Civ Pro Caso

8/13/2019 Civ Pro Caso

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Republic of the PhilippinesSUPREME 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, RAMONARELLANO, 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 Branch135, Regional Trial Court of Makati City, and BERNARDO DE LEON.Respondents.

D E C I S I O N

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 byBernardo de Leon seeking the reversal and setting aside of the Decision1of the Court of Appeals(CA), dated November 21, 2007, in CA-G.R. SP No. 90328 which dismissed his petition forcertiorari. De Leon also assails the CA Resolution2dated March 4, 2008 denying his Motion forReconsideration.

On the other hand, G.R. No. 182678 is a petition for certiorari under Rule 65 of the Rules ofCourt filed by the Public Estates Authority (PEA)3seeking the nullification of the Orders datedDecember 28, 2007 and March 4, 2008 of the Regional Trial Court (RTC) of Makati City, Branch135 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 Damageswith Prayer for Preliminary Injunction before the Regional Trial Court [RTC] of Makati City, raffledto Branch 135, against respondent Public Estates Authority ("PEA"), a government-ownedcorporation, as well as its officers, herein private respondents Ramon Arellano, Jr., Ricardo Penaand Reymundo Orpilla. The suit for damages hinged on the alleged unlawful destruction of DeLeons 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 hisfamily for more than 50 years. Essentially, De Leon prayed thatone, lawful possession of theland in question be awarded to him; two, PEA be ordered to pay damages for demolishing theimprovements 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 subjectpremises.
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The court a quo found merit in De Leons application for writ of preliminary injunction and thusissued 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 meritsof the case, this Court finds that plaintiff (De Leon) has duly established by preponderance ofevidence that he has a legal right over the subject matter of the instant case and is entitled to theinjunctive relief demanded for and may suffer irreparable damage or injury if such right is notprotected 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 ofP500,000.00,let a writ of preliminary injunction be issued against the defendants, their agents, representativesand other persons (PEA and its officers) acting for and in their behalf are hereby enjoined fromdisturbing the peaceful possession of plaintiff (De Leon) and his co-owners over Lot 5155 andfurther, from destroying and/or removing whatever other improvements thereon constructed, untilfurther orders of this Court.

SO ORDERED. (Emphasis supplied)

PEA sought recourse before the Supreme Court through a Petition for Certiorari with Prayer for aRestraining Order, ascribing grave abuse of discretion against the court a quo for issuinginjunctive relief. The Petition was later referred to this Court for proper determination anddisposition, 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 thecourt a quo did not act in a capricious, arbitrary and whimsical exercise of power in issuing thewrit of preliminary injunction against PEA. The Ninth Division ruled that the court a quo wasprecisely 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 5155was a salvage zone until it was reclaimed through government efforts in 1982. The land waspreviously under water on the coastline which reached nine to twenty meters deep. In 1989, PEAstarted constructing R-1 Toll Expressway Road for the Manila-Cavite Coastal Road, whichproject directly traversed Lot 5155. PEA argued that the documentary evidence presented by DeLeon 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 inoccupation since time immemorial.

Ruling squarely on the issue adduced before it, the Supreme Court declared that Lot 5155 was apublic land so that De Leons occupation thereof, no matter how long ago, could not conferownership or possessory rights. Prescinding therefrom, no writ of injunction may lie to protect DeLeons nebulous right of possession. Accordingly, in its Decision dated 20 November 2000, theSupreme 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. Indue course, PEA moved for the issuance of a writ of execution praying that De Leon and


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persons claiming rights under him be ordered to vacate and peaceably surrender possession ofLot 5155.

Acting on PEAs motion, the court a quo issued the first assailed Order dated 15 September2004, 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 andall persons claiming rights under him to vacate and peaceably turn over possession of Lot 5155to defendant Public Estate[s] Authority.

SO ORDERED.

As could well be expected, De Leon moved for reconsideration thereof and quashal of the writ ofexecution. 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 Decisiondated 20 November 2000 as it did not categorically direct him to surrender possession of Lot5155 in favor of PEA.

However, both motions met the same fate as these were denied by the court a quo in the seconddisputed Order dated 29 April 2005.4

Dissatisfied, De Leon filed another Motion for Reconsideration dated July 1, 2005, but the samewas 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 TemporaryRestraining Order (TRO) and Issuance of Writ of Preliminary Injunction but the same was deniedby the CA in a Resolution dated April 24, 2006.

