To frustrate it by dilatory schemes on the part of the losing party is to frustrate all the efforts, time and expenditure of the courts.37 It is in the interest of justice that this Court should write finis to this litigation. WHEREFORE, the Court disposes and orders the following: The petition for review on certiorari in G.R. No. 181970 is DENIED. The challenged Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 90328 dated November 21, 2007 and March 4, 2008, respectively, are AFFIRMED. The petition for certiorari in G.R. No. 182678 is GRANTED. The assailed Orders of the Regional Trial Court of Makati City, Branch 135, dated December 28, 2007 and March 4, 2008, are ANNULLED and SET ASIDE. The Regional Trial Court of Makati is hereby DIRECTED to hear and resolve PEAs Motion for the Issuance of a Writ of Demolition with utmost dispatch. This Decision is IMMEDIATELY EXECUTORY. The Clerk of Court is DIRECTED to remand the records of the case to the court of origin. SO ORDERED. DIOSDADO M. PERALTA Associate Justice WE CONCUR: ANTONIO T. CARPIO Associate Justice Chairperson CONCHITA CARPIO MORALES* Associate Justice ROBERTO A. ABAD Associate Justice

JOSE CATRAL MENDOZA Associate Justice

Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No. 178495 July 26, 2010

SPOUSES RODOLFO A. NOCEDA and ERNA T. NOCEDA, Petitioners, vs. AURORA ARBIZO-DIRECTO, Respondent. DECISION NACHURA, J.: Assailed in the instant petition is the Decision1 of the Court of Appeals (CA), dismissing the appeal on the ground of res judicata. On September 16, 1986, respondent Aurora Arbizo-Directo filed a complaint against her nephew, herein petitioner Rodolfo Noceda, for "Recovery of Possession and Ownership and Rescission/Annulment of Donation" with the Regional Trial Court (RTC) of Iba, Zambales, Branch 71, docketed as Civil Case No. RTC-354-I. Respondent alleged that she and her co-heirs have extra-judicially settled the property they inherited from their late father on August 19, 1981, consisting of a parcel of land, described as Lot No. 1121, situated in Bitoong, San Isidro, Cabangan, Zambales. She donated a portion of her hereditary share to her nephew, but the latter occupied a bigger area, claiming ownership thereof since September 1985. Judgment was rendered in favor of respondent on November 6, 1991, where the RTC (a) declared the Extra-Judicial Settlement-Partition dated August 19, 1981 valid; (b) declared the Deed of Donation dated June 1, 1981 revoked; (c) ordered defendant to vacate and reconvey that donated portion of Lot 2, Lot 1121 subject of the Deed of Donation dated June 1, 1981 to the plaintiff or her heirs or assigns; (d) ordered the defendant to remove the house built inside the donated portion at the defendants expense or pay a monthly rental of P300.00 Philippine Currency; and (e) ordered the defendant to pay attorneys fees in the amount of P5,000.00.2 The decision was appealed to the CA, docketed as CA-G.R. CV No. 38126. On January 5, 1995, spouses Rodolfo Dahipon and Cecilia Obispo- Dahipon filed a complaint for recovery of ownership and possession, and annulment of sale and damages against spouses Antonio and Dominga Arbizo, spouses Rodolfo and Erna Noceda, and Aurora Arbizo-Directo with the RTC, Iba, Zambales, Branch 70. This was docketed as Civil Case No. RTC-1106-I. In the complaint, spouses Dahipon alleged that they were the registered owners of a parcel of land, consisting of 127,298 square meters, situated in Barangay San Isidro, Cabangan, Zambales, designated as Lot 1121-A. The Original Certificate of Title No. P-9036 over the land was issued in the name of Cecilia Obispo-Dahipon, pursuant to Free Patent No. 548781. Spouses Dahipon claimed that the defendants therein purchased portions of the land from them without paying the full amount. Except for Aurora, a compromise agreement was entered into by the parties, as a result of which, a deed of absolute sale was executed, and TCT No. T-50730 was issued in the name of spouses Noceda for their portion of the land. For her part, Aurora questioned Dahipons alleged ownership over the same parcel of land by filing an adverse claim. In the meantime, a decision was rendered in CA-G.R. CV No. 38126 on March 31, 1995 with the following fallo: WHEREFORE, judgment is hereby rendered, ORDERING defendant Rodolfo Noceda to VACATE the portion known as Lot "C" of Lot 1121 per Exhibit E, which was allotted to plaintiff

