G.R. No. L-54323 August 19, 1988
The extension will be
JOSE L. LOPEZ, as Judicial Administrator of Intestate Estate of the late Magdalena
Jimenea and his own behalf and LOLITA V. LOPEZ, plaintiffs-appellants,
vs.
ENRIQUE L. S. VILLARUEL, JAVIER L. S. VILLARUEL and MARIA LUISA VILLARUEL
de LUZURIAGA, accompanied by her husband, CLAUDIO R. DE
LUZURIAGA, defendants-appellees.
Juan S. Aritao, Sr. for plaintiffs-appellants.
Dominador G. Garin collaborating counsel for plaintiffs-appellants.
Reyes & Perez Law Office for defendants-appellees.
MELENCIO-HERRERA, J.:
The Court upholds the Order * of the then Court of First Instance of Negros Occidental, dated
5 May 1971, dismissing Civil Case No. 9651 for Specific Performance and Damages, which
case, on appeal to the Court of Appeals, was elevated to us by that Court on pure questions
of law.
The controversy revolves around a contract of lease of three (3) subdivision lots entered into
in 1955 between the spouses Domingo Lopez and Magdalena Jimenea (now deceased), as
Lessees (plaintiff-appellants herein), and Enrique L. S. Villaruel, Javier L. S. Villaruel and
Maria Luisa Villaruel de Luzuriaga, as Lessors (defendants-appellees in this case).
Paragraph 4 of the Lease Contract provided:
That the term of this lease shall be for a period of TEN (10) years, counted
from the date LESSEES commence business upon the building which, under
the terms of Par. "Second" hereof, they will construct on the lots herein
described and leased.
Provided, however, that after said ten-year period above provided, the
LESSEES shall continue in possession and lease of the said lots and
building, subject to whatever terms regarding the rate of rental and other
conditions which the parties hereto shall then agree upon. Provided further
that at the end of this period of extension, the LESSORS shall have the right
to buy the building from the LESSEES at a price which shall be fixed and
computed on the basis of the LESSEES'original expenditure in putting up
the said building deducting reasonable depreciation.
for another period of ten years. (Brief for Plaintiffs-Appellants, pp. 2-3).
The Lessees paid rentals of P600.00 a month for a period of ten (10) years until September
1965. After that date, the Lessors made several requests, oral and written, upon the Lessees
for a conference to fix the rate of rentals if the lease was to be extended for another ten (10)
years. The Lessees offered to pay P1,000.00 monthly but the Lessors demanded P1,500.00
per lot, per month, so nothing came out of the conference. The Lessees made payment of
P1,800.00 for the months of October, November and December, 1965, at the old rate of
P600.00 a month. A temporary receipt therefor (Exhibit "6") was issued by an employee of
the Lessors.
Notices to vacate were sent by the Lessors to the Lessees in January and February 1966
but the latter refused to vacate.
On 31 March 1966, the Lessors filed an Ejectment case (Civil Case No. 4946) against the
Lessees before the Municipal Court of Bacolod City (Ejectment Suit). Judgment was
rendered in favor of the Lessors, and the Lessees were ordered to vacate.
On appeal to the former Court of First Instance (CFI) of Negros Occidental (Civil Case No.
8319), and after trial de novo, that Court, on 12 July 1968, affirmed the Municipal Court judg-
inent and also ordered the Lessees to vacate. Concluded the CFI:
It is clear that no extension of the contract...was perfected, expressly or
impliedly ...
It is not right for the defendants (the Lessees) to assume that the Contract
of Lease ... was extended for ten years from October, 1965, to September,
1975 simply because the plaintiffs received the Pl,800.00 paid by them on
December 24, 1965. The testimony of Maria Lourdes Luzuriaga that Exh. "6"
is merely a temporary receipt, as it was so designated in Exh."6" stands
undenied, and she explained that it was subject to whatever was to be
agreed upon between plaintiffs and defendants on a subsequent date
regarding the rate of rental inasmuch as no contract has yet been perfected
between them at the time the receipt was issued. That testimony is not
challenged nor denied by the defendants, hence it must be accorded due
faith and credibility in the absence of any evidence to the contrary. (Decision,
p. 29, Record on Appeal)
In due course, that Decision was also affirmed by the Court of Appeals (in CA-G.R. No.
43880-R), with judgment having become final and executory on 29 March 1972.
In the meantime, on 26 November 1970, the Lessees instituted Civil Case No. 9651 for
Specific Performance and Damages (the Specific Performance Case) against the Lessors
before the Court of First Instance of Negros Occidental. The Lessees prayed for judgment
condemning the Lessors:
1. To comply with their obligations under the Contract of Lease particularly:
A To grant plaintiffs an extension of another ten years to
expire on September 30,1975 for the lease of the three
subdivisions of the Lot No. 23 of the Bacolod Cadastre
covered by TCT No. 1-303 (95-A) R
B. In event the lease is terminated compel defendants jointly
and severally to buy buildings otherwise known as Floredith
Theatre in the amount of P500,000.00 minus only
P50,000.00 for depreciation.
2. Granting plaintiffs the right after termination of the lease to use the lot on
which the building stands without rental for the use of the lot until the full
price of the building is paid (Grand v. Court of Appeals, L- 12486);
3. Condemning the defendants jointly and solidarily to pay plaintiffs the
amount of P75,000.00 as damages, P50,000.00 as moral and exemplary
damages and P5,000.00 for attorney's fees and to pay the cost of this suit;
(Record on Appeal, pp. 6-7)
The Lessors filed a Motion to Dismiss founded on the pendency of another action, the
Ejectment Suit. The Trial Court overruled the Opposition to the Motion and, on 22 March
1971, ordered the dismissal of the Specific Performance Case, finding the Motion "to be well
founded." (ibid., p. 43)
The Order of dismissal was challenged before the Court of Appeals which, as heretofore,
stated, certified the case to us.
The Assignments of Errors read:
I to res adjudicata in the action under consideration (Municipality of Hagonoy vs. Sec. of
The lower Court erred in not finding that the cause of action in Civil Case
No. 8319, which is an Ejectment Case, being for the vacating of the
premises, and the payment of unpaid rentals, is different from the cause of
action in Civil Case No. 9651, which is for specific performance of the
obligation of defendants-appellees under the Contract of Lease to pay for
the value of the building constructed by the plaintiffs-appellants in the event
the lease of the land is terminated.
II
The lower Court erred in not finding that the subject matter of Civil Case No.
9651 could not have been included in Civil Case No. 8319 as the latter was
an Ejectment Case originally filed in an inferior Court which could not have
had jurisdiction over the subject matter of Civil Case No. 9651 which is for
specific performance and for a claim in the amount of P450,000.00 as value
of the building plus P75,000.00 as damages and P50,000.00 as moral and
exemplary damages and P5,000.00 for attorney's fees.
III
The lower Court erred in finding as well-founded the only ground raised by
defendants-appellees in their motion to dismiss Civil Case No. 9651, which
is that said case is barred by another action pending between the same
parties for the same cause.
IV
The lower Court erred in dismissing the complaint in Civil Case No. 9651.
(Brief for Plaintiffs-Appellants, pp. A-C)
The basic issue for resolution is whether or not the Ejectment Case is a bar to the subsequent
case for Specific Performance and Damages.
We rule in the affirmative and sustain the dismissal of the Specific Performance Case.
The pendency of another action between the same parties for the same cause is a ground
for dismissal of an action (Section 1 [e], Rule 16, Rules of Court). In order that the ground
may be invoked there must be between the action under consideration and the other action,
(1) Identity of parties, or at least such as representing the same interest in both actions; (2)
Identity of rights asserted and relief prayed for, the relief being founded on the same facts;
and (3) the Identity on the two preceding particulars should be such that any judgment which
may be rendered on the other action will, regardless of which party is successful, amount
Agriculture and Natural Resources, L-27595, October 26, 1976, 73 SCRA 507).
All the foregoing criteria are present in the case under consideration. The pivotal issue
between the parties is whether or not the Lessees should be allowed to continue occupying
the leased premises under the terms of the lease contract. This is the subject matter of the
action for Ejectment filed by the Lessors in the Municipal Court. It is also the main or principal
purpose of the action for Specific Performance and Damages subsequently filed by the
Lessees before the Court of First Instance. The cause of action for damages of approximately
P125,000.00, which the Lessees claim is beyond the jurisdiction of the Municipal Court, is
merely an incident to the main question of whether or not the Lessees should be allowed to
continue the lease for another period of ten (10) years. Incidental as well is the issue of the
purchase by the Lessors of the building constructed on the leased premises insisted on by
the Lessees.

The judgment in the Ejectment Suit amounted to an adjudication of the Specific Performance
Case, which prayed essentially for an extension of another ten (10) years, but which issue
had been resolved by the then Court of First Instance, acting as an appellate Court, when it
held "it is clear that no extension of the contract was perfected, expressly or impliedly" and
that "the defendants (the Lessees) have been occupying the three (3) lots in question without
benefit of contract whatsoever from October, 1965 up to the present time, and no rental was
paid by the defendants for the use thereof." (Decision, pp. 34-35, Record on Appeal). And,
contrary to the Lessees' contention, the Lease Contract did not obligate, but merely gave,
the Lessors the right to purchase the building constructed on the leased premises after the
termination of the contract which the Lessors opted not to exercise. In other words, the
Decision in the Ejectment Suit settled the issue in the Specific Performance Case, thereby
bringing the latter case squarely within the ambit of the res judicata doctrine.

We find, therefore, that the Trial Court acted correctly in dismissing the Specific Performance
Case. In fact, in filing the same, the Lessees had violated the principle prohibiting multiplicity
of suits.

The issue of whether the lessee has a right to occupy the land leased as
against the demand of the lessor should be properly threshed out in an
ejectment suit, not in an action for specific performance and damages filed
by the lessee. A party cannot, by varying the form of actions, or adopting a
different method of presenting his case, escape the operation of the principle
that the same cause of action shall not be twice litigated between the same
parties or their privies (Penalosa vs. Tuason, 22 Phil. 303,1912).