Subsequently, De Leon filed a second special civil action for certiorari with the CA seeking toannul and set aside the same RTC Orders dated September 15, 2004 and April 29, 2005, aswell 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 Demolition5praying thatthe RTC issue a Special Order directing De Leon and persons claiming under him to remove allimprovements erected inside the premises of the subject property and, in case of failure toremove 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 Order6holding in abeyance the Resolution of PEAsMotion. PEA filed a Motion for Reconsideration,7but it was denied by the RTC in an Order8datedJanuary 12, 2007.

On February 27, 2007, PEA filed an Omnibus Motion9to dismiss or, in the alternative, resolvethe petitions in CA-G.R. SP No. 90328 and CA-G.R. SP No. 90984.

In its Decision10dated 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. SPNo. 90328 holding that an earlier decision promulgated by the Supreme Court, finding the
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subject property to be public and that De Leon has no title and no clear legal right over thedisputed lot, has already attained finality.11De Leon filed a Motion for Reconsideration, but theCA denied it via its Resolution12dated March 4, 2008.

Thereafter, PEA filed an Urgent Motion to Resolve (Re: Very Urgent Motion for Issuance of Writof Demolition).13

On December 28, 2007, the RTC issued an Order14holding in abeyance the resolution of PEAsMotion 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 forReconsideration.

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 forcertiorari, docketed as G.R. No. 182678, questioning the Orders of the RTC of Makati City, datedDecember 28, 2007 and March 4, 2008.

In G.R. No. 181970, De Leon questions the Decision of the CA on the following grounds: (a) hecan only be removed from the subject land through ejectment proceedings; (b) the Decision ofthis Court in G.R. No. 112172 merely ordered the dismissal of De Leons complaint for damagesin Civil Case No. 93-143; and (c) even though petitioner is not the owner and has no title to thesubject 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 abuseof 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 Substitutionstating that PEA had transferred its ownership and ceded its interests over the subject propertyto the City of Paraaque as full payment for all of the formers real property tax liabilities. As aconsequence, the movants prayed that PEA be substituted by the City of Paraaque aspetitioner in G.R. No. 182678 and respondent in G.R. No. 181970.16

In a Resolution17dated on October 14, 2009, this Court granted the Motion for Substitution filedby 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 RTCshould 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 beensettled and laid to rest in this Courts Decision dated November 20, 2000 in G.R. No. 112172entitled, Public Estates Authority v. Court of Appeals (PEA v. CA).18In the said case, the Courtruled thus:

The issue raised is whether respondent and his brothers and sisters were lawful owners andpossessors of Lot 5155 by mere claim of ownership by possession for a period of at least fifty

(50) years.
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The Court of Appeals ruled that respondent Bernardo de Leon and his brothers and sisters werelawful owners and possessors of Lot 5155 entitled to protection by injunction against anyonedisturbing their peaceful possession of said Lot.

The ruling is erroneous. An applicant seeking to establish ownership of land must conclusivelyshow that he is the owner in fee simple, for the standing presumption is that all lands belong tothe public domain of the State, unless acquired from the Government either by purchase or bygrant, except lands possessed by an occupant and his predecessors since time immemorial, forsuch possession would justify the presumption that the land had never been part of the publicdomain, 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 notitle thereto at all. His claim of ownership is based on mere possession by himself and hispredecessors-in-interests, who claim to have been in open, continuous, exclusive and notoriouspossession of the land in question, under a bona fide claim of ownership for a period of at leastfifty (50) years. However, the survey plan for the land was approved only in 1992, andrespondent paid the realty taxes thereon on October 30, 1992, shortly before the filing of the suitbelow 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 anddisposable on March 27, 1972, per certificate of the Department of Environment and NaturalResources. It is obvious that respondents possession has not ripened into ownership.

x x x x

Consequently, respondent De Leon has no clear legal right to the lot in question, and a writ ofinjunction 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 andpossession of the subject lot should not have been taken up by the court on the ground that hiscomplaint is only for damages. De Leon must be aware that his action for damages is anchoredon his claim that he owns and possesses the subject property.20On this basis, it would beinevitable for the court to discuss the issues of whether he, in fact, owns the disputed propertyand, as such, has the right to possess the same. Moreover, it is clear from this Courts Decisionin PEA v. CA that the main issue resolved therein was "whether respondent [De Leon] and hisbrothers and sisters were the lawful owners and possessors of Lot 5155 by mere claim ofownership 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 fordamages and nothing more, and that the RTC erred and committed grave abuse of discretion inissuing a writ of execution placing PEA in possession of the disputed property. He insists that hecan 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 tobe executed; an execution is void if it is in excess of and beyond the original judgment oraward.21The settled general principle is that a writ of execution must conform strictly to everyessential particular of the judgment promulgated, and may not vary the terms of the judgment itseeks 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.23Where theownership of a parcel of land was decreed in the judgment, the delivery of the possession of theland should be considered included in the decision, it appearing that the defeated partys claimto the possession thereof is based on his claim of ownership.24Furthermore, adjudication ofownership would include the delivery of possession if the defeated party has not shown any rightto possess the land independently of his claim of ownership which was rejected.25This is
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precisely what happened in the present case. This Court had already declared the disputedproperty as owned by the State and that De Leon does not have any right to possess the landindependent of his claim of ownership.