Aurora Arbizo-Directo. Except for this modification, the Decision dated November 6, 1991 of the RTC, Iba, Zambales, Branch 71, in Civil Case No. RTC-354-I, is hereby AFFIRMED in all other respects. Costs against defendant Rodolfo Noceda.3 Undaunted, petitioners filed a petition for review with this Court, which was docketed as G.R. No. 119730. The Court found no reversible error, much less grave abuse of discretion, with the factual findings of the two courts below, and thus denied the petition on September 2, 1999.4 The decision became final and executory, and a writ of execution was duly issued by the RTC on March 6, 2001 in Civil Case No. RTC-354-I. On December 4, 2003, petitioners instituted an action for quieting of title against respondent, docketed as Civil Case No. 2108-I. In the complaint, petitioners admitted that Civil Case No. RTC-354-I was decided in favor of respondent and a writ of execution had been issued, ordering them to vacate the property. However, petitioners claimed that the land, which was the subject matter of Civil Case No. RTC-354-I, was the same parcel of land owned by spouses Dahipon from whom they purchased a portion; and that a title (TCT No. T-37468) was, in fact, issued in their name. Petitioners prayed for the issuance of a writ of preliminary injunction to enjoin the implementation of the Writ of Execution dated March 6, 2001 in Civil Case No. RTC-354-I, and that "a declaration be made that the property bought, occupied and now titled in the name of [petitioners] was formerly part and subdivision of Lot No. 1121 Pls-468-D, covered by OCT No. P-9036 in the name of Cecilia Obispo-Dahipon."5 Respondent filed a Motion to Dismiss on the ground of res judicata. Respondent averred that petitioners, aware of their defeat in Civil Case No. RTC-354-I, surreptitiously negotiated with Cecilia Obispo-Dahipon for the sale of the land and filed the present suit in order to subvert the execution thereof. The trial court denied the motion, holding that there was no identity of causes of action. Trial thereafter ensued. On January 25, 2006, after petitioners presented their evidence, respondent filed a Demurrer to Evidence, stating that the claim of ownership and possession of petitioners on the basis of the title emanating from that of Cecilia Obispo-Dahipon was already raised in the previous case (Civil Case No. RTC-354-I). On February 22, 2006, the trial court issued a resolution granting the demurrer to evidence. The CA affirmed. Hence, petitioners now come to this Court, raising the following issues: WHETHER OR NOT THE PRINCIPLE OF RES JUDICATA OR DOCTRINE OF CONCLUSIVENESS OF JUDGMENT IS APPLICABLE UNDER THE FACTS OBTAINING IN THE PRESENT CASE[;] WHETHER OR NOT THE RESPONDENT HAS A BETTER TITLE THAN THE PETITIONERS[; and] WHETHER OR NOT THE RULING ON PURCHASERS IN BAD FAITH IS APPLICABLE IN THE PRESENT CASE[.]6 Petitioners assert that res judicata7 does not apply, considering that the essential requisites as to the identity of parties, subject matter, and causes of action are not present. The petition is bereft of merit. The doctrine of res judicata is set forth in Section 47 of Rule 39 of the Rules of Court, 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 actually and necessarily included therein or necessary thereto. The principle of res judicata lays down two main rules, namely: (1) the judgment or decree of a court of competent jurisdiction on the merits concludes the litigation between the parties and their privies and constitutes a bar to a new action or suit involving the same cause of action either before the same or any other tribunal; and (2) any right, fact, or matter in issue directly adjudicated or necessarily involved in the determination of an action before a competent court in which a judgment or decree is rendered on the merits is conclusively settled by the judgment therein and cannot again be litigated between the parties and their privies whether or not the claims or demands, purposes, or subject matters of the two suits are the same. These two main rules mark the distinction between the principles governing the two typical cases in which a judgment may operate as evidence.8] The first general rule above stated, and which corresponds to the afore-quoted paragraph (b) of Section 47, Rule 39 of the Rules of Court, is referred to as "bar by former judgment"; while the second general rule, which is embodied in paragraph (c) of the same section and rule, is known as "conclusiveness of judgment."9 The Court in Calalang v. Register of Deeds of Quezon City10 explained the second concept which we reiterate herein, to wit: The second concept conclusiveness of judgment states that a fact or question which was in issue in a former suit and was there judicially passed upon and determined by a court of competent jurisdiction, is conclusively settled by the judgment therein as far as the parties to that action and persons in privity with them are concerned and cannot be again litigated in any future action between such parties or their privies, in the same court or any other court of concurrent jurisdiction on either the same or different cause of action, while the judgment remains unreversed by proper authority. It has been held that in order that a judgment in one action can be conclusive as to a particular matter in another action between the same parties or their privies, it is essential that the issue be identical. If a particular point or question is in issue in the second action, and the judgment will depend on the determination of that particular point or question, a former judgment between the same parties or their privies will be final and conclusive in the second if that same point or question was in issue and adjudicated in the first suit (Nabus v. Court of Appeals, 193 SCRA 732 [1991]). Identity of cause of action is not required but merely identity of issue. Justice Feliciano, in Smith Bell & Company (Phils.), Inc. v. Court of Appeals (197 SCRA 201, 210 [1991]), reiterated Lopez v. Reyes (76 SCRA 179 [1977]) in regard to the distinction between bar by former judgment which bars the prosecution of a second action upon the same claim, demand, or cause of action, and conclusiveness of judgment which bars the relitigation of particular facts or issues in another litigation between the same parties on a different claim or cause of action.

The general rule precluding the relitigation of material facts or questions which were in issue and adjudicated in former action are commonly applied to all matters essentially connected with the subject matter of the litigation. Thus, it extends to questions necessarily implied in the final judgment, although no specific finding may have been made in reference thereto and although such matters were directly referred to in the pleadings and were not actually or formally presented. Under this rule, if the record of the former trial shows that the judgment could not have been rendered without deciding the particular matter, it will be considered as having settled that matter as to all future actions between the parties and if a judgment necessarily presupposes certain premises, they are as conclusive as the judgment itself.11 The foregoing disquisition finds application in the case at bar. Undeniably, the present case is closely related to the previous case (Civil Case No. RTC-354-I), where petitioners raised the issue of ownership and possession of Lot No. 1121 and the annulment of the donation of said lot to them. The RTC found for respondent, declaring the deed of donation she executed in favor of petitioners revoked; and ordered petitioners to vacate and reconvey the donated portion to respondent. The decision of the RTC was affirmed by the CA, and became final with the denial of the petition for review by this Court in G.R. No. 119730. In that case, the Court noted the established fact "that petitioner Noceda occupied not only the portion donated to him by respondent Aurora Arbizo-Directo, but he also fenced the whole area of Lot C which belongs to private respondent Directo, thus, petitioners act of occupying the portion pertaining to private respondent Directo without the latters knowledge and consent is an act of usurpation which is an offense against the property of the donor and considered as an act of ingratitude of a donee against the donor."12 Clearly, therefore, petitioners have no right of ownership or possession over the land in question.
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Under the principle of conclusiveness of judgment, such material fact becomes binding and conclusive on the parties. When a right or fact has been judicially tried and determined by a court of competent jurisdiction, or when 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.13 Thus, petitioners can no longer question respondents ownership over Lot No. 1121 in the instant suit for quieting of title. Simply put, conclusiveness of judgment bars the relitigation of particular facts or issues in another litigation between the same parties on a different claim or cause of action.14 Furthermore, we agree that petitioners instituted the instant action with unclean hands. Aware of their defeat in the previous case, they attempted to thwart execution and assert their alleged ownership over the land through their purported purchase of a lot from Cecilia Obispo-Dahipon. This later transaction appears to be suspect. A perusal of G.R. No. 119730 reveals that the Court was not unaware of Dahipons alleged claim over the same parcel of land. It noted that Dahipon did not even bother to appear in court to present her free patent upon respondents request, or to intervene in the case, if she really had any legitimate interest over the land in question.15 In any event, petitioners assertion of alleged good title over the land cannot stand considering that they purchased the piece of land from Dahipon knowing fully well that the same was in the adverse possession of another. Thus, we find no reversible error in the appellate courts ruling that petitioners are in fact buyers in bad faith. We quote: With appellants actual knowledge of facts that would impel a reasonable man to inquire further on [a] possible defect in the title of Obispo, considering that she was found not to have been in actual occupation of the land in CA-G.R. CV No. 38126, they cannot simply invoke protection of the law as purchasers in good faith and for value. In a suit to quiet title, defendant may set up equitable as well as legal defenses, including acquisition of title by adverse possession and a prior adjudication on the question under the rule on res judicata. Appellants status as holders in bad faith of a certificate of title, taken together with the preclusive effect of the right of possession and ownership over the disputed portion, which was adjudged in favor of appellee in