WHEREFORE, the Order appealed from is hereby AFFIRMED. With costs against plaintiffs-
appellants.

SO ORDERED.
G.R. No. 123293 March 5, 1998
ELISA C. FELICIANO, petitioner,
vs.
COURT OF APPEALS and ERNESTO BARON, respondents.
BELLOSILLO, J.:
This petition for review assails the Decision of the Court of Appeals promulgated on 9 October
1995 as well as its Resolution of 12 December 1995 in CA-G.R. SP No. 37450 1 which
reversed and set aside the decision of the Regional Trial Court of Quezon City, Branch 98,
in Civil Case No. Q-94-22391.
On 6 February 1978 Eleuterio Cosme obtained a loan of P50,000.00 from the Insular Bank
of Asia and America. To secure the loan, he mortgaged a parcel of land covered by TCT No.
198745 registered in his name "married to Asuncion Obando." The loan however was not
paid upon maturity, thus the mortgage was foreclosed extrajudicially and sold at public
auction with the bank as the highest bidder. After the lapse of the redemption period,
ownership over the land was consolidated in the bank and TCT No. 283860 was issued in its
name.
Later, Eleuterio Cosme and his wife Asuncion Obando died. Their daughters, Elisa C.
Feliciano and Arsenia C. Buendia, took possession of the property and exercised their rights
of ownership thereof as compulsory heirs of their deceased parents. In 1985 Elisa instituted
before the Regional Trial Court of Quezon City an action against the bank for the Annulment
of Mortgage, Certificate of Sale, Deed of Absolute Sale and TCT No. 283860, Reconveyance
with Petition for Issuance of a Writ of Preliminary Injunction and Damages.2 During the
pendency of the case, specifically on 15 February 1991, private respondent herein
Ernesto Baron bought the subject property from the bank and the corresponding Deed
of Absolute Sale was executed in his favor. On the basis of the sale, Baron demanded
from Elisa and Arsenia to pay rents and vacate the premises. Elisa refused insisting
that she was owner of the property and that it was currently the subject of a pending
litigation in the Regional Trial Court of Quezon City. 3 Hence, Baron filed a complaint
for ejectment before the Metropolitan Trial Court of Quezon City which, after due
consideration, dismissed the case on the ground of litis pendentia.
On appeal by Baron, the RTC affirmed the decision of the MeTC holding that litis
pendentia existed and that, in addition, the MeTC did not validly acquire jurisdiction
over the case since there was no sufficient averment in the complaint which would
bring the case within the purview of either forcible entry or unlawful detainer.
Undaunted by the adverse decisions of the lower courts, Baron elevated the case to
the Court of Appeals, which subsequently reversed the Regional Trial Court and
remanded the case to the court of origin for further proceedings. The Court of Appeals
held that litis pendentia was not present in this case as there was no identity of rights
asserted and reliefs prayed for in the Regional Trial Court and in the Metropolitan Trial
Court. That, further, the allegations in the complaint for ejectment adequately and
sufficiently established a cause for unlawful detainer by virtue of which the
jurisdiction of the Metropolitan Trial Court was properly laid.
Petitioner Elisa C. Feliciano now insists that the Court of Appeals misinterpreted and
misapplied the laws and jurisprudence on litis pendentia4 and on the acquisition or
absence of jurisdiction. Specifically, she maintains that there is identity of rights
asserted and reliefs prayed for in both the pending RTC case for annulment and
reconveyance with damages, and the MeTC case for ejectment, i.e., ownership and
possession of the subject property and that, additionally, a judgment in the pending
RTC case, regardless of which party is successful, will amount to res judicata in the
ejectment case. Consequently, there is litis pendentia, and the pending RTC case may
be pleaded in abatement of the pending MeTC case for ejectment.
On the question of jurisdiction, petitioner asserts that the allegations in the complaint
for ejectment do not show nor imply that there is unlawful withholding of material
possession by herein petitioner from respondent. Hence, the complaint is insufficient
to vest jurisdiction in the municipal trial court to entertain the ejectment suit.
Litis pendentia is a Latin term which literally means "a pending suit."5 It is variously
referred to in some decisions as lis pendens and auter action pendant.6 While it is
normally connected with the control which the court has on a property involved in a
suit during the continuance proceedings, 7 it is more interposed as a ground for the
dismissal of a civil action pending in court. 8
Litis pendentia as a ground for the dismissal of a civil action refers to that situation
wherein another action is pending between the same parties for the same cause of
action 9and that the second action becomes unnecessary and vexatious. Therefore,
for litis pendentia to be invoked the concurrence of the following requisites is
necessary: (a) identity of parties or at least such as represent the same interest in both
actions; (b) identity of rights asserted and reliefs prayed for, the reliefs being founded
on the same facts; and, (c) the identity in the two (2) cases should be such that the
judgment that may be rendered in one would, regardless of which party is successful,
amount to res judicata in the other. 10 Applying the foregoing criteria in the instant
case, we agree with the Court of Appeals that litis pendentia does not obtain in this
case because of the absence of the second and third requisites.
The fact that herein petitioner instituted a prior action for the annulment of the
mortgage contract, certificate of sale, deed of absolute sale, reconveyance and
damages, is not a valid reason for defeating the action for ejectment. While there may
be identity of parties and subject matter in the two (2) actions, the issues involved and
the reliefs prayed for are not the same. In the annulment and reconveyance suit, the
issue is the validity of the mortgage and the subsequent foreclosure sale, whereas the
issue in the ejectment case is whether, assuming the mortgage and foreclosure sale
to be valid, private respondent has the right to take possession of the property. In the
former case, the relief prayed for is recovery of ownership of the subject land, while
the latter, it is the restoration of possession thereof to private respondent. Hence, the
Metropolitan Trial Court can validly try the ejectment case even while the annulment
suit is being litigated in the Regional Trial Court. 11
Consequently, there being different causes of action in the RTC and MeTC cases, a
decision in one case will not constitute res judicata as to the other. Concededly, a
decision in one case may, to a certain extent, affect the other case since they involve
the same parcel of land. But the test to determine identity of causes of action is to
ascertain whether the same evidence which is necessary to sustain the second cause
of action is sufficient to authorize a recovery in the first. 12 It is true that some items
or pieces of evidence may be admissible in both actions, as for instance, the Deed of
Absolute Sale executed by and between the bank and herein respondent Baron. It
cannot be said, however, that exactly the same set of evidence presented to sustain
the first action for annulment, reconveyance and damages, can likewise defeat the
second action for ejectment. 13
Moreover, well-settled is the rule that the pendency of an action for annulment of sale
and reconveyance may not be successfully pleaded in abatement of an action for
unlawful detainer or forcible entry. The judgment rendered in an action for forcible
entry or detainer shall be effective with respect to the possession only and in no case
bind the title or affect the ownership of the land or building. Such judgment shall not
bar an action between the same parties respecting title to the land or building nor shall
it be held conclusive of the facts therein found in a case between the same parties
upon the different cause of action involving possession. 14 This rule is not without
good reason. If the rule were otherwise, ejectment cases could easily be frustrated by
the defendant through the simple expedient of filing an action in the RTC contesting
the plaintiff's ownership over the property from which the defendant is sought to be
evicted. This would render nugatory the underlying philosophy of the summary
remedy of ejectment which is to prevent criminal disorder and breaches of the peace
and to discourage those who, believing themselves entitled to the possession of the
property, resort to force rather than to some appropriate action in court to assert their
claims. 15
On the alleged insufficiency of the complaint for ejectment, this Court has repeatedly
emphasized that in determining the sufficiency of the facts alleged in the complaint,
the test is whether admitting the facts alleged, the court can render a valid judgment
upon the same in accordance with the prayer of the plaintiff. 16 The subject complaint
for ejectment stated, among others, that (a) the plaintiff bought the premises occupied
by the defendants as shown by the deed of absolute sale (Annex "A"); and, (b)
defendant Elisa C. Feliciano was requested to vacate the premises for lack of lawful
possession and non-payment of rentals (Annex "B") but her lawyer informed the
plaintiff that she was the owner of the premises. 17 Clearly, these allegations
adequately established a cause of action for unlawful detainer on the basis of which
the MeTC could render a valid judgment in accordance with the prayer of the plaintiff.
As succinctly observed by the Court of Appeals—
As can be gleaned from the complaint itself, it was alleged that
defendant Elisa Feliciano was requested to vacate the premises for
lack of lawful possession and non-payment of rentals (Annex "A" of
complaint, Rollo, p. 8) considering that said premises has been sold to
herein petitioner by Philippine Commercial International Bank.
Notwithstanding such allegations, the Regional Trial Court failed to
consider the complaint sufficient to constitute a case for unlawful
detainer. It is equally settled that in an action for unlawful detainer, an
allegation that the defendant is unlawfully withholding possession
from the plaintiff is deemed sufficient and a complaint for unlawful
detainer is sufficient if it alleges that the withholding of possession or
the refusal to vacate is unlawful without necessarily employing the
terminology of the law (Sumulong v. Court of Appeals, 232 SCRA 372).
Finally, we are not unmindful of the afflictive consequences that will be suffered by
petitioner if her ejectment is ordered by the MeTC, only to be reinstated later if she
eventually wins the nullification of the mortgage case in the RTC. However,
respondent will also suffer an injustice if denied of the remedy of ejectment, resort to
which is not only allowed but in fact encouraged by law. Further, the tide of
jurisprudence — which declared in no uncertain terms that an action for annulment of
sale and reconveyance may proceed independently of an action for unlawful detainer
or forcible entry involving the same parties and the same parcel of land — is clearly
on the side of respondent herein.
More importantly, petitioner is not being ejected yet. The Court of Appeals, and now
this Court, is simply ordering the MeTC to reinstate the ejectment case and proceed
with it. Private respondent Baron has not prevailed yet as he must still prove his right
to the possession of the litigated property. By the same token, all is not lost for
petitioner as she still has equal chances of winning in both the ejectment and
annulment cases. At any rate, questions concerning the propriety of petitioner's
ejectment are premature. We refrain from expressing any opinion on the merits of the
ejectment case as the same will have to be threshed out in the proper forum after a
full consideration of the evidence that will be presented by the parties and the law
upon which it may be based. Our decision herein is limited to the reinstitution of the
ejectment case which has been improvidently dismissed by the trial court on a flawed
basis.
WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals of 9
October 1995 and its Resolution of 12 December 1995 are AFFIRMED, and the case is
REMANDED to the court of origin for further proceedings and proper disposition in
light of our pronouncement herein. Costs against petitioner.

SO ORDERED.
G.R. No. 155622 October 26, 2009
DOTMATRIX TRADING as represented by its proprietors, namely ROMY YAP CHUA,
RENATO ROLLAN and ROLANDO D. CADIZ, Petitioner,
vs.
ROMMEL B. LEGASPI under the name and style of BIG J FARMS and RBL
FARM, Respondent.
DECISION
BRION, J.:
On a pure question of law involving the issue of litis pendentia, Dotmatrix Trading –
represented by its proprietors, Romy Yap Chua, Renato Rollan and Rolando D. Cadiz
(petitioners) – came directly to this Court via a petition for review on certiorari1 to challenge
the Orders2 dated September 2, 2002 and October 4, 2002 of the Regional Trial Court
(RTC)3 in the case in caption.
FACTUAL BACKGROUND
The facts of the case, as gathered from the parties’ pleadings, are briefly summarized below:
The petitioners are engaged in the business of buying and selling of commodities, including
day-old chicks. Rommel B. Legaspi (respondent), as the proprietor of Big J Farms and RBL
Farm, was the petitioners’ supplier of day-old chicks from September to December 2001.
Sometime in May 2002, the respondent sent a demand letter to the petitioners for the
payment of delivered day-old chicks. The petitioners, thru petitioner Cadiz, replied that they
have paid ₱1,360,000.00, but the respondent was able to deliver only ₱1,136,150.00 worth
of day-old chicks, leaving a deficiency of ₱223,850.00 worth of day-old chicks. The
petitioners demanded the delivery of the deficiency, or the return of the overpayment made.
When the parties refused to comply with each other’s demands, both went to court for judicial
relief.
On June 11, 2002, the petitioners (the buyers of the chicks) filed before RTC-Tarlac a
complaint for sum of money and damages against the respondent, docketed as Civil Case
No. 9354. The petitioners sought the return of the overpayment made, plus moral and
exemplary damages, and attorney’s fees.
On June 19, 2002, the respondent (the seller of the chicks) filed before RTC-Malolos,
Bulacan a complaint for sum of money and damages against the petitioners, docketed as
Civil Case No. 489-M-2002. The respondent alleged that he delivered ₱1,368,100.00 worth
of day-old chicks, but the petitioners only paid ₱1,150,000.00. Thus, the respondent prayed
for the payment of the balance of ₱218,100.00.
Shortly upon receipt of the summons and complaint in Civil Case No. 9354, or on August 21,
2002, the respondent filed a motion to dismiss Civil Case No. 9354 before RTC-Tarlac. He
argued that Civil Case No. 9354 should be dismissed on the ground of litis pendentia because
it is merely anticipatory and defensive of the respondent’s claim for collection in Civil Case
No. 489-M-2002 before RTC-Malolos.
THE RTC RULING
On September 2, 2002, RTC-Tarlac issued an Order4 in Civil Case No. 9354 granting the
respondent’s motion and dismissing the complaint on the ground of litis pendentia. It noted
that the petitioners filed Civil Case No. 9354 to preempt the respondent’s collection case in
Civil Case No. 489-M-2002 before RTC-Malolos. It found that the petitioners filed Civil Case
No. 9354 only after they received a demand letter from the respondent.
The petitioners moved but failed to secure a reconsideration of the RTC order 5 and, from
thence, came to us through the present petition on a pure question of law.
THE PETITION and
THE PARTIES' SUBMISSIONS
The petitioners argue that Civil Case No. 9354 should not have been dismissed on the ground
of litis pendentia because it was filed ahead of Civil Case No. 489-M-2002. They insist that
Civil Case No. 9354 was filed to vindicate the wrong done to them by the respondent, and
not to simply preempt the latter’s case for collection of sum of money. They stress that it is
their right to seek the assistance of the court to rectify the damage they sustained.
The respondent, on the other hand, submits that the issue raised by the petitioners is far from
novel; the consistent judicial holding is that litis pendentia does not specifically require that
the action that should yield to the other should be the prior pending action.
THE ISSUE
The core issue is whether Civil Case No. 9354 (the buyers’ action for overpayment) – filed
ahead of Civil Case No. 489-M-2002 (the seller’s action for collection of balance) – should
be dismissed on the ground of litis pendentia.
OUR RULING
We see no merit in the petition.
The elements of Litis
Pendentia are present.
Litis pendentia is a Latin term, which literally means "a pending suit" and is variously referred
to in some decisions as lis pendens and auter action pendant.6 As a ground for the dismissal
of a civil action, it refers to the situation where two actions are pending between the same
parties for the same cause of action, so that one of them becomes unnecessary and
vexatious.7 It is based on the policy against multiplicity of suits.8
To constitute litis pendentia, not only must the parties in the two actions be the same; there
must as well be substantial identity in the causes of action and in the reliefs sought. Further,
the identity should be such that any judgment that may be rendered in one case, regardless
of which party is successful, would amount to res judicata in the other.9
From every conceivable angle, no dispute exists that all the requisites of litis pendentia are
present in this case. The parties in Civil Case No. 9354 and Civil Case No. 489-M-2002 are
the same. They are suing each other for sums of money which arose from their supply
contract of day-old chicks. The reliefs prayed for are based on the same facts and identity
exists on the rights asserted. Any judgment rendered in one case would necessarily amount
to res judicata in the other.
Guidelines for the dismissal of a complaint on the ground of litis pendentia
We take this opportunity to revisit the cases we have decided on the issue of litis pendentia
and the factors we considered in determining which case should prevail and which must yield
to the other.
The rule on litis pendentia does not require that the case later in time should yield to the
earlier case; what is required merely is that there be another pending action, not
a prior pending action.10 Neither is it required that the party be served with summons
before lis pendens can apply; it is the filing of the action, not the receipt of summons, which
determines priority in date.11
Early on, we applied the principle of Qui prior est tempore, potior est jure 12 (literally, he who
is before in time is better in right) in dismissing a case on the ground of litis pendentia. This
was exemplified in the relatively early case of Del Rosario v. Jacinto13 where two complaints
for reconveyance and/or recovery of the same parcel of land were filed by substantially the
same parties, with the second case only impleading more party-plaintiffs. The Court held that
"parties who base their contention upon the same rights as the litigants in a previous suit are
bound by the judgment in the latter case." Without expressly saying so in litis pendentia
terms, the Court gave priority to the suit filed earlier.
In Pampanga Bus Company, Inc. v. Ocfemia,14 complaints for damages arising from a
collision of a cargo truck and a bus were separately filed by the owners of the colliding
vehicles. The complaint of the owners of the cargo truck prevailed and the complaint of the
owners of the bus had to yield, as the cargo truck owners first filed their complaint. Notably,
the first and prevailing case was far advanced in development, with an answer with
counterclaim and an answer to the counterclaim having been already filed, thus fully joining
the issues.
In Lamis Ents. v. Lagamon,15 the first case was a complaint for specific performance of
obligations under a Memorandum of Agreement, while the second case was a complaint for
sums of money arising from obligations under a promissory note and a chattel mortgage, and
damages. We dismissed the second case because the claims for sums of money therein
arose from the Memorandum of Agreement sued upon in the first case.
Ago Timber Corporation v. Ruiz16 offered an insightful reason after both parties had each
pleaded the pendency of another action between the same parties for the same cause. The
Court ruled that the second action should be dismissed, "not only as a matter of comity with
a coordinate and co-equal court (Laureta & Nolledo, Commentaries & Jurisprudence on
Injunction, p. 79, citing Harrison v. Littlefield, 57 Tex. Div. A. 617, 619, 124 SW 212), but also
to prevent confusion that might seriously hinder the administration of justice. (Cabigao, et al.
v. Del Rosario, et al., 44 Phil. 182)."
In all these cases, we gave preference to the first action filed to be retained. The "priority-in-
time rule," however, is not absolute.
In the 1956 case of Teodoro v. Mirasol,17 we deviated from the "priority-in-time rule" and
applied the "more appropriate action test" and the "anticipatory test."
The "more appropriate action test" considers the real issue raised by the pleadings and the
ultimate objective of the parties; the more appropriate action is the one where the real issues
raised can be fully and completely settled. In Teodoro, the lessee filed an action for
declaratory relief to fix the period of the lease, but the lessor moved for its dismissal because
he had subsequently filed an action for ejectment against the lessee. We noted that the
unlawful detainer suit was the more appropriate action to resolve the real issue between the
parties – whether or not the lessee should be allowed to continue occupying the land under
the terms of the lease contract; this was the subject matter of the second suit for unlawful
detainer, and was also the main or principal purpose of the first suit for declaratory relief.
In the "anticipatory test," the bona fides or good faith of the parties is the critical element. If
the first suit is filed merely to preempt the later action or to anticipate its filing and lay the
basis for its dismissal, then the first suit should be dismissed. In Teodoro, we noted that the
first action, declaratory relief, was filed by the lessee to anticipate the filing of the second
action, unlawful detainer, considering the lessor’s letter informing the lessee that the lease
contract had expired.
We also applied the "more appropriate action test" in Ramos v. Peralta.18 In this case, the lessee
filed an action for consignation of lease rentals against the new owner of the property, but the new
owner moved to dismiss the consignation case because of the quieting of title case he had also
filed against the lessee. Finding that the real issue between the parties involved the right to
occupy/possess the subject property, we ordered the dismissal of the consignation case, noting
that the quieting of title case is the more appropriate vehicle for the ventilation of the issues
between them; the consignation case raised the issue of the right to possession of the lessee
under the lease contract, an issue that was effectively covered by the quieting of title case which
raised the issue of the validity and effectivity of the same lease contract.