In addition, a judgment for the delivery or restitution of property is essentially an order to placethe prevailing party in possession of the property.26If the defendant refuses to surrenderpossession of the property to the prevailing party, the sheriff or other proper officer should ousthim.27No express order to this effect needs to be stated in the decision; nor is a categoricalstatement needed in the decision that in such event the sheriff or other proper officer shall havethe authority to remove the improvements on the property if the defendant fails to do so within areasonable period of time.28The removal of the improvements on the land under thesecircumstances is deemed read into the decision, subject only to the issuance of a special orderby 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.30In the present case, it wouldbe redundant for PEA to go back to court and file an ejectment case simply to establish its rightto 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 decisionin PEA v. CA, but rather, was a necessary complement thereto. Such writ was but an essentialconsequence of this Courts ruling affirming the nature of the subject parcel of land as public andat the same time dismissing De Leons claims of ownership and possession. To further requirePEA 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 thesubject land, much less a Manila-Cavite Coastal Road traversing it, at any time ever since, untilnow" and that "allegations of a government project in the subject land and of such Roadtraversing the subject land have been downright falsities and lies and mere concoctions ofrespondent PEA."31However, 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 beenenjoined by the writ of injunction issued by the trial court."

In any case, De Leons argument that there was no government infrastructure project in thesubject property begs the issue of ownership and rightful possession. The subject lot wasproperly identified. There is no dispute as to its exact location. Hence, whether or not there is agovernment project existing within the premises or that which traverses it is not relevant to theissue of whether petitioner is the owner of the disputed lot and, therefore, has legal possessionthereof.

As to whether or not the RTC committed grave abuse of discretion in holding in abeyance theresolution of PEAs Motion for the Issuance of a Writ of Demolition, Section 7,32Rule 65 of the

Rules of Court provides the general rule that the mere pendency of a special civil action forcertiorari commenced in relation to a case pending before a lower court or court of origin doesnot stay the proceedings therein in the absence of a writ of preliminary injunction or temporaryrestraining order. It is true that there are instances where, even if there is no writ of preliminaryinjunction or temporary restraining order issued by a higher court, it would be proper for a lowercourt or court of origin to suspend its proceedings on the precept of judicial courtesy.33Theprinciple of judicial courtesy, however, remains to be the exception rather than the rule. As heldby this Court in Go v. Abrogar,34the precept of judicial courtesy should not be appliedindiscriminately and haphazardly if we are to maintain the relevance of Section 7, Rule 65 of theRules 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:
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The public respondent shall proceed with the principal case within ten (10) days from the filing ofa petition for certiorari with a higher court or tribunal, absent a temporary restraining order or apreliminary injunction, or upon its expiration. Failure of the public respondent to proceed with theprincipal case may be a ground for an administrative charge.1avvphi1

While the above quoted amendment may not be applied in the instant case, as A.M. No. 07-7-12-SC was made effective only on December 27, 2007, the provisions of the amendatory ruleclearly underscores the urgency of proceeding with the principal case in the absence of atemporary restraining order or a preliminary injunction.

This urgency is even more pronounced in the present case, considering that this Courtsjudgment in PEA v. CA, finding that De Leon does not own the subject property and is notentitled to its possession, had long become final and executory. As a consequence, the writ ofexecution, as well as the writ of demolition, should be issued as a matter of course, in theabsence of any order restraining their issuance. In fact, the writ of demolition is merely anancillary process to carry out the Order previously made by the RTC for the execution of thisCourts 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 alreadydetermined with finality that he is not the owner of the disputed property and that he has no rightto possess the same independent of his claim of ownership.