Civil Case No. RTC-354-I, thus provide ample justification for the court a quo to grant the demurrer to evidence and dismiss their suit for quieting of title filed against the said appellee.16 WHEREFORE, the Decision of the Court of Appeals in CA-G.R. CV No. 87026 is AFFIRMED in toto. SO ORDERED. ANTONIO EDUARDO B. NACHURA Associate Justice WE CONCUR: ANTONIO T. CARPIO Associate Justice Chairperson DIOSDADO M. PERALTA Associate Justice ROBERTO A. ABAD Associate Justice

JOSE CATRAL MENDOZA Associate Justice ATTESTATION I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Division. ANTONIO T. CARPIO Associate Justice Chairperson, Second Division CERTIFICATION Pursuant to Section 13, Article VIII of the Constitution and the Division Chairpersons Attestation, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Division. RENATO C. CORONA Chief Justice

Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G.R. NO. 156596 August 24, 2007

ADELAIDA INFANTE, Petitioner, vs. ARAN BUILDERS, INC., Respondent.* DECISION AUSTRIA-MARTINEZ, J.: This resolves the Petition for Review on Certiorari under Rule 45 of the Rules of Court, seeking the reversal of the Decision1 of the Court of Appeals (CA) promulgated on August 12, 2002, which upheld the Order dated September 4, 2001, issued by the Regional Trial Court of Muntinlupa City (RTC). The undisputed facts and issues raised in the lower courts are accurately summarized by the CA as follows: Before the Regional Trial Court of Muntinlupa City (or "Muntinlupa RTC"; Branch 276), presided over by Hon. Norma C. Perello (or "respondent judge"), was an action for revival of judgment filed on June 6, 2001 by Aran Builders, Inc. (or "private respondent") against Adelaida Infante (or "petitioner"), docketed as Civil Case No. 01-164. The judgment sought to be revived was rendered by the Regional Trial Court of Makati City (or "Makati RTC"; Branch 60) in an action for specific performance and damages, docketed as Civil Case No. 15563. The Makati RTC judgment, which became final and executory on November 16, 1994, decreed as follows: 26. WHEREFORE, the Court hereby renders judgment as follows: 26.1 The defendant ADELAIDA B. INFANTE is ordered to do the following within thirty (30) days from finality hereof: 26.1.1. To deliver to the plaintiff ARAN BUILDERS, INC. the following: (a) the complete plans (lot plan, location map and vicinity map); (b) Irrevocable Power of Attorney; (c ) Real Estate Tax clearance; (d) tax receipts; (e) proof of up to date payment of Subdivision Association dues referred to in the "CONTRACT TO SELL" dated November 10, 1986 (Exh. A or Exh. 1); 26.1.2. To execute the deed of sale of Lot No. 11, Block 9, Phase 3-A1, Ayala Alabang Subdivision covered by TCT No. 114015 for P500,000.00 in favor of the plaintiff; 26.1.3. To pay the capital gains tax, documentary stamp taxes and other taxes which the Bureau of Internal Revenue may assess in connection

with the sale mentioned in the preceding paragraph and to submit to the plaintiff proof of such payment; 26.1.4. To secure the written conformity of AYALA CORPORATION to the said sale and to give such written conformity to the plaintiff; 26.1.5. To register the deed of sale with the Registry of Deeds and deliver to AYALA CORPORATION the certificate of title issued in the name of plaintiff pursuant to such registration; 26.2 Upon the compliance of the defendant with the preceding directives, the plaintiff must immediately pay to the defendant the sum of P321,918.25; 26.3 The defendant is ordered to pay plaintiff P10,000.00 as attorneys fees; 26.4 The Complaint for moral and exemplary damages is DISMISSED; 26.5 The COUNTERCLAIM is DISMISSED; and 26.6 Cost is taxed against the defendant. Petitioner filed a motion to dismiss the action (for revival of judgment) on the grounds that the Muntinlupa RTC has no jurisdiction over the persons of the parties and that venue was improperly laid. Private respondent opposed the motion. On September 4, 2001, the Muntinlupa RTC issued an order which reads: The MOTION TO DISMISS is denied. Admittedly, the Decision was rendered by the Makati Regional Trial Court, but it must be emphasized that at that time there was still no Regional Trial Court in Muntinlupa City, then under the territorial jurisdiction of the Makati Courts, so that cases from this City were tried and heard at Makati City. With the creation of the Regional Trial Courts of Muntinlupa City, matters involving properties located in this City, and cases involving Muntinlupa City residents were all ordered to be litigated before these Courts. The case at bar is a revival of a judgment which declared the plaintiff as the owner of a parcel of land located in Muntinlupa City. It is this judgment which is sought to be enforced thru this action which necessarily involves the interest, possession, title, and ownership of the parcel of land located in Muntinlupa city and adjudged to Plaintiff. It goes without saying that the complaint should be filed in the latter City where the property is located, as there are now Regional Trial Courts hereat. Defendant may answer the complaint within the remaining period, but no less than five (5) days, otherwise a default judgment might be taken against her. It is SO ORDERED. Her motion for reconsideration having been denied per order dated September 28, 2001, petitioner came to this Court [CA] via the instant special civil action for certiorari. She ascribes grave abuse of discretion amounting to lack or excess of jurisdiction on the part of respondent judge for "erroneously holding that Civil Case No. 01-164 is a revival of judgment which declared private respondent as the owner of a parcel of land located in Muntinlupa City and (that) the judgment rendered by the (Makati RTC) in Civil Case No. 15563 sought to be enforced

