Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-11986 July 31, 1958 BERNARDO MANALANG, ET AL., petitioners-appellants, vs. ELVIRA TUASON DE RICKARDS, ET AL., respondent-appellees. Luis Manalang and Associates for appellants. Jorge V. Jazmines for appellees. FELIX, J.: Elvira Vidal Tuason de Rickards is the owner of private subdivision located at Sampaloc, Manila, with an area of 44,561.80 square meters covered by Transfer Certificate of Title No. 40961 (Exhibit 13) in 1954, the lots therein were leased to various tenants among whom were Bernardo Manalang, Vicente de Leon and Salvador de Leon occupying Lots Nos. 174-C, 160 and 158, respectively. As the City of Manila allegedly increased the assessment of said land effective January 1, 1954, the administrator thereof notified the tenants of the corresponding increase of the rentals of the lots therein, such that the rental for the lot occupied by Bernardo Manalang was raised from P36 to 80; the rental for Lot No. 160 was raised from P10 to P43.12; and from P24 to P51.24 for Lot No. 158. The said tenants, however, insisted on paying the former rate, and as the landowner refused to accept the same, the former consigned them in court. On April 27, 1954, Elvira Vidal Tuason de Rickards, assisted by her husband, Jose A. Rickards, instituted with the Municipal Court of Manila Civil Case No. 31401 against Bernardo Manalang; Civil Case No. 31406 against Salvador de Leon; and Civil Case No. 31411 against Vicente de Leon, all for ejectment. Therein defendants filed separate motions to dismiss invoking the provisions of Republic Act No. 1162, which was approved on June 18, 1954. The matter was duly heard and on July 14, 1954, the Municipal Judge of Manila issued an order denying the motions to dismiss and suspending the proceedings for 2 years from the enactment of Republic Act No. 1162 or until further order from the Court. On April 13, 1955, upon motion of the plaintiffs, the Municipal Judge issued an order setting the cases for hearing on the merits. Defendants tried to secure a reconsideration of the aforesaid order, but as their motion was denied, they filed a petition for certiorari and prohibition with the Court of First Instance of Manila (Civil Case No. 26135) against the spouses Rickards and the Judges of the Municipal Court of Manila, alleging that the order of the same Court of July 14, 1954, already disposed of the action and determined the rights of the parties. It was thus prayed that a writ enjoining the respondent Judges from proceeding with the hearing the cases be issued; that said respondents be declared without jurisdiction to hear the same; and that the orders of Municipal Judge Estrella Abad Santos setting the case for hearing on the merits and the order of Acting Judge Sumilang Bernardo denying their motion for reconsideration be set aside and declared null and void. To this petition, the respondent spouses filed their answer denying some of the averments of the same. And special defenses, it was contended that the order of July 14, 1954, did not settle the controversy it being merely an interlocutory order, and as such could not be reviewed by a petition for certiorari. It was, therefore, prayed that the petition be dismissed and the Municipal Judges be ordered to hear the cases on the merits. On February 6, 1956, the Court of First Instance of Manila dismissed the petition on the ground that the order of the inferior court was merely interlocutory in nature, and that the statements contained in the body thereof were the basis of the court's ruling, as embodied in the dispositive part thereof denying the motion to dismiss and suspending the proceedings therein for 2 years or until further order from the court. From this decision, defendants appealed to the Court of Appeals, but the latter tribunal certified the case to Us on the ground that it involves only a question purely of law. The main issue presented by the instant action is whether the order of the inferior court of July 14, 1954, is interlocutory or not and consequently, whether the lower court erred in dismissing the petition for certiorari and prohibition filed therein. The aforementioned order of the Municipal Judge dated July 14, 1954, is hereunder copied in full: ORDER After a thorough consideration of the Motion to Dismiss and the opposition thereto, this Court is of the opinion and so holds that from the approval of Republic Act No. 1162 no ejectment proceedings should be instituted or prosecuted against any tenant or occupant and that the unpaid rentals of the tenants, if any they have, shall be liquidated and shall be paid in 18, equal monthly installments from the date or time of liquidation and that the landlord cannot charge more than the amount being charged or collected by them from their tenants as of December 31, 1953. It is undisputed fact that the premises occupied by the herein-defendants have been and are actually being leased to tenants, for which reason it is governed by the provisions of the aforesaid Act. But inasmuch as these three cases of ejectment have been instituted before the approval of said Act, it is the considered opinion of this Court that its prosecution should be suspended. As to the motion to dismiss same is untenable and without merit, for if these cases of ejectment will be dismissed as claimed by the herein defendants, the liquidation of the unpaid rentals could not be carried out effectively as provided by said Act. As to the unconstitutionality of section 5 of the Republic Act in question, the presumption is that same is valid and constitutional until it is declared otherwise by the competent tribunal, for which reason we deem it our bounden duty to enforce the avowed policy of the Republic of the Philippines, as expressed in said Act (Pastor Mauricio et al. vs. Hon. Felix Martinez