Furthermore, the Order of the RTC holding in abeyance the resolution of PEAs Motion for theIssuance of a Writ of Demolition also appears to be a circumvention of the provisions of Section5, Rule 58 of the Rules of Court, which limit the period of effectivity of restraining orders issuedby the courts. In fact, the assailed Orders of the RTC have even become more potent than aTRO issued by the CA because, under the Rules of Court, a TRO issued by the CA is effectiveonly 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 Writ of Demolition was made to depend uponthe finality of the judgment in G.R. No. 181970. Based on the foregoing, the Court finds that theRTC committed grave abuse of discretion in issuing the assailed Orders dated December 28,2007 and March 4, 2008.1avvphi1

Finally, the Court reminds the De Leon that it does not allow the piecemeal interpretation of itsDecisions as a means to advance his case. To get the true intent and meaning of a decision, nospecific portion thereof should be isolated and read in this context, but the same must beconsidered in its entirety.35Read in this manner, PEAs right to possession of the subjectproperty, as well as the removal of the improvements or structures existing thereon, fully followsafter considering the entirety of the Courts decision in PEA v. CA. This is consistent with theprovisions 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. -

x x x x

(c) Delivery or restitution of real property. - The officer shall demand of the personagainst whom the judgment for the delivery or restitution of real property is rendered andall 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, theofficer shall oust all such persons therefrom with the assistance, if necessary, ofappropriate peace officers, and employing such means as may be reasonably necessaryto retake possession, and place the judgment obligee in possession of such property.
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Any costs, damages, rents or profits awarded by the judgment shall be satisfied in thesame manner as a judgment for money.

(d) Removal of improvements on property subject of execution. - When the propertysubject of execution contains improvements constructed or planted by the judgmentobligor 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 afterdue hearing and after the former has failed to remove the same within a reasonable timefixed by the court.

As a final note, it bears to point out that this case has been dragging for more than 15 years andthe execution of this Courts judgment in PEA v. CA has been delayed for almost ten years nowsimply because De Leon filed a frivolous appeal against the RTCs order of execution based onarguments that cannot hold water. As a consequence, PEA is prevented from enjoying the fruitsof the final judgment in its favor. The Court agrees with the Office of the Solicitor General in itscontention that every litigation must come to an end once a judgment becomes final, executoryand unappealable. Just as a losing party has the right to file an appeal within the prescribedperiod, 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."36Tofrustrate it by dilatory schemes on the part of the losing party is to frustrate all the efforts, timeand expenditure of the courts.37It is in the interest of justice that this Court should write finis tothis 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 andResolution of the Court of Appeals in CA-G.R. SP No. 90328 dated November 21, 2007 andMarch 4, 2008, respectively, are AFFIRMED.

The petition for certiorari in G.R. No. 182678 is GRANTED. The assailed Orders of the RegionalTrial Court of Makati City, Branch 135, dated December 28, 2007 and March 4, 2008, areANNULLED and SET ASIDE.

The Regional Trial Court of Makati is hereby DIRECTED to hear and resolve PEAs Motion forthe Issuance of a Writ of Demolition with utmost dispatch. This Decision is IMMEDIATELYEXECUTORY. The Clerk of Court is DIRECTED to remand the records of the case to the courtof origin.

SO ORDERED.

DIOSDADO M. PERALTA

Associate Justice

WE CONCUR:

ANTONIO T. CARPIOAssociate Justice

Chairperson

CONCHITA CARPIO MORALES*Associate Justice

ROBERTO A. ABADAssociate Justice

JOSE CATRAL MENDOZAAssociate Justice
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Manila

SECOND DIVISION

G.R. No. 178495 July 26, 2010

SPOUSES RODOLFO A. NOCEDA and ERNA T. NOCEDA,Petitioners,vs.AURORA ARBIZO-DIRECTO,Respondent.

D E C I S I O N

NACHURA, J .:

Assailed in the instant petition is the Decision1of 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 hernephew, herein petitioner Rodolfo Noceda, for "Recovery of Possession and Ownership andRescission/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-heirshave 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 thelatter 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 theDeed of Donation dated June 1, 1981 revoked; (c) ordered defendant to vacate and reconveythat donated portion of Lot 2, Lot 1121 subject of the Deed of Donation dated June 1, 1981 tothe plaintiff or her heirs or assigns; (d) ordered the defendant to remove the house built insidethe donated portion at the defendants expense or pay a monthly rental ofP300.00 PhilippineCurrency; and (e) ordered the defendant to pay attorneys fees in the amount ofP5,000.00.2Thedecision 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 forrecovery of ownership and possession, and annulment of sale and damages against spousesAntonio and Dominga Arbizo, spouses Rodolfo and Erna Noceda, and Aurora Arbizo-Directowith 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 issuedin the name of Cecilia Obispo-Dahipon, pursuant to Free Patent No. 548781. Spouses Dahiponclaimed that the defendants therein purchased portions of the land from them without paying thefull amount. Except for Aurora, a compromise agreement was entered into by the parties, as aresult of which, a deed of absolute sale was executed, and TCT No. T-50730 was issued in thename of spouses Noceda for their portion of the land. For her part, Aurora questioned Dahiponsalleged 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 thefollowing fallo:

WHEREFORE, judgment is hereby rendered, ORDERING defendant Rodolfo Noceda toVACATE the portion known as Lot "C" of Lot 1121 per Exhibit E, which was allotted to plaintiff
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Aurora Arbizo-Directo. Except for this modification, the Decision dated November 6, 1991 of theRTC, Iba, Zambales, Branch 71, in Civil Case No. RTC-354-I, is hereby AFFIRMED in all otherrespects. 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 thefactual findings of the two courts below, and thus denied the petition on September 2, 1999.4Thedecision became final and executory, and a writ of execution was duly issued by the RTC onMarch 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, orderingthem to vacate the property. However, petitioners claimed that the land, which was the subjectmatter of Civil Case No. RTC-354-I, was the same parcel of land owned by spouses Dahiponfrom whom they purchased a portion; and that a title (TCT No. T-37468) was, in fact, issued intheir name. Petitioners prayed for the issuance of a writ of preliminary injunction to enjoin theimplementation 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 thatpetitioners, aware of their defeat in Civil Case No. RTC-354-I, surreptitiously negotiated withCecilia Obispo-Dahipon for the sale of the land and filed the present suit in order to subvert theexecution 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 ofpetitioners on the basis of the title emanating from that of Cecilia Obispo-Dahipon was alreadyraised 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 OFCONCLUSIVENESS OF JUDGMENT IS APPLICABLE UNDER THE FACTS OBTAINING INTHE 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 THEPRESENT CASE[.]6

Petitioners assert that res judicata7does not apply, considering that the essential requisites as tothe 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:
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Sec. 47. Effect of judgments or final orders. - The effect of a judgment or final order rendered bya court of the Philippines, having jurisdiction to pronounce the judgment or final order, may be asfollows:

x x x x

(b) In other cases, the judgment or final order is, with respect to the matterdirectly adjudged or as to any other matter that could have been raised in relationthereto, conclusive between the parties and their successors in interest by titlesubsequent to the commencement of the action or special proceeding, litigatingfor 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 orderwhich appears upon its face to have been so adjudged, or which actually andnecessarily included therein or necessary thereto.

The principle of res judicata lays down two main rules, namely: (1) the judgment or decree of acourt of competent jurisdiction on the merits concludes the litigation between the parties andtheir privies and constitutes a bar to a new action or suit involving the same cause of actioneither before the same or any other tribunal; and (2) any right, fact, or matter in issue directlyadjudicated or necessarily involved in the determination of an action before a competent court inwhich a judgment or decree is rendered on the merits is conclusively settled by the judgmenttherein and cannot again be litigated between the parties and their privies whether or not theclaims or demands, purposes, or subject matters of the two suits are the same. These two mainrules mark the distinction between the principles governing the two typical cases in which ajudgment may operate as evidence.8]The first general rule above stated, and which correspondsto 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) ofthe same section and rule, is known as "conclusiveness of judgment."9

The Court in Calalang v. Register of Deeds of Quezon City10explained the second conceptwhich we reiterate herein, to wit:

The second concept conclusiveness of judgment states that a fact or question which wasin issue in a former suit and was there judicially passed upon and determined by a court ofcompetent jurisdiction, is conclusively settled by the judgment therein as far as the parties to thataction and persons in privity with them are concerned and cannot be again litigated in any futureaction between such parties or their privies, in the same court or any other court of concurrentjurisdiction on either the same or different cause of action, while the judgment remainsunreversed by proper authority. It has been held that in order that a judgment in one action canbe 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 thesecond action, and the judgment will depend on the determination of that particular point orquestion, a former judgment between the same parties or their privies will be final and conclusivein the second if that same point or question was in issue and adjudicated in the first suit (Nabusv. Court of Appeals, 193 SCRA 732 [1991]). Identity of cause of action is not required but merelyidentity 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 barby 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 ofparticular facts or issues in another litigation between the same parties on a different claim or