necessarily involves the interest, possession, title and ownership of the parcel of land located in Muntinlupa City." Petitioner asserts that the complaint for specific performance and damages before the Makati RTC is a personal action and, therefore, the suit to revive the judgment therein is also personal in nature; and that, consequently, the venue of the action for revival of judgment is either Makati City or Paraaque City where private respondent and petitioner respectively reside, at the election of private respondent. On the other hand, private respondent maintains that the subject action for revival judgment is "quasi in rem because it involves and affects vested or adjudged right on a real property"; and that, consequently, venue lies in Muntinlupa City where the property is situated.2 On August 12, 2002, the CA promulgated its Decision ruling in favor of herein private respondent. The CA held that since the judgment sought to be revived was rendered in an action involving title to or possession of real property, or interest therein, the action for revival of judgment is then an action in rem which should be filed with the Regional Trial Court of the place where the real property is located. Petitioner moved for reconsideration of the CA Decision but the motion was denied per Resolution dated January 7, 2003. Hence, herein petition. Petitioner claims that the CA erred in finding that the complaint for revival of judgment is an action in rem which was correctly filed with the RTC of the place where the disputed real property is located. The petition is unmeritorious. Petitioner insists that the action for revival of judgment is an action in personam; therefore, the complaint should be filed with the RTC of the place where either petitioner or private respondent resides. Petitioner then concludes that the filing of the action for revival of judgment with the RTC of Muntinlupa City, the place where the disputed property is located, should be dismissed on the ground of improper venue. Private respondent is of the opinion that the judgment it is seeking to revive involves interest over real property. As such, the present action for revival is a real action, and venue was properly laid with the court of the place where the realty is located. Thus, the question that must be answered is: where is the proper venue of the present action for revival of judgment? Section 6, Rule 39 of the 1997 Rules of Civil Procedure provides that after the lapse of five (5) years from entry of judgment and before it is barred by the statute of limitations, a final and executory judgment or order may be enforced by action. The Rule does not specify in which court the action for revival of judgment should be filed. In Aldeguer v. Gemelo,3 the Court held that: x x x an action upon a judgment must be brought either in the same court where said judgment was rendered or in the place where the plaintiff or defendant resides, or in any other place designated by the statutes which treat of the venue of actions in general. (Emphasis supplied)4 but emphasized that other provisions in the rules of procedure which fix the venue of actions in general must be considered.5 Under the present Rules of Court, Sections 1 and 2 of Rule 4 provide:

Section 1. Venue of real actions. - Actions affecting title to or possession of real property, or interest therein, shall be commenced and tried in the proper court which has jurisdiction over the area wherein the real property involved, or a portion thereof, is situated. xxxx Section 2. Venue of personal actions. - All other actions may be commenced and tried where the plaintiff or any of the principal plaintiffs resides, or where the defendant or any of the principal defendants resides, or in the case of a non-resident defendant where he may be found, at the election of the plaintiff. Thus, the proper venue depends on the determination of whether the present action for revival of judgment is a real action or a personal action. Applying the afore-quoted rules on venue, if the action for revival of judgment affects title to or possession of real property, or interest therein, then it is a real action that must be filed with the court of the place where the real property is located. If such action does not fall under the category of real actions, it is then a personal action that may be filed with the court of the place where the plaintiff or defendant resides. In support of her contention that the action for revival of judgment is a personal action and should be filed in the court of the place where either the plaintiff or defendant resides, petitioner cites the statements made by the Court in Aldeguer v. Gemelo6 and Donnelly v. Court of First Instance of Manila7 . Petitioner, however, seriously misunderstood the Court's rulings in said cases. In Aldeguer, what the Court stated was that "[t]he action for the execution of a judgment for damages is a personal one, and under section 377 [of the Code of Civil Procedure], it should be brought in any province where the plaintiff or the defendant resides, at the election of the plaintiff"8 (Emphasis and underscoring supplied). Petitioner apparently took such statement to mean that any action for revival of judgment should be considered as a personal one. This thinking is incorrect. The Court specified that the judgment sought to be revived in said case was a judgment for damages. The judgment subject of the action for revival did not involve or affect any title to or possession of real property or any interest therein. The complaint filed in the revival case did not fall under the category of real actions and, thus, the action necessarily fell under the category of personal actions. In Donnelly, the portion of the Decision being relied upon by petitioner stated thus: Petitioner raises before this Court two (2) issues, namely: (a) whether an action for revival of judgment is one quasi in rem and, therefore, service of summons may be effected thru publication; and (b) whether the second action for revival of judgment (Civil Case No. 76166) has already prescribed. To our mind, the first is not a proper and justiciable issue in the present proceedings x x x. Nevertheless, let it be said that an action to revive a judgment is a personal one. (Emphasis supplied)9 The Court clearly pointed out that in said case, the issue on whether an action for revival of judgment is quasi in rem was not yet proper and justiciable. Therefore, the foregoing statement cannot be used as a precedent,as it was merely an obiter dictum. Moreover, as in Aldeguer, the judgment sought to be revived in Donnellyinvolved judgment for a certain sum of money. Again, no title or interest in real property was involved. It is then understandable that the action for revival in said case was categorized as a personal one. Clearly, the Court's classification in Aldeguer and Donnelly of the actions for revival of judgment as being personal in character does not apply to the present case. The allegations in the complaint for revival of judgment determine whether it is a real action or a personal action.

The complaint for revival of judgment alleges that a final and executory judgment has ordered herein petitioner to execute a deed of sale over a parcel of land in Ayala Alabang Subdivision in favor of herein private respondent; pay all pertinent taxes in connection with said sale; register the deed of sale with the Registry of Deeds and deliver to Ayala Corporation the certificate of title issued in the name of private respondent. The same judgment ordered private respondent to pay petitioner the sum of P321,918.25 upon petitioner's compliance with the aforementioned order. It is further alleged that petitioner refused to comply with her judgment obligations despite private respondent's repeated requests and demands, and that the latter was compelled to file the action for revival of judgment. Private respondent then prayed that the judgment be revived and a writ of execution be issued to enforce said judgment. The previous judgment has conclusively declared private respondent's right to have the title over the disputed property conveyed to it. It is, therefore, undeniable that private respondent has an established interest over the lot in question; and to protect such right or interest, private respondent brought suit to revive the previous judgment. The sole reason for the present action to revive is the enforcement of private respondent's adjudged rights over a piece of realty. Verily, the action falls under the category of a real action, for it affects private respondent's interest over real property.
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The present case for revival of judgment being a real action, the complaint should indeed be filed with the Regional Trial Court of the place where the realty is located. Section 18 of Batas Pambansa Bilang 129 provides: Sec. 18. Authority to define territory appurtenant to each branch. - The Supreme Court shall define the territory over which a branch of the Regional Trial Court shall exercise its authority. The territory thus defined shall be deemed to be the territorial area of the branch concerned for purposes of determining the venue of all suits, proceedings or actions, whether civil or criminal, as well as determining the Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts over which the said branch may exercise appellate jurisdiction. The power herein granted shall be exercised with a view to making the courts readily accessible to the people of the different parts of the region and making the attendance of litigants and witnesses as inexpensive as possible. (Emphasis supplied)
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From the foregoing, it is quite clear that a branch of the Regional Trial Court shall exercise its authority only over a particular territory defined by the Supreme Court. Originally, Muntinlupa City was under the territorial jurisdiction of the Makati Courts. However, Section 4 of Republic Act No. 7154, entitled An Act to Amend Section Fourteen of Batas Pambansa Bilang 129, Otherwise Known As The Judiciary Reorganization Act of 1981, took effect on September 4, 1991. Said law provided for the creation of a branch of the Regional Trial Court in Muntinlupa. Thus, it is now the Regional Trial Court in Muntinlupa City which has territorial jurisdiction or authority to validly issue orders and processes concerning real property within Muntinlupa City. Thus, there was no grave abuse of discretion committed by the Regional Trial Court of Muntinlupa City, Branch 276 when it denied petitioner's motion to dismiss; and the CA did not commit any error in affirming the same. WHEREFORE, the petition is DENIED. The Decision dated August 12, 2002 and Resolution dated January 7, 2003 of the Court of Appeals are AFFIRMED. SO ORDERED. MA. ALICIA AUSTRIA-MARTINEZ Associate Justice