In University Physician Services, Inc. v. Court of Appeals,19 we applied both the "more appropriate
action test" and "anticipatory test." In this case, the new owner of an apartment sent a demand
letter to the lessee to vacate the leased apartment unit. When the lessee filed an action for
damages and injunction against the new owner, the new owner moved for the dismissal of the
action for damages on account of the action for ejectment it had also filed. We noted that ejectment
suit is the more appropriate action to resolve the issue of whether the lessee had the right to
occupy the apartment unit, where the question of possession is likewise the primary issue for
resolution. We also noted that the lessee, after her unjustified refusal to vacate the premises, was
aware that an ejectment case against her was forthcoming; the lessee’s filing of the complaint for
damages and injunction was but a canny and preemptive maneuver intended to block the new
owner’s action for ejectment.
We also applied the "more appropriate action test" in the 2003 case Panganiban v. Pilipinas Shell
Petroleum Corp.,20 where the lessee filed a petition for declaratory relief on the issue of renewal
of the lease of a gasoline service station, while the lessor filed an unlawful detainer case against
the lessee. On the question of which action should be dismissed, we noted that the interpretation
of a provision in the lease contract as to when the lease would expire is the key issue that would
determine the lessee's right to possess the gasoline service station. The primary issue – the
physical possession of the gasoline station – is best settled in the ejectment suit that directly
confronted the physical possession issue, and not in any other case such as an action for
declaratory relief.21
A more recent case – Abines v. Bank of the Philippine Islands22 in 2006 – saw the application of
both the "priority-in-time rule" and the "more appropriate action test." In this case, the respondent
filed a complaint for collection of sum of money against the petitioners to enforce its rights under
the promissory notes and real estate mortgages, while the petitioners subsequently filed a
complaint for reformation of the promissory notes and real estate mortgages. We held that the
first case, the collection case, should subsist because it is the first action filed and the more
appropriate vehicle for litigating all the issues in the controversy. We noted that in the second
case, the reformation case, the petitioners acknowledged their indebtedness to the respondent;
they merely contested the amounts of the principal, interest and the remaining balance. We
observed, too, that the petitioners’ claims in the reformation case were in the nature of defenses
to the collection case and should be asserted in this latter case.
Under this established jurisprudence on litis pendentia, the following considerations predominate
in the ascending order of importance in determining which action should prevail: (1) the date of
filing, with preference generally given to the first action filed to be retained; (2) whether the action
sought to be dismissed was filed merely to preempt the later action or to anticipate its filing and
lay the basis for its dismissal; and (3) whether the action is the appropriate vehicle for litigating
the issues between the parties.23
Civil Case No. 489-M-2002 is the appropriate case to determine the rights of the parties
In the present case, the undisputed facts show that the respondent initiated the preparatory moves
that led to the present litigation when he sent the petitioners – in May 2002, or about five (5)
months after the end of their supply contract – a demand letter for the payment of delivered day-
old chicks. The petitioners only reacted to this demand when they replied that there was in fact
an overpayment that should be refunded. Under these facts, and given the law on sales that
business is keenly aware of, we can safely conclude that the petitioners knew that a case for sum
of money would be filed against them and thus filed Civil Case No. 9354 in anticipation of this
coming case which became Civil Case No. 489-M-2002; the purpose, under this view, is purely
preemptive, i.e., to seek the dismissal of the coming action.
The more compelling reason that strikes us, however, is that Civil Case No. 489-M-2002 is the
more appropriate action to rule on the real issue between the parties – whether or not the correct
payment had been made on the delivered day-old chicks; the petitioners’ claim of overpayment in
Civil Case No. 9354 is more in the nature of a defense to the respondent’s action for collection in
Civil Case No. 489-M-2002. From this perspective, the real issue is better asserted in Civil Case
No. 489-M-2002 – the collection case – rather than in the action that merely serves as a defense
to the collection case.1avvphi1
Another and equally compelling reason why Civil Case No. 489-M-2002 should prevail is the
reason we put forward in Pampanga Bus Company, Inc. v. Ocfemia24 – the stage of this case at
this point. With the seven-year pendency of the present case (since the filing of Civil Case No.
9354 on June 11, 2002) and with no restraining order from this Court, there is no doubt that trial
on the merits has already been conducted in Civil Case No. 489-M-2002, with the petitioners given
the full opportunity to present evidence on their defense. To dismiss Civil Case No. 489-M-2002
at this point would result in needless delay in the resolution of the parties’ dispute and bring them
back to square one. This consequence will defeat the public policy reasons behind litis pendentia
which, like the rule on forum shopping, aims to prevent the unnecessary burdening of our courts
and undue taxing of the manpower and financial resources of the judiciary; to avoid the situation
where co-equal courts issue conflicting decisions over the same cause; and to preclude one party
from harassing the other party through the filing of an unnecessary or vexatious suit.25
WHEREFORE, premises considered, we hereby DENY the petition for its failure to show any
reversible error in the assailed Orders dated September 2, 2002 and October 4, 2002 of the
Regional Trial Court, Branch 63, Tarlac, Tarlac in Civil Case No. 9354.
SO ORDERED.
G.R. No. 106818 May 27, 1994
PATROCINIO YU, petitioner,
vs.
HON. COURT OF APPEALS and TRADERS ROYAL BANK, respondents.
Palma, Palma & Associates for petitioner.
Hermosisima, Sison & Inso for private respondent.
VITUG, J.:
The issue in the instant petition for review on certiorari is whether or not the Court of Appeals
has correctly affirmed the lower court's order dismissing Civil Case No. CEB-7483 on
grounds of litis pendentia, prescription, estoppel and laches.
Petitioner Patrocinio Yu owned a drugstore, called Diding's Pharmacy, in Manalili Street,
Cebu City. In furtherance of the business, Yu obtained from the Traders Royal Bank ("TRB")
several loans secured by promissory notes, a chattel mortgage, letters of credit and trust
receipts.
Yu's loans in time became due and demandable but, despite TRB's repeated demands, Yu
failed to effect payment. Finally, on 31 January 1984, TRB filed a complaint against Yu with
the Regional Trial Court of Cebu (Civil Case No. CEB-1765) for recovery of personal
property, with an alternative prayer for payment of the due obligation. TRB based its
complaint on the promissory notes and the chattel mortgage; no mention, however, was
made of the trust receipts, although in the statement of account, 1 attached to the complaint,
reference was made to unsettled obligations under two trust receipts (DTR 580-80 and DTR
588-80).
During the pendency of the case, TRB sought possession of the mortgaged chattels (drugs
and medicine) for the purpose of effecting an extrajudicial foreclosure thereof. It obtained
from the court a writ of replevin on 31 May 1985 upon its filing of a P10,000 bond. In view,
however, of the protracted proceedings on the petition for the issuance of the writ, most of
the drugs and medicine expired and apparently became valueless. TRB thus relented from
further pursuing the replevin and concentrated, instead, on its alternate prayer for a sum of
money. 2
On 16 June 1987, TRB instituted before the Office of the City Fiscal of Cebu City a criminal
complaint (I.S. No. 87-2502) against Yu and his wife for two counts of violation of the Trust
Receipts Law (P.D. No. 115). The inquest fiscal was unmoved by Yu's defense that the trust
receipts were null and void for being fictitious and simulated. The fiscal found a prima
facie case against Yu, although his wife was exonerated from any charge. A reinvestigation
was later conducted on the case upon order of the city fiscal. The previous finding, upon
reinvestigation, was reiterated by the assistant city fiscal. The latter opined that the points
raised by Yu in his motion for reinvestigation were "matters of defense" which he could well
ventilate during the court trial. 3 Dissatisfied, Yu elevated the matter to the Department of
Justice for review but the appeal, on
1 December 1988, was rejected for lack of merit and, additionally, because the appeal was
filed beyond the reglementary period therefor. 4
Two days after the filing of the criminal case, or on 18 June 1987, TRB instituted before the
same court CEB-6035 against Yu for the recovery of sums of money. Its complaint, 5 this
time, specifically mentioned the trust receipts in question. Yu moved to dismiss the complaint
on the ground of litis pendentia, alleging that the complaint was identical with Civil Case No.
CEB-1765. 6
Yu called attention to the fact that the two cases involved the same promissory notes and
letters of credit, including "LC 587/80 (DTR 588/80)" and
"LC 590/80 (DTR 590/80)." The lower court, 7 on 10 September 1987, dismissed Civil Case
No. CEB-6035. 8
On 28 December 1988, Yu filed Civil Case No. CEB- 7483 9 with the Regional Trial Court of
Cebu City against TRB for the declaration of nullity of the two trust receipts, claiming that
TRB made him sign the documents, apparently referring to the trust receipts, "which he did
not fully understand." TRB filed a motion to dismiss the case on various grounds, i.e., the
pendency of Civil Case No. CEB-1765, prescription, laches and estoppel. It alleged that Yu's
complaint was aimed merely to delay the prosecution of the criminal case for violation of the
Trust Receipts Law. On 22 March 1989, the lower court 10 granted the motion and dismissed
Civil Case No. CEB-7483.
On appeal, the Court of Appeals 11 affirmed in toto the 22 March 1989 Order of the lower
court. Hence, the instant petition for review on certiorari.
For litis pendentia to be a ground for the dismissal of an action, the following requisites must
concur: (a) identity of parties; (b) identity of rights asserted and relief prayed for, the relief
being founded on the same facts; and
(c) the identity in the two cases should be such that the judgment that may be rendered in
one would, regardless of which party is successful, amount to res adjudicata to the
other. 12 In Hongkong & Shanghai Bank vs. Aldecoa & Co., 30 Phil. 255, 274-275, this Court
elaborated, thus:
The principle upon which a plea of another action pending is sustained is
that the latter action is deemed unnecessary and vexatious. (Williams vs.