cause of action.
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The general rule precluding the relitigation of material facts or questions which were in issue andadjudicated in former action are commonly applied to all matters essentially connected with thesubject matter of the litigation. Thus, it extends to questions necessarily implied in the finaljudgment, although no specific finding may have been made in reference thereto and althoughsuch matters were directly referred to in the pleadings and were not actually or formallypresented. 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 settledthat matter as to all future actions between the parties and if a judgment necessarilypresupposes 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 isclosely related to the previous case (Civil Case No. RTC-354-I), where petitioners raised theissue of ownership and possession of Lot No. 1121 and the annulment of the donation of said lotto them. The RTC found for respondent, declaring the deed of donation she executed in favor ofpetitioners revoked; and ordered petitioners to vacate and reconvey the donated portion torespondent. The decision of the RTC was affirmed by the CA, and became final with the denialof the petition for review by this Court in G.R. No. 119730. In that case, the Court noted theestablished 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 toprivate respondent Directo, thus, petitioners act of occupying the portion pertaining to privaterespondent Directo without the latters knowledge and consent is an act of usurpation which isan offense against the property of the donor and considered as an act of ingratitude of a doneeagainst the donor."12Clearly, therefore, petitioners have no right of ownership or possession overthe land in question.1avvph!1

Under the principle of conclusiveness of judgment, such material fact becomes binding andconclusive on the parties. When a right or fact has been judicially tried and determined by a courtof competent jurisdiction, or when an opportunity for such trial has been given, the judgment ofthe court, as long as it remains unreversed, should be conclusive upon the parties and those inprivity with them.13Thus, 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 therelitigation of particular facts or issues in another litigation between the same parties on adifferent claim or cause of action.14

Furthermore, we agree that petitioners instituted the instant action with unclean hands. Aware oftheir defeat in the previous case, they attempted to thwart execution and assert their allegedownership 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 theCourt was not unaware of Dahipons alleged claim over the same parcel of land. It noted thatDahipon did not even bother to appear in court to present her free patent upon respondentsrequest, or to intervene in the case, if she really had any legitimate interest over the land inquestion.15In 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 samewas in the adverse possession of another.

Thus, we find no reversible error in the appellate courts ruling that petitioners are in fact buyersin bad faith. We quote:

With appellants actual knowledge of facts that would impel a reasonable man to inquire furtheron [a] possible defect in the title of Obispo, considering that she was found not to have been inactual occupation of the land in CA-G.R. CV No. 38126, they cannot simply invoke protection ofthe law as purchasers in good faith and for value. In a suit to quiet title, defendant may set upequitable as well as legal defenses, including acquisition of title by adverse possession and aprior 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 ofpossession and ownership over the disputed portion, which was adjudged in favor of appellee in
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Civil Case No. RTC-354-I, thus provide ample justification for the court a quo to grant thedemurrer 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 intoto.

SO ORDERED.

ANTONIO EDUARDO B. NACHURAAssociate Justice

WE CONCUR:

ANTONIO T. CARPIOAssociate Justice

Chairperson

DIOSDADO M. PERALTAAssociate Justice

ROBERTO A. ABADAssociate Justice

JOSE CATRAL MENDOZAAssociate Justice

A T T E S T A T I O N

I attest that the conclusions in the above Decision had been reached in consultation before thecase was assigned to the writer of the opinion of the Courts Division.

ANTONIO T. CARPIOAssociate JusticeChairperson, Second Division

C E R T I F I C A T I O N

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 thecase was assigned to the writer of the opinion of the Courts Division.

RENATO C. CORONAChief Justice
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Manila

THIRD DIVISION

G.R. NO. 156596 August 24, 2007

ADELAIDA INFANTE,Petitioner,vs.ARAN BUILDERS, INC.,Respondent.*

D E C I S I O N

AUSTRIA-MARTINEZ, J .:

This resolves the Petition for Review on Certiorariunder 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 ofMuntinlupa City (RTC).

The undisputed facts and issues raised in the lower courts are accurately summarized by the CAas follows:

Before the Regional Trial Court of Muntinlupa City (or "Muntinlupa RTC"; Branch 276), presidedover by Hon. Norma C. Perello (or "respondent judge"), was an action for revival of judgmentfiled 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 CivilCase No. 15563.