G.R. No. 183984

Republic of the Philippines SUPREME COURT Manila SECOND DIVISION April 13, 2011

ARTURO SARTE FLORES, Petitioner, vs. SPOUSES ENRICO L. LINDO, JR. and EDNA C. LINDO, Respondents. DECISION CARPIO, J.: The Case Before the Court is a petition for review1 assailing the 30 May 2008 Decision2 and the 4 August 2008 Resolution3of the Court of Appeals in CA-G.R. SP No. 94003. The Antecedent Facts The facts, as gleaned from the Court of Appeals Decision, are as follows: On 31 October 1995, Edna Lindo (Edna) obtained a loan from Arturo Flores (petitioner) amounting to P400,000 payable on 1 December 1995 with 3% compounded monthly interest and 3% surcharge in case of late payment. To secure the loan, Edna executed a Deed of Real Estate Mortgage4 (the Deed) covering a property in the name of Edna and her husband Enrico (Enrico) Lindo, Jr. (collectively, respondents). Edna also signed a Promissory Note5 and the Deed for herself and for Enrico as his attorney-in-fact. Edna issued three checks as partial payments for the loan. All checks were dishonored for insufficiency of funds, prompting petitioner to file a Complaint for Foreclosure of Mortgage with Damages against respondents. The case was raffled to the Regional Trial Court of Manila, Branch 33 (RTC, Branch 33) and docketed as Civil Case No. 00-97942. In its 30 September 2003 Decision,6 the RTC, Branch 33 ruled that petitioner was not entitled to judicial foreclosure of the mortgage. The RTC, Branch 33 found that the Deed was executed by Edna without the consent and authority of Enrico. The RTC, Branch 33 noted that the Deed was executed on 31 October 1995 while the Special Power of Attorney (SPA) executed by Enrico was only dated 4 November 1995. The RTC, Branch 33 further ruled that petitioner was not precluded from recovering the loan from Edna as he could file a personal action against her. However, the RTC, Branch 33 ruled that it had no jurisdiction over the personal action which should be filed in the place where the plaintiff or the defendant resides in accordance with Section 2, Rule 4 of the Revised Rules on Civil Procedure. Petitioner filed a motion for reconsideration. In its Order7 dated 8 January 2004, the RTC, Branch 33 denied the motion for lack of merit. On 8 September 2004, petitioner filed a Complaint for Sum of Money with Damages against respondents. It was raffled to Branch 42 (RTC, Branch 42) of the Regional Trial Court of Manila, and docketed as Civil Case No. 04-110858. Respondents filed their Answer with Affirmative Defenses and Counterclaims where they admitted the loan but stated that it only amounted to P340,000. Respondents further alleged that Enrico was not a party to the loan because it was contracted by Edna without Enricos signature. Respondents prayed for the dismissal of the case on the grounds of improper venue, res judicata and forum-shopping, invoking the Decision of the RTC, Branch 33. On 7 March 2005, respondents also filed a Motion to Dismiss on the grounds of res judicata and lack of cause of action. The Decision of the Trial Court On 22 July 2005, the RTC, Branch 42 issued an Order8 denying the motion to dismiss. The RTC, Branch 42 ruled that res judicata will not apply to rights, claims or demands which, although

growing out of the same subject matter, constitute separate or distinct causes of action and were not put in issue in the former action. Respondents filed a motion for reconsideration. In its Order9 dated 8 February 2006, the RTC, Branch 42 denied respondents motion. The RTC, Branch 42 ruled that the RTC, Branch 33 expressly stated that its decision did not mean that petitioner could no longer recover the loan petitioner extended to Edna. Respondents filed a Petition for Certiorari and Mandamus with Prayer for a Writ of Preliminary Injunction and/or Temporary Restraining Order before the Court of Appeals. The Decision of the Court of Appeals In its 30 May 2008 Decision, the Court of Appeals set aside the 22 July 2005 and 8 February 2006 Orders of the RTC, Branch 42 for having been issued with grave abuse of discretion. The Court of Appeals ruled that while the general rule is that a motion to dismiss is interlocutory and not appealable, the rule admits of exceptions. The Court of Appeals ruled that the RTC, Branch 42 acted with grave abuse of discretion in denying respondents motion to dismiss. The Court of Appeals ruled that under Section 3, Rule 2 of the 1997 Rules of Civil Procedure, a party may not institute more than one suit for a single cause of action. If two or more suits are instituted on the basis of the same cause of action, the filing of one on a judgment upon the merits in any one is available ground for the dismissal of the others. The Court of Appeals ruled that on a nonpayment of a note secured by a mortgage, the creditor has a single cause of action against the debtor, that is recovery of the credit with execution of the suit. Thus, the creditor may institute two alternative remedies: either a personal action for the collection of debt or a real action to foreclose the mortgage, but not both. The Court of Appeals ruled that petitioner had only one cause of action against Edna for her failure to pay her obligation and he could not split the single cause of action by filing separately a foreclosure proceeding and a collection case. By filing a petition for foreclosure of the real estate mortgage, the Court of Appeals held that petitioner had already waived his personal action to recover the amount covered by the promissory note. Petitioner filed a motion for reconsideration. In its 4 August 2008 Resolution, the Court of Appeals denied the motion. Hence, the petition before this Court. The Issue The sole issue in this case is whether the Court of Appeals committed a reversible error in dismissing the complaint for collection of sum of money on the ground of multiplicity of suits. The Ruling of this Court The petition has merit. The rule is that a mortgage-creditor has a single cause of action against a mortgagor-debtor, that is, to recover the debt.10 The mortgage-creditor has the option of either filing a personal action for collection of sum of money or instituting a real action to foreclose on the mortgage security.11 An election of the first bars recourse to the second, otherwise there would be multiplicity of suits in which the debtor would be tossed from one venue to another depending on the location of the mortgaged properties and the residence of the parties.12 The two remedies are alternative and each remedy is complete by itself.13 If the mortgagee opts to foreclose the real estate mortgage, he waives the action for the collection of the debt, and vice versa.14 The Court explained: x x x in the absence of express statutory provisions, a mortgage creditor may institute against the mortgage debtor either a personal action for debt or a real action to foreclose the mortgage. In other words, he may pursue either of the two remedies, but not both. By such election, his cause of action can by no means be impaired, for each of the two remedies is complete in itself. Thus, an election to bring a personal action will leave open to him all the properties of the debtor for attachment and execution, even including the mortgaged property itself. And, if he waives such personal action and pursues his remedy against the mortgaged property, an unsatisfied judgment thereon would still give him the right to sue for deficiency judgment, in which case, all the properties of the defendant, other than the mortgaged property, are again open to him for the