Gaston, 148 Ala., 214; 42 Sou., 552; 1 Cyc. 21; 1 R.C.L., sec. 1.) A
statement of the rule to which the facts of the plea must conform in order to
entitle the litigant to its benefits, and which has often met with approval, is
found in Watson vs. Jones (13 Wall., 679, 715; 20 L. ed., 666):
But when the pendency of such a suit is set up to defeat another, the case
must be the same. There must be the same parties, or at least such as
represent the same interest, there must be the same rights asserted, and
the same relief prayed for. This relief must be founded on the same facts,
and the title or essential basis of the relief sought must be the same. The
identity in these particulars should be such that if the pending case had
already been disposed of, it could be pleaded in bar as a former adjudication
of the same matter between the same parties.
It will be noted that the cases must be identical in a number of ways. It will
be conceded that in so far as the plea is concerned, the parties are the same
in the case at bar as they were in the action to have the mortgages annulled.
Their position is simply reversed, the defendants there being the plaintiffs
here, and vice versa. This fact does not affect the application of the rule. The
inquiry must therefore proceed to the other requisites demanded by the rule.
Are the same rights asserted? Is the same relief prayed for?
The test of identity in these respects is thus stated in 1 Cyc., 28:
A plea of the pendency of a prior action is not available unless the prior
action is of such a character that, had a judgment been rendered therein on
the merits, such a judgment would be conclusive between the parties and
could be pleaded in bar of the second action.
This test has been approved, citing the quotation, in Williams vs. Gaston
(148 Ala., 214; 42 Sou., 552); Van Vleck vs. Anderson (136 Iowa, 366; 133
N.W., 853); Wetzstein vs. Mining Co. (28 Mont., 451; 72 P., 865). It seems
to us that unless the pending action, which the appellants refer to, can be
shown to approach the action at bar to this extent, the plea ought to fail.
The former suit is one to annul the mortgages. The present suit is one for
the foreclosure of the mortgages. It may be conceded that if the final
judgment in the former action is that the mortgages be annulled, such an
adjudication will deny the right of the bank to foreclose the mortgages. But
will a decree holding them valid prevent the bank from foreclosing them?
Most certainly not. In such an event, the judgment would not be a bar to the
prosecution of the present action. The rule is not predicated upon such a
contingency. It is applicable, between the same parties, only when the
judgment to be rendered in the action first instituted will be such that,
regardless of which party is successful, it will amount to res adjudicata
against the second action." (Italics supplied.)
In the case at bench, there is, except for the identity of parties, a substantial disparity between
CEB-1765 and CEB-7483. In the former, TRB seeks the recovery of a sum of money from Yu on
account of his unpaid loan obligations. In its complaint, TRB has not even alleged specifically the
existence of the trust receipts, although, of course, it would appear that such trust receipts have
been among the documents executed in order to secure the outstanding loans of Yu. In CEB-
7483, Yu impugns the validity of the trust receipts which he claims to be null and void. It is clear
that a judgment in either of the two cases will not necessarily foreclose the other on the mere
basis of res adjudicata.
We agree, nonetheless, with both the court a quo and the appellate court in holding that the action
in CEB-7483 has prescribed. Both courts have ratiocinated that Yu's cause of action in reality
rests on fraud, an action which prescribes in four (4) years. Said courts did have good reasons,
in our considered view, to thus conclude for, while Yu has ostensibly sought a declaration of nullity
of the trust receipts, for being "simulated and fictitious," the complaint is bereft, however, of
substantial factual allegations in support of this conclusion. Upon the other hand, clearly indicative
of a case for annulment, rather than one of nullity, of the trust receipts is Yu's averment that he
merely has been made to sign certain documents (the trust receipts) which "he did not fully
understand." Even assuming that such a statement did not necessarily convey a case of fraud, it
has, nevertheless, adequately impressed a situation, at least, of mistake or ignorance in the
execution of the trust receipts. Whether the basis of Yu's cause of action is one of fraud or of
mistake, the four-year prescriptive period for filing the case for annulment of the trust receipts
would, in any case, govern (Art. 1391, in relation to Art. 1390, Civil Code).
The trust receipts were executed in 1980. A demand letter to make good Yu's obligation to the
bank was made on 15 November 1982. The complaint of TRB was filed on 31 January 1984, and
Yu received summons to answer
CEB-1765 in February 1984. Reckoned from whichever date mentioned above, the filing of CEB-
7483 on 18 December 1988 was way beyond the four-year statute of limitation prescribed in
Article 1391 13 of the Civil Code. This is not to say, however, that petitioner would thereby be
precluded from raising the invalidity of the trust receipts in the criminal charge for a violation of
the Trust Receipts Law, a matter that is alien to the instant proceedings.
Having thus ruled, we find it inconsequential to still pass upon the other issues raised by the
parties.
We cannot, however, end this ponencia without a word on the manner counsel for both parties
have poorly regarded each other in their respective pleadings. 14 The use of intemperate language
and unkind ascriptions, certainly less than civil, have contributed to the prolixity of argument in an
otherwise simple case. While we do not consider the acts of both counsel grave enough to subject
them to this Court's powers of contempt and discipline, we remind both counsel that Canon 8 of
the Code of Professional Responsibility enjoins every lawyer to "conduct himself with courtesy,
fairness and candor toward his professional colleagues, and shall avoid harassing tactics against
opposing counsel."
WHEREFORE, the decision of the Court of Appeals is hereby AFFIRMED, without special
pronouncement on costs. SO ORDERED.
G.R. No. 143188 February 14, 2007
FLORENTINO PINEDA, Petitioner,
vs.
HEIRS OF ELISEO GUEVARA, represented by ERNESTO E. GUEVARA and ISAGANI
S. GUEVARA, namely: ELISEO GUEVARA, JR., ZENAIDA G. SAPALICIO, DANTE G.
GUEVARA, DANILO C. GUEVARA, and ISAGANI S. GUEVARA, Respondents.
DECISION
TINGA, J.:
On appeal by way of certiorari under Rule 45 of the 1997 Rules of Civil Procedure are the
Decision1 and Resolution of the Court of Appeals in CA-G.R. CV No. 54074. The Decision
reversed the order of dismissal of the Regional Trial Court (RTC), Branch 273, Marikina, and
directed the court a quo to conduct trial on the merits, while the Resolution denied petitioner
Pineda’s motion for reconsideration.
As borne out by the records, the following are the factual antecedents.
On 7 September 1995, respondents Eliseo Guevara, Jr., Zenaida G. Sapalicio, Dante G.
Guevara and Isagani S. Guevara, collectively referred hereinafter as the Guevara heirs, filed
an action for the nullification of the certificates of title of a parcel of land measuring
approximately 2,304 hectares situated in Marikina.
Named defendants were the estate of the late Pedro Gonzales, Virginia Perez, Crisanta
Perez, Jose Perez, Roy Guadalupe, Lino Bucad and Florentino Pineda. The complaint,
docketed as Civil Case No. 95-171-MK, was raffled to Branch 273 of the RTC of Marikina.
The Guevara heirs alleged in the complaint that they were the co-owners of a property
originally covered by Original Certificate of Title (OCT) No. 386 issued on 7 December 1910
in favor of the spouses Emiliano Guevara and Matilde Crimen. The couple’s son, and the
Guevara heirs’ predecessor-in-interest, Eliseo Guevara, allegedly purchased the property on
1 January 1932 and had exercised ownership over the property since then by selling and
donating portions thereof to third persons. The Guevara heirs averred that the sale of the
property to Eliseo Guevara was annotated at the back of OCT No. 386.
According to the Guevara heirs, the defendants illegally claimed ownership and possession
over a certain portion of the property, particularly that area covered by Transfer Certificate of
Title (TCT) No. 223361 issued to the estate of Pedro C. Gonzales. TCT No. 223361 was
derived from OCT No. 629, which the Guevara heirs described as fake, having been issued
only on 26 January 1912 or subsequent to the issuance of OCT No. 386. Hence, the Guevara
heirs prayed that OCT No. 629 and its derivative titles, to wit, TCT Nos. 223361, 244447,
244448, 244449 be cancelled, that the Guevara heirs be declared owners of the property
and that a new certificate of title be issued in their names.
Defendant Pineda filed an answer with counterclaim, raising the defenses of lack of cause of
action, prescription, laches and estoppel. He averred that he was a buyer in good faith and
had been in actual possession of the land since 1970 initially as a lessor and subsequently
as an owner. He registered the property in his name and was issued TCT No. 257272.
Defendants Virginia, Crisanta, and Jose, all surnamed Perez, filed an answer with
compulsory counterclaim and averred that their father, Marcos Perez, purchased the property
from the late Pedro Gonzales and had it declared in Perez’s name for taxation purposes.
According to them, they had been in actual possession of a lot measuring 375 square meters
before 1958 and had been regularly paying the property taxes thereon.
The rest of the defendants, including the estate of Pedro Gonzales, also filed an answer with
counterclaim, raising the same defenses of laches and prescription and res judicata. They
claimed that OCT No. 629 was issued to the Municipality of Marikina in 1912 and that the
late Pedro Gonzales and his family started occupying the property as early as 1950 as
lessees thereon. The late Pedro Gonzales allegedly bought the property from the Municipality
of Marikina in a public bidding on 25 April 1966 and had allowed defendants to occupy the
property. They asserted that the Guevara heirs never actually occupied the property.
On 4 December 1995, the RTC set the case for hearing as if a motion to dismiss had been
filed. During the hearing, the parties presented oral arguments and were directed to file their
memoranda.
After submission of memoranda, the RTC issued an Order dated 7 May 1996, dismissing the
action on the ground of laches. The Guevara heirs appealed the order of dismissal, claiming
the denial of their right to due process.
On 23 August 1999, the Court of Appeals promulgated the assailed Decision, which set aside
the RTC’s order of dismissal and directed the reinstatement of Civil Case No. 95-171-MK.
The appellate court ruled that a complaint cannot be dismissed under Rule
16, Section 12 of the Rules of Court based on laches since laches is not one of the grounds
enumerated under said provision. Although the RTC order of dismissal did not rule on the
other affirmative defenses raised by petitioners in the answer, such as lack of cause of action,
prescription and res judicata, the Court of Appeals discussed them and ruled that none of
these affirmative defenses raised were present to warrant the dismissal of the action.