The Makati RTC judgment, which became final and executory on November 16, 1994, decreedas follows:

26. WHEREFORE, the Court hereby renders judgment as follows:

26.1 The defendant ADELAIDA B. INFANTE is ordered to do the following withinthirty (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) taxreceipts; (e) proof of up to date payment of Subdivision Association duesreferred 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 P500,000.00in favor of the plaintiff;

26.1.3. To pay the capital gains tax, documentary stamp taxes and othertaxes which the Bureau of Internal Revenue may assess in connection
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with the sale mentioned in the preceding paragraph and to submit to theplaintiff proof of such payment;

26.1.4. To secure the written conformity of AYALA CORPORATION tothe 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 anddeliver to AYALA CORPORATION the certificate of title issued in thename of plaintiff pursuant to such registration;

26.2 Upon the compliance of the defendant with the preceding directives, theplaintiff 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 theMuntinlupa RTC has no jurisdiction over the persons of the parties and that venue wasimproperly 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 beemphasized that at that time there was still no Regional Trial Court in Muntinlupa City, thenunder the territorial jurisdiction of the Makati Courts, so that cases from this City were tried andheard at Makati City. With the creation of the Regional Trial Courts of Muntinlupa City, mattersinvolving properties located in this City, and cases involving Muntinlupa City residents were allordered 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 ofland located in Muntinlupa City. It is this judgment which is sought to be enforced thru this actionwhich necessarily involves the interest, possession, title, and ownership of the parcel of landlocated in Muntinlupa city and adjudged to Plaintiff. It goes without saying that the complaintshould 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 ascribesgrave abuse of discretion amounting to lack or excess of jurisdiction on the part of respondentjudge for "erroneously holding that Civil Case No. 01-164 is a revival of judgment which declaredprivate respondent as the owner of a parcel of land located in Muntinlupa City and (that) thejudgment rendered by the (Makati RTC) in Civil Case No. 15563 sought to be enforced


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necessarily involves the interest, possession, title and ownership of the parcel of land located inMuntinlupa City."

Petitioner asserts that the complaint for specific performance and damages before the MakatiRTC is a personal action and, therefore, the suit to revive the judgment therein is also personalin nature; and that, consequently, the venue of the action for revival of judgment is either MakatiCity or Paraaque City where private respondent and petitioner respectively reside, at theelection 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"; andthat, 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 privaterespondent. The CA held that since the judgment sought to be revived was rendered in an actioninvolving title to or possession of real property, or interest therein, the action for revival ofjudgment is then an action in remwhich should be filed with the Regional Trial Court of the placewhere the real property is located. Petitioner moved for reconsideration of the CA Decision butthe motion was denied per Resolution dated January 7, 2003.

Hence, herein petition. Petitioner claims that the CA erred in finding that the complaint for revivalof judgment is an action in remwhich was correctly filed with the RTC of the place where thedisputed real property is located.

The petition is unmeritorious.

Petitioner insists that the action for revival of judgment is an action in personam; therefore, thecomplaint should be filed with the RTC of the place where either petitioner or private respondentresides. 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 theground of improper venue.

Private respondent is of the opinion that the judgment it is seeking to revive involves interestover real property. As such, the present action for revival is a real action, and venue wasproperly 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 forrevival 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 whichcourt the action for revival of judgment should be filed.

InAldeguer v. Gemelo,3the Court held that:

x x x an action upon a judgment must be brought either in the same court where said judgmentwas rendered or in the place where the plaintiff or defendant resides, or in any other placedesignated by the statutes which treat of the venue of actions in general. (Emphasissupplied)4

but emphasized that other provisions in the rules of procedure which fix the venue of actions ingeneral must be considered.5

Under the present Rules of Court, Sections 1 and 2 of Rule 4 provide:
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Section 1. Venue of real actions. - Actions affecting title to or possession of real property, orinterest therein, shall be commenced and tried in the proper court which has jurisdiction over thearea wherein the real property involved, or a portion thereof, is situated.

x x x x

Section 2. Venue of personal actions. - All other actions may be commenced and tried where theplaintiff or any of the principal plaintiffs resides, or where the defendant or any of the principaldefendants resides, or in the case of a non-resident defendant where he may be found, at theelection of the plaintiff.

Thus, the proper venue depends on the determination of whether the present action for revival ofjudgment is a real action or a personal action. Applying the afore-quoted rules on venue, if theaction 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 islocated. If such action does not fall under the category of real actions, it is then a personal actionthat 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 andshould be filed in the court of the place where either the plaintiff or defendant resides, petitionercites the statements made by the Court inAldeguer v. Gemelo6and Donnelly v. Court of FirstInstance of Manila7. Petitioner, however, seriously misunderstood the Court's rulings in saidcases.