satisfaction of the deficiency. In either case, his remedy is complete, his cause of action undiminished, and any advantages attendant to the pursuit of one or the other remedy are purely accidental and are all under his right of election. On the other hand, a rule that 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 (Soriano v. Enriques, 24 Phil. 584) and obnoxious to law and equity (Osorio v. San Agustin, 25 Phil. 404), 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.15 The Court has ruled that if a creditor is allowed to file his separate complaints simultaneously or successively, one to recover his credit and another to foreclose his mortgage, he will, in effect, be authorized plural redress for a single breach of contract at so much costs to the court and with so much vexation and oppressiveness to the debtor.16 In this case, however, there are circumstances that the Court takes into consideration. Petitioner filed an action for foreclosure of mortgage. The RTC, Branch 33 ruled that petitioner was not entitled to judicial foreclosure because the Deed of Real Estate Mortgage was executed without Enricos consent. The RTC, Branch 33 stated: All these circumstances certainly conspired against the plaintiff who has the burden of proving his cause of action. On the other hand, said circumstances tend to support the claim of defendant Edna Lindo that her husband did not consent to the mortgage of their conjugal property and that the loan application was her personal decision. Accordingly, since the Deed of Real Estate Mortgage was executed by defendant Edna Lindo lacks the consent or authority of her husband Enrico Lindo, the Deed of Real Estate Mortgage is void pursuant to Article 96 of the Family Code. This does not mean, however, that the plaintiff cannot recover the P400,000 loan plus interest which he extended to defendant Edna Lindo. He can institute a personal action against the defendant for the amount due which should be filed in the place where the plaintiff resides, or where the defendant or any of the principal defendants resides at the election of the plaintiff in accordance with Section 2, Rule 4 of the Revised Rules on Civil Procedure. This Court has no jurisdiction to try such personal action.17 Edna did not deny before the RTC, Branch 33 that she obtained the loan. She claimed, however, that her husband did not give his consent and that he was not aware of the transaction.18 Hence, the RTC, Branch 33 held that petitioner could still recover the amount due from Edna through a personal action over which it had no jurisdiction. Edna also filed an action for declaratory relief before the RTC, Branch 93 of San Pedro Laguna (RTC, Branch 93), which ruled: At issue in this case is the validity of the promissory note and the Real Estate Mortgage executed by Edna Lindo without the consent of her husband. The real estate mortgage executed by petition Edna Lindo over their conjugal property is undoubtedly an act of strict dominion and must be consented to by her husband to be effective. In the instant case, the real estate mortgage, absent the authority or consent of the husband, is necessarily void. Indeed, the real estate mortgage is this case was executed on October 31, 1995 and the subsequent special power of attorney dated November 4, 1995 cannot be made to retroact to October 31, 1995 to validate the mortgage previously made by petitioner. The liability of Edna Lindo on the principal contract of the loan however subsists notwithstanding the illegality of the mortgage. Indeed, where a mortgage is not valid, the principal obligation which it guarantees is not thereby rendered null and void. That obligation matures and becomes demandable in accordance with the stipulation pertaining to it. Under the foregoing circumstances, what is lost is merely the right to foreclose the mortgage as a special remedy for satisfying or settling the indebtedness which is the principal obligation. In case of nullity, the mortgage deed remains as evidence or proof of a personal obligation of the debtor and the amount due to the creditor may be enforced in an ordinary action.

In view of the foregoing, judgment is hereby rendered declaring the deed of real estate mortgage as void in the absence of the authority or consent of petitioners spouse therein. The liability of petitioner on the principal contract of loan however subsists notwithstanding the illegality of the real estate mortgage.19 The RTC, Branch 93 also ruled that Ednas liability is not affected by the illegality of the real estate mortgage. Both the RTC, Branch 33 and the RTC, Branch 93 misapplied the rules. Article 124 of the Family Code provides: Art. 124. The administration and enjoyment of the conjugal partnership property shall belong to both spouses jointly. In case of disagreement, the husbands decision shall prevail, subject to recourse to the court by the wife for proper remedy, which must be availed of within five years from the date of contract implementing such decision. In the event that one spouse is incapacitated or otherwise unable to participate in the administration of the conjugal properties, the other spouse may assume sole powers of administration. These powers do not include disposition or encumbrance without authority of the court or the written consent of the other spouse. In the absence of such authority or consent the disposition or encumbrance shall be void. However, the transaction shall be construed as a continuing offer on the part of the consenting spouse and the third person, and may be perfected as a binding contract upon the acceptance by the other spouse or authorization by the court before the offer is withdrawn by either or both offerors. (Emphasis supplied) Article 124 of the Family Code of which applies to conjugal partnership property, is a reproduction of Article 96 of the Family Code which applies to community property. Both Article 96 and Article 127 of the Family Code provide that the powers do not include disposition or encumbrance without the written consent of the other spouse. Any disposition or encumbrance without the written consent shall be void. However, both provisions also state that "the transaction shall be construed as a continuing offer on the part of the consenting spouse and the third person, and may be perfected as a binding contract upon the acceptance by the other spouse x x x before the offer is withdrawn by either or both offerors." In this case, the Promissory Note and the Deed of Real Estate Mortgage were executed on 31 October 1995. The Special Power of Attorney was executed on 4 November 1995. The execution of the SPA is the acceptance by the other spouse that perfected the continuing offer as a binding contract between the parties, making the Deed of Real Estate Mortgage a valid contract. However, as the Court of Appeals noted, petitioner allowed the decisions of the RTC, Branch 33 and the RTC, Branch 93 to become final and executory without asking the courts for an alternative relief. The Court of Appeals stated that petitioner merely relied on the declarations of these courts that he could file a separate personal action and thus failed to observe the rules and settled jurisprudence on multiplicity of suits, closing petitioners avenue for recovery of the loan. Nevertheless, petitioner still has a remedy under the law. In Chieng v. Santos,20 this Court ruled that a mortgage-creditor may institute against the mortgage-debtor either a personal action for debt or a real action to foreclose the mortgage. The Court ruled that the remedies are alternative and not cumulative and held that the filing of a criminal action for violation of Batas Pambansa Blg. 22 was in effect a collection suit or a suit for the recovery of the mortgage-debt.21 In that case, however, this Courtpro hac vice, ruled that respondents could still be held liable for the balance of the loan, applying the principle that no person may unjustly enrich himself at the expense of another.22 The principle of unjust enrichment is provided under Article 22 of the Civil Code which provides: Art. 22. Every person who through an act of performance by another, or any other means, acquires or comes into possession of something at the expense of the latter without just or legal ground, shall return the same to him.