Only Pineda sought reconsideration. In its 3 May 2000 Resolution, the Court of Appeals
denied Pineda’s motion. Hence, the instant petition, attributing the following errors to the
Court of Appeals:
THE COURT OF APPEALS ERRED IN TAKING COGNIZANCE OF THE APPEAL OF
RESPONDENTS WHICH RAISED ONLY PURELY QUESTIONS OF LAW; AND,
THEREFORE, IT ACTED WITHOUT JURISDICTION IN HEARING AND DECIDING THE
SAID APPEALED CASE.
THE COURT OF APPEALS ERRED IN NOT CONSIDERING THE AFFIRMATIVE
DEFENSE OF LACHES AS ANALOGOUS TO PRESCRIPTION.
THE COURT OF APPEALS ERRED IN HOLDING THAT THE TRIAL COURT’S DISMISSAL
OF THE RESPONDENTS’ COMPLAINT IS ERRONEOUS FOR THE REASON THAT THE
AFFIRMATIVE DEFENSE OF LACHES IS NOT AMONG THE GROUNDS FOR A MOTION
TO DISMISS UNDER THE RULES, WHICH MAY BE ALLEGED AS AFFIRMATIVE
DEFENSE TO BE PROVED DURING THE TRIAL.
AS A COROLLARY TO THE THIRD ASSIGNED ERROR ABOVE, THE COURT OF
APPEALS ERRED IN NOT TREATING THE ASSAILED ORDER OF DISMISSAL OF
RESPONDENTS’ COMPLAINT BY THE TRIAL COURT AS A SUMMARY JUDGMENT, TO
AVOID PROTRACTED LITIGATION.
THE COURT OF APPEALS ERRED IN NOT HOLDING THAT WHILE PRESCRIPTION IN
DEROGATION OF THE TITLE TO REGISTERED OWNERS WILL NOT LIE, LACHES
WILL.3
Counsel for the estate of Pedro Gonzales filed a Comment/Manifestation, 4 stating that her
clients have adopted and joined Pineda’s petition praying for the reinstatement of the trial
court’s order of dismissal.
At bottom, the petition raises two main issues, to wit: (1) whether or not the appeal of the
heirs of Guevara was improperly elevated to the Court of Appeals since, according to them,
it raised a pure question of law; and (2) whether or not the trial court correctly dismissed the
action on the ground of laches without conducting trial on the merits.
Petitioner Pineda had ample opportunity to raise before the Court of Appeals the objection
on the improper mode of appeal taken by the heirs of Guevara. This, he failed to do. The
issue of improper appeal was raised only in Pineda’s motion for reconsideration of the Court
of Appeals’ Decision. Hence, this Court cannot now, for the first time on appeal, pass upon
this issue. For an issue cannot be raised for the first time on appeal.5 In any case, the appeal
by the heirs of Guevara also raised the issue regarding the existence of laches on the part
of petitioners as defendants, which is factual in nature as discussed below.
Now, did the trial court correctly order the dismissal of the complaint based on laches without
conducting trial on the merits? The Court of Appeals disagreed, holding that under Rule 16,
Section 16 of the Rules of Court, laches is not enumerated under said provision, hence, it
must be proved during trial. On the other hand, petitioner Pineda asserts that laches is
analogous to prescription and, therefore, can be a ground of dismissing a complaint as
though a motion to dismiss is filed.
Well-settled is the rule that the elements of laches must be proved positively. Laches is
evidentiary in nature which could not be established by mere allegations in the pleadings and
can not be resolved in a motion to dismiss. At this stage therefore, the dismissal of the
complaint on the ground of laches is premature.7 Those issues must be resolved at the trial
of the case on the merits wherein both parties will be given ample opportunity to prove their
respective claims and defenses.8
The elements of laches are: (1) conduct on the part of the defendant, or of one under whom
he claims, giving rise to the situation of which the complaint seeks a remedy; (2) delay in
asserting the complainant’s rights, the complainant having had knowledge or notice of the
defendant’s conduct as having been afforded an opportunity to institute a suit; (3) lack of
knowledge or notice on the part of the defendant that the complainant would assert the right
in which he bases his suit; and (4) injury or prejudice to the defendant in the event relief is
accorded to the complainant, or the suit is not held barred.9
Whether or not the elements of laches are present is a question involving a factual
determination by the trial court. There is no absolute rule as to what constitutes laches or
staleness of demand; each case is to be determined according to its particular
circumstances.10 Laches is not concerned with the mere lapse of time, rather, the party must
have been afforded an opportunity to pursue his claim in order that the delay may sufficiently
constitute laches.11 Without prejudging the instant case, an apparent delay in the
enforcement of one’s claim does not automatically constitute laches. The party charged with
negligence or omission in invoking his right must be afforded the opportunity to raise his
defenses, which can be accommodated only in a contentious proceeding.
In reversing the RTC’s order of dismissal, the Court of Appeals held that "laches could not
be a ground to dismiss the complaint as it is not enumerated under Rule 16, Section 1."12 This
is not entirely correct. Under paragraph (h) thereof, where a claim or demand set forth in the
plaintiff’s pleading has been paid, waived, abandoned, or otherwise extinguished, the same
may be raised in a motion to dismiss. The language of the rule, particularly on the relation of
the words "abandoned" and "otherwise extinguished" to the phrase "claim or demand
deemed set forth in the plaintiff’s pleading" is broad enough to include within its ambit the
defense of bar by laches. However, when a party moves for the dismissal of the complaint
based on laches, the trial court must set a hearing on the motion where the parties shall
submit not only their arguments on the questions of law but also their evidence on the
questions of fact involved.13 Thus, being factual in nature, the elements of laches must be
proved or disproved through the presentation of evidence by the parties. As discussed above,
an apparent delay in the filing of a complaint as shown in a pleading does not automatically
warrant the dismissal of the complaint on the ground of laches.
In the case at bar, while the trial court correctly set the case for hearing as though a motion WHEREFORE, the instant petition for review on certiorari is DENIED and the Decision and
to dismiss had been filed, the records do not reveal that it extended to the parties the Resolution of the Court of Appeals in CA-G.R. CV No. 54074 are AFFIRMED. Let the records
opportunity to present evidence. For instance, counsel for the heirs of Guevara filed and of the case be remanded for further proceedings to the Regional Trial Court of Marikina City,
served written interrogatories14 on one of the defendants but the trial court held in abeyance which is hereby ORDERED to try and decide the case with deliberate speed.
the resolution of the motion to order the defendant to submit answers to the written
interrogatories.15 The trial court likewise denied the Ex Parte Motion To Set Trial filed by the SO ORDERED.
heirs of Guevara.16These were the instances which would have enabled the trial court to
receive evidence on which to anchor its factual findings. Although the trial court heard oral
arguments and required the parties to submit their respective memoranda, the presentation
of evidence on the defenses which are grounds for a motion to dismiss was not held at all.
Otherwise, the oral arguments and memoranda submitted by the parties would have enabled
this Court to review the trial court’s factual finding of laches instead of remanding the case
for trial on the merits. A perusal of the records precludes this Court from making a categorical
declaration on whether the heirs of Guevara were guilty of laches.

Neither does the affirmative defense of prescription alleged in an answer automatically

warrant the dismissal of the complaint under Rule 16. An allegation of prescription can
effectively be used in a motion to dismiss only when the complaint on its face shows that
indeed the action has already prescribed.17 Otherwise, the issue of prescription is one
involving evidentiary matters requiring a full-blown trial on the merits and cannot be
determined in a mere motion to dismiss.18 Pineda’s theory that the defense of laches should
be treated as an affirmative defense of prescription warranting the dismissal of the complaint
is erroneous.1awphi1.net

There is also no basis in procedural law to treat the RTC’s order of dismissal as a summary
judgment. The trial court cannot motu proprio decide that summary judgment on an action is
in order. Under the applicable provisions of Rule 35, the defending party or the claimant, as
the case may be, must invoke the rule on summary judgment by filing a motion.19 The
adverse party must be notified of the motion for summary judgment 20 and furnished with
supporting affidavits, depositions or admissions before hearing is conducted. 21 More
importantly, a summary judgment is permitted only if there is no genuine issue as to any
material fact and a moving party is entitled to a judgment as a matter of law. 22

Based on the parties’ allegations in the complaint and answer, the issues in the case at bar
are far from settled. For instance, both petitioner and respondents claim their ownership
rights over the same property based on two different original certificates of title. Respondents
charge petitioner of illegal occupation while the latter invokes good faith in the acquisition of
the property. Clearly, these are factual matters which can be best ventilated in a full-blown
proceeding before the trial court, especially when what are involved appear to be sizeable
parcels of land covered by two certificates of title.

Except for Pineda, the other defendants did not elevate the Court of Appeals’ Decision to this
Court. With respect to them, the appellate court’s Decision has already become final and
conclusive, notwithstanding their adoption23 of Pineda’s petition.
G.R. No. 182153 April 7, 2014
TUNG HO STEEL ENTERPRISES CORPORATION, Petitioner,
vs.
TING GUAN TRADING CORPORATION, Respondent.
DECISION
BRION, J.:
We resolve the petition for review on,certiorari1
filed by petitioner Tung Ho Steel Enterprises
Corp. (Tung Ho) to challenge the July 5, 2006 decision2 and the March 12, 2008 resolution3 of
the Court of Appeals (CA) in CA-G.R. SP No. 92828.