InAldeguer, what the Court stated was that "[t]he action for the execution of ajudgmentfor damagesis a personal one, and under section 377 [of the Code of Civil Procedure], it shouldbe brought in any province where the plaintiff or the defendant resides, at the election of theplaintiff"8(Emphasis and underscoring supplied). Petitioner apparently took such statement tomean that any action for revival of judgment should be considered as a personal one. Thisthinking is incorrect. The Court specified that the judgment sought to be revived in said case wasa judgment for damages. The judgment subject of the action for revival did not involve or affectany title to or possession of real property or any interest therein. The complaint filed in the revivalcase did not fall under the category of real actions and, thus, the action necessarily fell under thecategory 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 ofjudgment is one quasi in rem and, therefore, service of summons may be effected thrupublication; and (b) whether the second action for revival of judgment (Civil Case No. 76166) hasalready prescribed. To our mind, the first is not a proper and justiciable issue in thepresent proceedingsx x x. Nevertheless, let it be said that an action to revive a judgment is apersonal one. (Emphasis supplied)9

The Court clearly pointed out that in said case, the issue on whether an action for revival ofjudgment is quasi in remwas not yet proper and justiciable. Therefore, the foregoing statementcannot be used as a precedent,as it was merely an obiter dictum.Moreover, as inAldeguer,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 actionfor revival in said case was categorized as a personal one.

Clearly, the Court's classification inAldeguerand Donnellyof the actions for revival of judgmentas 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 apersonal action.
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The complaint for revival of judgment alleges that a final and executory judgment has orderedherein petitioner to execute a deed of sale over a parcel of land in Ayala Alabang Subdivision infavor of herein private respondent; pay all pertinent taxes in connection with said sale; registerthe deed of sale with the Registry of Deeds and deliver to Ayala Corporation the certificate of titleissued in the name of private respondent. The same judgment ordered private respondent to paypetitioner 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 privaterespondent's repeated requests and demands, and that the latter was compelled to file theaction for revival of judgment. Private respondent then prayed that the judgment be revived anda writ of execution be issued to enforce said judgment.

The previous judgment has conclusively declared private respondent's right to have the title overthe disputed property conveyed to it. It is, therefore, undeniable that private respondent has anestablished interest over the lot in question; and to protect such right or interest, privaterespondent brought suit to revive the previous judgment. The sole reason for the present actionto 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 overreal property.1avvphi1

The present case for revival of judgment being a real action, the complaint should indeed be filedwith the Regional Trial Court of the place where the realty is located.

Section 18 of Batas Pambansa Bilang129 provides:

Sec. 18.Authority to define territory appurtenant to each branch. - The Supreme Court shalldefine the territory over which a branch of the Regional Trial Court shall exercise itsauthority. The territory thus defined shall be deemed to be the territorial area of thebranch concerned for purposes of determining the venue of all suits, proceedings oractions,whether civil or criminal, as well as determining the Metropolitan Trial Courts, MunicipalTrial 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 readilyaccessible to the people of the different parts of the region and making the attendance oflitigants and witnesses as inexpensive as possible. (Emphasis supplied)1avvphi1

From the foregoing, it is quite clear that a branch of the Regional Trial Court shall exerciseits 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 ofRepublic Act No. 7154, entitled An Act to Amend Section Fourteenof BatasPambansaBilang129, 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 RegionalTrial Court in Muntinlupa. Thus, it is now the Regional Trial Court in Muntinlupa City which hasterritorial 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 ofMuntinlupa City, Branch 276 when it denied petitioner's motion to dismiss; and the CA did notcommit any error in affirming the same.

WHEREFORE, the petition is DENIED. The Decision dated August 12, 2002 and Resolutiondated January 7, 2003 of the Court of Appeals are AFFIRMED.

SO ORDERED.

MA. ALICIA AUSTRIA-MARTINEZAssociate Justice


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Republic of the Philippines

SUPREME COURTManila

SECOND DIVISION

G.R. No. 183984 April 13, 2011

ARTURO SARTE FLORES,Petitioner,vs.

SPOUSES ENRICO L. LINDO, JR. and EDNA C. LINDO,Respondents.D E C I S I O N

CARPIO, J .:

The CaseBefore the Court is a petition for review1assailing the 30 May 2008 Decision2and 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 Note5and 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 tojudicial 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 Order7dated 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 CourtOn 22 July 2005, the RTC, Branch 42 issued an Order8denying the motion to dismiss. The RTC,

Branch 42 ruled that res judicata will not apply to rights, claims or demands which, although
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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

Order9dated 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 PreliminaryInjunction and/or Temporary Restraining Order before the Court of Appeals.

The Decision of the Court of AppealsIn 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 ruledthat 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 IssueThe 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 CourtThe 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.10The 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.11An

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 themortgaged properties and the residence of the parties.12

The two remedies are alternative and each remedy is complete by itself.13If the mortgagee opts

to foreclose the real estate mortgage, he waives the action for the collection of the debt, and vice

versa.14The 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 unsatisfiedjudgment 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
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Civ Pro Caso

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