There is unjust enrichment "when a person unjustly retains a benefit to the loss of another, or when a person retains money or property of another against the fundamental principles of justice, equity and good conscience."23The principle of unjust enrichment requires two conditions: (1) that a person is benefited without a valid basis or justification, and (2) that such benefit is derived at the expense of another.24 The main objective of the principle against unjust enrichment is to prevent one from enriching himself at the expense of another without just cause or consideration.25 The principle is applicable in this case considering that Edna admitted obtaining a loan from petitioners, and the same has not been fully paid without just cause. The Deed was declared void erroneously at the instance of Edna, first when she raised it as a defense before the RTC, Branch 33 and second, when she filed an action for declaratory relief before the RTC, Branch 93. Petitioner could not be expected to ask the RTC, Branch 33 for an alternative remedy, as what the Court of Appeals ruled that he should have done, because the RTC, Branch 33 already stated that it had no jurisdiction over any personal action that petitioner might have against Edna. Considering the circumstances of this case, the principle against unjust enrichment, being a substantive law, should prevail over the procedural rule on multiplicity of suits. The Court of Appeals, in the assailed decision, found that Edna admitted the loan, except that she claimed it only amounted to P340,000. Edna should not be allowed to unjustly enrich herself because of the erroneous decisions of the two trial courts when she questioned the validity of the Deed. Moreover, Edna still has an opportunity to submit her defenses before the RTC, Branch 42 on her claim as to the amount of her indebtedness. WHEREFORE, the 30 May 2008 Decision and the 4 August 2008 Resolution of the Court of Appeals in CA-G.R. SP No. 94003 are SET ASIDE. The Regional Trial Court of Manila, Branch 42 is directed to proceed with the trial of Civil Case No. 04-110858. SO ORDERED.
1avvphi1

ANTONIO T. CARPIO Associate Justice

SECOND DIVISION

FGU INSURANCE CORPORATION (Now BPI/MS INSURANCE CORPORATION), Petitioner,

G.R. No. 161282 Present: CARPIO, J., Chairperson, NACHURA, PERALTA, ABAD, and MENDOZA, JJ.

- versus -

REGIONAL TRIAL COURT OFMAKATI CITY, BRANCH 66, and G.P. SARMIENTO TRUCKING CORPORATION, Respondents.

Promulgated: February 23, 2011

x -----------------------------------------------------------------------------------------------------x

DECISION
MENDOZA, J.:
This is a petition for mandamus praying that the July 1, 2003 and November 3, 2003 orders [1] of the Regional Trial Court Branch 66, Makati City (RTC), which granted the Motion To Set Case For Hearing filed by private respondent G.P. Sarmiento Trucking Corporation (GPS), be set aside and, in lieu thereof, a decision be rendered ordering the lower court to issue the Writ of Execution in Civil Case No. 94-3009 in consonance with the decision of this venerable court dated August 6, 2002.[2] Records show that on June 18, 1994, GPS agreed to transport thirty (30) units of Condura S.D. white refrigerators in one of its Isuzu trucks, driven by Lambert Eroles (Eroles), from the plant site of Concepcion Industries,

Inc. (CII) in Alabang, to the Central Luzon Appliances in Dagupan City. On its way to its destination, however, the Isuzu truck collided with another truck resulting in the damage of said appliances. FGU Insurance Corporation (FGU), the insurer of the damaged refrigerators, paid CII, the insured, the value of the covered shipment in the sum of P204,450.00. FGU, in turn, as subrogee of the insureds rights and interests, sought reimbursement of the amount it paid from GPS. The failure of the GPS to heed FGUs claim for reimbursement, led the latter to file a complaint for damages and breach of contract of carriage against the former and its driver, Eroles, with the RTC. During the hearing of the case, FGU presented evidence establishing its claim against GPS. For its part, GPS filed a motion to dismiss by way of demurrer to evidence, which was granted by the RTC. The RTC ruled, among others, that FGU failed to adduce evidence that GPS was a common carrier and that its driver was negligent, thus, GPS could not be made liable for the damages of the subject cargoes. On appeal, the Court of Appeals (CA) affirmed the ruling of the RTC. The case was then elevated to this Court. On August 6, 2002, the Court rendered a decision[3] agreeing with the lower courts that GPS was not a common carrier but nevertheless held it liable under the doctrine of culpa contractual. Thus, the dispositive portion of the Courts decision reads as follows:
WHEREFORE, the order, dated 30 April 1996, of the Regional Trial Court, Branch 66, of Makati City, and the decision, dated 10 June 1999, of the Court of Appeals, are AFFIRMED only insofar as respondent Lambert M. Eroles is concerned, but said assailed order of the trial court and decision of the appellate court are REVERSED as regards G.P. Sarmiento Trucking Corporation which, instead, is hereby ordered to pay FGU Corporation the value of the damaged and lost cargoes in the amount of P204,450.00. No costs. SO ORDERED.

On September 18, 2002, this Court denied GPS motion for reconsideration with finality.[4] In due course, an entry of judgment[5] was issued certifying that the August 6, 2002 decision of this Court became final and executory on October 3, 2002. On October 14, 2002, FGU filed a motion for execution[6] with the RTC praying that a writ of execution be issued to enforce the August 6, 2002 judgment award of this Court in the amount of P204,450.00. On November 5, 2002, GPS filed its Opposition to Motion for Execution[7] praying that FGUs motion for execution be denied on the ground that the latters claim was unlawful, illegal, against public policy and good morals, and constituted unjust enrichment. GPS alleged that it discovered, upon verification from the insured, that after the insureds claim was compensated in full, the insured transferred the ownership of the subject appliances to FGU. In turn, FGU sold the same to third parties thereby receiving and appropriating the consideration and proceeds of the sale. GPS believed that FGU should not be allowed to doubly recover the losses it suffered. Thereafter, on January 13, 2003, GPS filed its Comment with Motion to Set Case for Hearing on the Merits.[8] On July 1, 2003, the RTC issued an order granting GPS motion to set case for hearing. Its order, in its pertinent parts, reads: X x x. The defendant, however, contends that it has already turned over to the consignee the 30 refrigerator units subject[s] of the case. It also appears from the record that the Accounting/Administrative Manager of Concepcion Industries has executed a certification to the effect that the assured company has turned over the refrigerator units in question to plaintiff.