The Factual Antecedents
Tung Ho is a foreign corporation organized under the laws of Taiwan, Republic of China.4
On
the other hand, respondent Ting Guan Trading Corp. (Ting Guan) is a domestic corporation
organized under the laws of the Philippines.5
On January 9, 2002, Ting Guan obligated itself under a contract of sale to deliver heavy metal
scrap iron and steel to Tung Ho. Subsequently, Tung Ho filed a request for arbitration before
the ICC International Court of Arbitration (ICC) in Singapore after Ting Guan failed to deliver
the full quantity of the promised heavy metal scrap iron and steel.6
The ICC ruled in favor of Tung Ho on June 18, 2004 and ordered Ting Guan to pay Tung Ho
the following: (1) actual damages in the amount of US$ 659,646.15 with interest of 6% per
annum from December 4, 2002 until final payment; (2) cost of arbitration in the amount of US
$ 47,000.00; and (3) legal costs and expenses in the amount of NT $ 761,448.00 and US $
34,552.83.7
On October 24, 2004, Tung Ho filed an action against Ting Guan for the recognition and
enforcement of the arbitral award before the Regional Trial Court (RTC) of Makati, Branch
145. Ting Guan moved to dismiss the case based on Tung Ho’s lack of capacity to sue and
for prematurity. Ting Guan subsequently filed a supplemental motion to dismiss based on
improper venue. Ting Guan argued that the complaint should have been filed in Cebu where
its principal place of business was located.8
The Proceedings before the RTC
The RTC denied Ting Guan’s motion to dismiss in an order dated May 11, 2005. Ting Guan
moved to reconsider the order and raised the RTC’s alleged lack of jurisdiction over its person
as additional ground for the dismissal of the complaint. Ting Guan insisted that Ms. Fe Tejero,
on whom personal service was served, was not its corporate secretary and was not a person
allowed under Section 11, Rule 14 of the Rules of Court to receive a summons. It also
asserted that Tung Ho cannot enforce the award in the Philippines without violating public
policy as Taiwan is not a signatory to the New York Convention.9
The RTC denied the motion in an order dated November 21, 2005 and ruled that Ting Guan
had voluntarily submitted to the court’s jurisdiction when it raised other arguments apart from
lack of jurisdiction in its motion to dismiss.
The Proceedings before the CA
Ting Guan responded to the denials by filing a petition for certiorari before the CA with an
application for the issuance of a temporary restraining order and a writ of preliminary
injunction.10
In its Memorandum, Tung Ho argued that a Rule 65 petition is not the proper remedy to assail
the denial of a motion to dismiss. It pointed out that the proper recourse for Ting Guan was
to file an answer and to subsequently appeal the case. It also posited that beyond the
reglementary period for filing an answer, Ting Guan was barred from raising other grounds
for the dismissal of the case. Tung Ho also claimed that the RTC acquired jurisdiction over
the person of Ting Guan since the return of service of summons expressly stated that Tejero
was a corporate secretary.11
In its decision dated July 5, 2006, the CA dismissed the complaint for lack of jurisdiction over
the person of Ting Guan. The CA held that Tung Ho failed to establish that Tejero was Ting
Guan’s corporate secretary. The CA also ruled that a petition for certiorari is the proper
remedy to assail the denial of a motion to dismiss if the ground raised in the motion is lack of
jurisdiction. Furthermore, any of the grounds for the dismissal of the case can be raised in a
motion to dismiss provided that the grounds were raised before the filing of an answer. The
CA likewise ruled that Tung Ho properly filed the complaint before the RTC-Makati.12
Subsequently, both parties moved to partially reconsider the CA decision. Tung Ho reiterated
that there was proper service of summons. On the other hand, Ting Guan sought to modify
the CA decision with respect to the proper venue of the case. The CA denied Ting Guan’s
motion for partial reconsideration in an order dated December 5, 2006.13
Ting Guan immediately proceeded to file a petition for review on certiorari before this Court
to question the CA’s rulings as discussed below. In the interim (on February 11, 2008), Tung
Ho (whose motion for reconsideration of the CA decision was still pending with that court)
filed a "Motion to Supplement and Resolve Motion for Reconsideration" before the CA. In this
motion, Tung Ho prayed for the issuance of an alias summons if the service of summons had
indeed been defective, but its motion proved unsuccessful.14
It was not until March 12, 2008, after the developments described below, that the CA finally Tung Ho’s Petition before this Court
denied Tung Ho’s partial motion for reconsideration for lack of merit.
(G.R. No. 182153)
Ting Guan’s Petition before this Court
On May 7, 2008, Tung Ho seasonably filed a petition for review on certiorari to seek the
(G.R. No. 176110) reversal of the July 5, 2006 decision and the March 12, 2008 resolution of the CA. This is the
present G.R. No. 182153 now before us.
Ting Guan’s petition before this Court was docketed as G.R. No. 176110. Ting Guan argued
that the dismissal of the case should be based on the following additional grounds: first, the Tung Ho reiterates that the RTC acquired jurisdiction over the person of Ting Guan. It also
complaint was prematurely filed; second, the foreign arbitral award is null and void; third, the claims that the return of service of summons is a prima facie evidence of the recited facts
venue was improperly laid in Makati; and lastly, the enforcement of the arbitral award was i.e., that Tejero is a corporate secretary as stated therein and that the sheriff is presumed to
against public policy.15 have regularly performed his official duties in serving the summons. In the alternative, Tung
Ho argues that Ting Guan’s successive motions before the RTC are equivalent to voluntary
On April 24, 2007, Tung Ho filed its Comment dated April 24, 2007 in G.R. No. 176110, appearance. Tung Ho also prays for the issuance of alias summons to cure the alleged
touching on the issue of jurisdiction, albeit lightly. Tung Ho complained in its Comment that defective service of summons.16
Ting Guan engaged in dilatory tactics when Ting Guan belatedly raised the issue of
jurisdiction in the motion for reconsideration before the RTC. However, Tung Ho did not Respondent Ting Guan’s Position
affirmatively seek the reversal of the July 5, 2006 decision. Instead, it merely stated that Ting
Guan’s petition "cannot be dismissed on the ground that the summons was wrongfully issued (G.R. No. 182153)
as the petitioner can always move for the issuance of an alias summons to be served".
Furthermore, Tung Ho only prayed that Ting Guan’s petition be denied in G.R. No. 176110
In its Comment, Ting Guan submits that the appeal is already barred by res judicata. It also
and for other just and equitable reliefs. In other words, Tung Ho failed to effectively argue its stresses that the Court has already affirmed with finality the dismissal of the complaint.17 Ting
case on the merits before the Court in G.R. No. 176110. Guan also argues that Tung Ho raises a factual issue that is beyond the scope of a petition
for review on certiorari under Rule 45 of the Rules of Court.18
On June 18, 2007, we issued our Resolution denying Ting Guan’s petition for lack of merit.
On November 12, 2007, we also denied Ting Guan’s motion for reconsideration. On January
The Issues
8, 2008, the Court issued an entry of judgment in Ting Guan’s petition, G.R. No. 176110.
This case presents to us the following issues:
After the entry of judgment, we referred the matter back to the RTC for further proceedings.
On January 16, 2008, the RTC declared the case closed and terminated. Its order stated:
1) Whether the present petition is barred by res judicata; and
Upon examination of the entire records of this case, an answer with caution was actually filed
by the respondent to which a reply was submitted by the petitioner. Since the answer was 2) Whether the trial court acquired jurisdiction over the person of Ting Guan,
with the qualification that respondent is not waiving its claim of lack of jurisdiction over its specifically:
person on the ground of improper service of summons upon it and that its petition to this
effect filed before the Court of Appeals was acted favorably and this case was dismissed on a) Whether Tejero was the proper person to receive the summons; and
the aforementioned ground and it appearing that the Decision as well as the Order denying
the motion for reconsideration of the petitioner now final and executory, the Order of b) Whether Ting Guan made a voluntary appearance before the trial court.
November 9, 2007 referring this petition to the Court Annexed Mediation for possible
amicable settlement is recalled it being moot and academic. This case is now considered The Court’s Ruling
closed and terminated.
We find the petition meritorious.
On February 6, 2008, Tung Ho moved to reconsider the RTC order. Nothing in the records
shows whether the RTC granted or denied this motion for reconsideration.
I. The Court is not precluded from ruling on the jurisdictional issue raised in the petition
A. The petition is not barred by res judicata
Res judicata refers to the rule that a final judgment or decree on the merits by a court of
competent jurisdiction is conclusive on the rights of the parties or their privies in all later suits
on all points and matters determined in the former suit. 19 For res judicata to apply, the final
judgment must be on the merits of the case which means that the court has unequivocally
determined the parties’ rights and obligations with respect to the causes of action and the
subject matter of the case.20
Contrary to Ting Guan’s position, our ruling in G.R. No. 176110 does not operate as res
judicata on Tung Ho’s appeal; G.R. No. 176110 did not conclusively rule on all issues raised
by the parties in this case so that this Court would now be barred from taking cognizance of
Tung Ho’s petition. Our disposition in G.R. No. 176110 only dwelt on technical or collateral
aspects of the case, and not on its merits. Specifically, we did not rule on whether Tung Ho
may enforce the foreign arbitral award against Ting Guan in that case.
B. The appellate court cannot be ousted of jurisdiction until it finally disposes of the case
The court’s jurisdiction, once attached, cannot be ousted until it finally disposes of the case.
When a court has already obtained and is exercising jurisdiction over a controversy, its
jurisdiction to proceed to the final determination of the case is retained. 21 A judge is
competent to act on the case while its incidents remain pending for his disposition.
The CA was not ousted of its jurisdiction with the promulgation of G.R. No. 176110. The July
5, 2006 decision has not yet become final and executory for the reason that there remained
a pending incident before the CA – the resolution of Tung Ho’s motion for reconsideration –
when this Court promulgated G.R. No. 176110. In this latter case, on the other hand, we only
resolved procedural issues that are divorced from the present jurisdictional question before
us. Thus, what became immutable in G.R. No. 176110 was the ruling that Tung Ho’s
complaint is not dismissible on grounds of prematurity, nullity of the foreign arbitral award,
improper venue, and the foreign arbitral award’s repugnance to local public policy. This leads
us to the conclusion that in the absence of any ruling on the merits on the issue of jurisdiction,
res judicata on this point could not have set in.