In view of the foregoing and considering that plaintiff may not be allowed to recover more than what it is entitled to, there is a need for the parties to clarify the following issues to allow a fair and judicious resolution of plaintiffs motion for issuance of a writ of execution: 1) Was there an actual turn-over of 30 refrigerators to the plaintiff? 2) In the affirmative, what is the salvage value of the 30 refrigerators? WHEREFORE, the Court hereby orders both parties to present evidence in support of their respective positions on these issues. SO ORDERED.[9] [Italicization in the original] Upon denial of its motion for reconsideration, FGU filed this petition for mandamus directly with this Court on the following

GROUNDS
THE REGIONAL TRIAL COURT OF MAKATI CITY, BRANCH 66 UNLAWFULLY NEGLECTED THE PERFORMANCE OF ITS DUTY WHEN IT RE-OPENED A CASE, THE DECISION OF WHICH HAD ALREADY ATTAINED FINALITY.

THE REGIONAL TRIAL COURT OF MAKATI CITY, BRANCH 66 UNLAWFULLY NEGLECTED THE PERFORMANCE OF ITS MINISTERIAL DUTY WHEN IT DENIED THE ISSUANCE OF A WRIT OF EXECUTION.

In advocacy of its position, FGU argues that the decision is already final and executory and, accordingly, a writ of execution should issue. The lower court should not be allowed to hear the matter of turnover of the refrigerators to FGU because it was not an issue raised in the Answer of GPS. Neither was it argued by GPS in the CA and in this Court. It was only brought out after the decision became final and executory.

Indeed, a writ of mandamus lies to compel a judge to issue a writ of execution when the judgment had already become final and executory and the prevailing party is entitled to the same as a matter of right.[10] Fundamental is the rule that where the judgment of a higher court has become final and executory and has been returned to the lower court, the only function of the latter is the ministerial act of carrying out the decision and issuing the writ of execution.[11] In addition, a final and executory judgment can no longer be amended by adding thereto a relief not originally included. In short, once a judgment becomes final, the winning party is entitled to a writ of execution and the issuance thereof becomes a court's ministerial duty. The lower court cannot vary the mandate of the superior court or reexamine it for any other purpose other than execution; much less may it review the same upon any matter decided on appeal or error apparent; nor intermeddle with it further than to settle so much as has been demanded.[12] Under the doctrine of finality of judgment or immutability of judgment, a decision that has acquired finality becomes immutable and unalterable, and may no longer be modified in any respect, even if the modification is meant to correct erroneous conclusions of fact and law, and whether it be made by the court that rendered it or by the Highest Court of the land. Any act which violates this principle must immediately be struck down. But like any other rule, it has exceptions, namely: (1) the correction of clerical errors; (2) the so-called nunc pro tunc entries which cause no prejudice to any party; (3) void judgments; and (4) whenever circumstances transpire after the finality of the decision rendering its execution unjust and inequitable.[13] The exception to the doctrine of immutability of judgment has been applied in several cases in order to serve substantial justice. The early case of City of Butuan vs. Ortiz[14] is one where the Court held as follows:
Obviously a prevailing party in a civil action is entitled to a writ of execution of the final judgment obtained by him within five years from its entry (Section 443, Code of Civil Procedure). But it has been repeatedly held, and it is now well-settled in this jurisdiction, that when after judgment has been rendered and the latter has become final, facts and circumstances transpire which render its execution impossible or unjust, the interested party may ask the court to modify or alter the judgment to harmonize the same with justice and the facts (Molina vs. De la Riva, 8 Phil. 569; Behn, Meyer & Co. vs. McMicking,

11 Phil. 276; Warner, Barnes & Co. vs. Jaucian, 13 Phil. 4; Espiritu vs. Crossfield and Guash, 14 Phil. 588; Flor Mata vs. Lichauco and Salinas, 36 Phil. 809). In the instant case the respondent Cleofas alleged that subsequent to the judgment obtained by Sto. Domingo, they entered into an agreement which showed that he was no longer indebted in the amount claimed of P995, but in a lesser amount. Sto. Domingo had no right to an execution for the amount claimed by him. (De la Costa vs. Cleofas, 67 Phil. 686-693).

Shortly after City of Butuan v. Ortiz, the case of Candelario v. Caizares[15] was promulgated, where it was written that:
After a judgment has become final, if there is evidence of an event or circumstance which would affect or change the rights of the parties thereto, the court should be allowed to admit evidence of such new facts and circumstances, and thereafter suspend execution thereof and grant relief as the new facts and circumstances warrant. We, therefore, find that the ruling of the court declaring that the order for the payment ofP40,000.00 is final and may not be reversed, is erroneous as above explained.

These rulings were reiterated in the cases of Abellana vs. Dosdos,[16] The City of Cebu vs. Mendoza[17] and PCI Leasing and Finance, Inc. v Antonio Milan.[18] In these cases, there were compelling circumstances which clearly warranted the exercise of the Courts equity jurisdiction. In the case at bench, the Court agrees with the RTC that there is indeed a need to find out the whereabouts of the subject refrigerators. For this purpose, a hearing is necessary to determine the issue of whether or not there was an actual turnover of the subject refrigerators to FGU by the assured CII. If there was an actual turnover, it is very important to find out whether FGU sold the subject refrigerators to third parties and profited from such sale. These questions were brought about by the contention of GPS in its Opposition to Motion for Execution[19] that after the assured, CII, was fully compensated for its claim on the damaged refrigerators, it delivered the possession of the subject refrigerators to FGU as shown in the certification of the Accounting/Administrative Manager of CII. Thereafter, the subject refrigerators were sold by FGU to third parties and FGU received and appropriated the consideration and proceeds of the sale. GPS claims that it verified the whereabouts of the subject refrigerators from the CII because it wanted to repair and sell them to compensate FGU.

If, indeed, there was an actual delivery of the refrigerators and FGU profited from the sale after the delivery, there would be an unjust enrichment if the realized profit would not be deducted from the judgment amount. The Court is not precluded from rectifying errors of judgment if blind and stubborn adherence to the doctrine of immutability of final judgments would involve the sacrifice of justice for technicality.[20] WHEREFORE, the petition is DISMISSED. SO ORDERED.

JOSE CATRAL MENDOZA Associate Justice