C. Tung Ho’s timely filing of a motion for reconsideration and of a petition for review on
certiorari prevented the July 5, 2006 decision from attaining finality
Furthermore, under Section 2, Rule 45 of the Rules of Court, Tung Ho may file a petition for
review on certiorari before the Court within (15) days from the denial of its motion for
reconsideration filed in due time after notice of the judgment. Tung Ho’s timely filing of a
motion for reconsideration before the CA and of a Rule 45 petition before this Court prevented
the July 5, 2006 CA decision from attaining finality. For this Court to deny Tung Ho’s petition
would result in an anomalous situation where a party litigant is penalized and deprived of his
fair opportunity to appeal the case by faithfully complying with the Rules of Court.
II. The trial court acquired jurisdiction over the person of Ting Guan
A. Tejero was not the proper person to receive the summons
Nonetheless, we see no reason to disturb the lower courts’ finding that Tejero was not a
corporate secretary and, therefore, was not the proper person to receive the summons under
Section 11, Rule 14 of the Rules of Court. This Court is not a trier of facts; we cannot re-
examine, review or re-evaluate the evidence and the factual review made by the lower courts.
In the absence of compelling reasons, we will not deviate from the rule that factual findings
of the lower courts are final and binding on this Court.22
B. Ting Guan voluntarily appeared before the trial court
However, we cannot agree with the legal conclusion that the appellate court reached, given
the established facts.23To our mind, Ting Guan voluntarily appeared before the trial court in
view of the procedural recourse that it took before that court. Its voluntary appearance is
equivalent to service of summons.24
As a basic principle, courts look with disfavor on piecemeal arguments in motions filed by the
parties. Under the omnibus motion rule, a motion attacking a pleading, order, judgment, or
proceeding shall include all objections then available.25 The purpose of this rule is to obviate
multiplicity of motions and to discourage dilatory motions and pleadings. Party litigants should
not be allowed to reiterate identical motions, speculating on the possible change of opinion
of the courts or of the judges thereof.
In this respect, Section 1, Rule 16 of the Rules of Court requires the defendant to file a motion
to dismiss within the time for, but before filing the answer to the complaint or pleading
asserting a claim. Section 1, Rule 11 of the Rules of Court, on the other hand, commands
the defendant to file his answer within fifteen (15) days after service of summons, unless a
different period is fixed by the trial court. Once the trial court denies the motion, the defendant
should file his answer within the balance of fifteen (15) days to which he was entitled at the
time of serving his motion, but the remaining period cannot be less than five (5) days
computed from his receipt of the notice of the denial. 26
Instead of filing an answer, the defendant may opt to file a motion for reconsideration. Only
after the trial court shall have denied the motion for reconsideration does the defendant
become bound to file his answer.27 If the defendant fails to file an answer within the
reglementary period, the plaintiff may file a motion to declare the defendant in default. This
motion shall be with notice to the defendant and shall be supported by proof of the failure.28
The trial court’s denial of the motion to dismiss is not a license for the defendant to file a Rule
65 petition before the CA. An order denying a motion to dismiss cannot be the subject of a
petition for certiorari as the defendant still has an adequate remedy before the trial court –
i.e., to file an answer and to subsequently appeal the case if he loses the case.29 As
exceptions, the defendant may avail of a petition for certiorari if the ground raised in the
motion to dismiss is lack of jurisdiction over the person of the defendant30 or over the subject
matter.31
We cannot allow and simply passively look at Ting Guan’s blatant disregard of the rules of
procedure in the present case. The Rules of Court only allows the filing of a motion to dismiss
once.32 Ting Guan’s filing of successive motions to dismiss, under the guise of "supplemental
motion to dismiss" or "motion for reconsideration", is not only improper but also
dilatory.33 Ting Guan’s belated reliance on the improper service of summons was a mere
afterthought, if not a bad faith ploy to avoid the foreign arbitral award’s enforcement which is
still at its preliminary stage after the lapse of almost a decade since the filing of the complaint.
Furthermore, Ting Guan’s failure to raise the alleged lack of jurisdiction over its person in the
first motion to dismiss is fatal to its cause. Ting Guan voluntarily appeared before the RTC
when it filed a motion to dismiss and a "supplemental motion to dismiss" without raising the
RTC’s lack of jurisdiction over its person. In Anunciacion v. Bocanegra, 34 we categorically
stated that the defendant should raise the affirmative defense of lack of jurisdiction over his
person in the very first motion to dismiss. Failure to raise the issue of improper service of
summons in the first motion to dismiss is a waiver of this defense and cannot be belatedly
raised in succeeding motions and pleadings.
Even assuming that Ting Guan did not voluntarily appear before the RTC, the CA should
have ordered the RTC to issue an alias summons instead. In Lingner & Fisher GMBH vs.
Intermediate Appellate Court35, we enunciated the policy that the courts should not dismiss
a case simply because there was an improper service of summons. The lower courts should
be cautious in haphazardly dismissing complaints on this ground alone considering that the
trial court can cure this defect and order the issuance of alias summons on the proper person
in the interest of substantial justice and to expedite the proceedings.
III. A Final Note
As a final note, we are not unaware that the present case has been complicated by its unique
development. The complication arose when the CA, instead of resolving the parties’ separate
partial motions for reconsideration in one resolution, proceeded to first resolve and to deny
Ting Guan’s partial motion. Ting Guan, therefore, went to this Court via a petition for review
on certiorari while Tung Ho’s partial motion for reconsideration was still unresolved.
Expectedly, Ting Guan did not question the portions of the CA decision favorable to it when
it filed its petition with this Court. Instead, Ting Guan reiterated that the CA should have
included additional grounds to justify the dismissal of Tung Ho’s complaint with the RTC. The
Court denied Ting Guan’s petition, leading to the entry of judgment that improvidently
followed. Later, the CA denied Tung Ho’s partial motion for reconsideration, prompting Tung
Ho’s own petition with this Court, which is the present G.R. No. 182153.
Under the Rules of Court, entry of judgment may only be made if no appeal or motion for
reconsideration was timely filed.36 In the proceedings before the CA, if a motion for
reconsideration (including a partial motion for reconsideration 37) is timely filed by the proper
party, execution of the CA’s judgment or final resolution shall be stayed.38 This rule is
applicable even to proceedings before the Supreme Court, as provided in Section 4, Rule 56
of the Rules of Court.39
In the present case, Tung Ho timely filed its motion for reconsideration with the CA and
seasonably appealed the CA’s rulings with the Court through the present petition (G.R. No.
182153).
To now recognize the finality of the Resolution of Ting Guan petition (G.R. No. 176110) based
on its entry of judgment and to allow it to foreclose the present meritorious petition of Tung
Ho, would of course cause unfair and unjustified injury to Tung Ho. First, as previously
mentioned, the Ting Guan petition did not question or assail the full merits of the CA decision.
It was Tung Ho, the party aggrieved by the CA decision, who substantially questioned the
merits of the CA decision in its petition; this petition showed that the CA indeed committed
error and Tung Ho’s complaint before the RTC should properly proceed. Second, the present
case is for the enforcement of an arbitral award involving millions of pesos. Tung Ho already
won in the foreign arbitration and the present case is simply for the enforcement of this arbitral
award in our jurisdiction. Third, and most importantly, Tung Ho properly and timely availed of
the remedies available to it under the Rules of Court, which provide that filing and pendency
of a motion for reconsideration stays the execution of the CA judgment. Therefore, at the
time of the entry of judgment in G.R. No. 176110 in the Supreme Court on January 8, 2008,
the CA decision which the Court affirmed was effectively not yet be final.
Significantly, the rule that a timely motion for reconsideration stays the execution of the
assailed judgment is in accordance with Rule 51, Section 10 (Rules governing the CA
proceedings) which provides that "entry of judgments may only be had if there is no appeal
or motion for reconsideration timely filed. The date when the judgment or final resolution
becomes executory shall be deemed as the date of its entry." Incidentally, this procedure
also governs before Supreme Court proceedings.40 Following these rules, therefore, the
pendency of Tung Ho’s MR with the CA made the entry of the judgment of the Court in the
Ting Guan petition premature and inefficacious for not being final and executory.
Based on the above considerations, the Court would not be in error if it applies its ruling in
the case of Realty Sales Enterprises, Inc. and Macondray Farms, Inc. v. Intermediate
Appellate Court, et al.41 where the Court, in a per curiam resolution, ruled that an entry of
judgment may be recalled or lifted motu proprio when it is clear that the decision assailed of
has not yet become final under the rules:
The March 6, 1985 resolution denying reconsideration of the January 30, 1985 resolution
was, to repeat, not served on the petitioners until March 20, 1985 - and therefore the Jan.
30, 1985 resolution could not be deemed final and executory until one (1) full day (March 21)
had elapsed, or on March 22, 1985 (assuming inaction on petitioners' part.) The entry of
judgment relative to the January 30, 1985 resolution, made on March 18, 1985, was therefore
premature and inefficacious. An entry of judgment does not make the judgment so entered
final and execution when it is not so in truth. An entry of judgment merely records the fact
that a judgment, order or resolution has become final and executory; but it is not the operative
act that make the judgment, order or resolution final and executory. In the case at bar, the
entry of judgment on March 18, 1985 did not make the January 30, 1985 resolution subject
of the entry, final and executory, As of the date of entry, March 18, 1985, notice of the
resolution denying reconsideration of the January 30, 1985 resolution had not yet been
served on the petitioners or any of the parties, since March 18, 1985 was also the date of the
notice (and release) of the March 6, 1985 resolution denying reconsideration.1âwphi1

According to this ruling, the motu proprio recall or setting aside of the entry of final judgment
was proper and "entirely consistent with the inherent power of every court inter alia to amend
and control its process and orders so as to make them conformable to law and justice [Sec.
5(g), Rule 135, Rules of Court,]. That the recall has in fact served to achieve a verdict
consistent with law and justice is clear from the judgment subsequently rendered on the
merits." This course of action is effectively what the Court undertook today, adapted of course
to the circumstances of the present case.

In light of these premises, we hereby REVERSE and SET ASIDE the July 5, 2006 decision
and the March 12, 2008 resolution of the Court of Appeals in CA-G.R. SP No. 92828. SP.
Proc. No. 11.-5954 is hereby ordered reinstated. Let the records of this case be remanded
to the court of origin for further proceedings. No costs.

SO ORDERED.