et al., CA-G. R. 5114-R, promulgated January 31, 1952). WHEREFORE, this Court orders the denial of the motion to dismiss, and the suspension of the proceedings in the three above-entitled cases during the period of two years from the approval of Republic Act No. 1162 or until further order of this Court. We see no reason why the ruling of the lower Court should not be affirmed. The order of the Municipal Judge of July 14, 1954, is clear enough to call for any construction or interpretation, for while it opens with the paragraph stating that it was the opinion of the court "and so holds that from the approval of Republic Act No. 1162 no ejectment proceedings should be instituted", etc., the dispositive portion of the order decreed the denial of the motion to dismiss which was based on the same Republic Act No. 1162. And this ruling is understandable. It appears that the actions for ejectment were filed before the enactment of Republic Act No. 1162 and conceivably under the general principle that laws can only be enforced prospectively, the Municipal Judge for one reason or another saw it fit to suspend the proceedings for quite a long period, probably with the expectation that the question of the constitutionality of Republic Act No. 1162 might be in the meantime duly passed upon. It can be seen from the foregoing that the issues presented in the ejectment proceedings were not settled thereby, for precisely the motion to dismiss filed by defendants based on the provisions of Republic Act No. 1162 was denied. Certainly, said actions having been merely suspended, and the jurisdiction of the court over said proceedings not having been assailed, the said court has the power to reopen the same for trial on the merits in order that the rights of the parties therein could be finally determined. It is argued, however, by appellants that the body of the order recognized the prohibition laid down by Republic Act No. 1162 against the institution of ejectment proceedings after the effectivity of said Act. It is an elementary principle of procedure that the resolution of the Court on a given issue as embodied in the dispositive part of the decision or order is the investitive or controlling factor that determines and settles the rights of the parties and the questions presented therein, notwithstanding the existence of statements or declarations in the body of said order that may be confusing. In the case at bar, considering that the dispositive part of the order merely suspended the proceedings without touching on the merits of the case or disposing of the issues involved therein, said order cannot be said to be final in character but clearly an interlocutory one which in this case cannot be the subject of an action for certiorari. Wherefore, and acting merely on the question of procedure submitted to Us by the instant appeal, We have to affirm, as We do hereby affirm, the order of the lower Court dismissing appellant's petition for certiorari and prohibition. Without pronouncement as to costs. It is ordered. Paras, C. J., Bengzon, Padilla, Montemayor, Reyes, A., Bautista Angelo, Conception, Reyes, J. B. L. and Endencia, JJ., concur. Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No. L-33140 October 23, 1978 J. M. TUASON & CO., INC., JOSE M. TUASON, NICASIO A. TUASON, TERESA TUASON, CELSO S. TUASON and SEVERO A. TUASON, petitioners, vs. HON. HERMINIO C. MARIANO, Presiding Judge of the Court of First Instance of Rizal MANUELA AQUIAL, MARIA AQUIAL, Spouses JOSE M. CORDOVA and SATURNINA C. CORDOVA, respondents. Sison Law Office and Senensio O. Ortile for petitioners. Hill & Associates Law Office for respondents Aquials. Antonio E. Pesigan for respondents Cordovas. AQUINO, J.: This is another litigation regarding the validity of the much controverted Original Certificate of Title No. 735 covering the Santa Mesa and D Estates of the Tuason mayorazgo or Entail with areas of 877 (879) and 1,625 hectares, respectively (Barrette vs. Tuason, 50 Phil. 888; Benin case, infra). On October 1, 1965, Manuela Aquial and Maria Aquial filed a complaint in forma pauperis in the Court of First Instance of Rizal Pasig Branch X, wherein they prayed that they be declared the owners of a parcel of land located at Balara, Marikina, Rizal (now Quezon City) and bounded on the north by Sapang Mapalad, on the south by the land of Eladio, Tiburcio on the east by Sapang Kolotkolotan, and on the west by Sapang Kuliat The land, which has an area of three hundred eighty-three quiñones was allegedly acquired by their father by means of a Spanish title issued to him on May 10, 1877 (Civil Case No. 8943). They alleged that sometime in 1960, or after J. M. Tuason & Co., Inc. had illegally entered upon that land, they discovered that it had been fraudulently or erroneously included in OCT No. 735 of the Registry of Deeds of Rizal and that it was registered in the names of defendants Mariano, Teresa, Juan, Demetrio and Augusta all surnamed Tuason pursuant to a decree issued on July 6. 1914 in Case No. 7681 of the Court of Land Registration. They further alleged that transfer certificates of title, derived from OCT No. 735, were issued to defendants J. M. Tuason & Co., Inc., University of the Philippines and National Waterworks and Sewerage Authority (Nawasa) which leased a portion of its land to defendant Capitol Golf Club. Plaintiffs Aquial prayed that OCT No. 735 and the titles derived therefrom be declared void due to certain irregularities in the land registration proceeding. They asked for damages. Defendant J.M. Tuason & Co., Inc. filed a motion to dismiss on the grounds of lack of jurisdiction, improper venue, prescription, laches and prior judgment. The plaintiffs opposed that motion. The lower court denied it. The grounds of the motion to dismiss were pleaded as affirmative defenses in the answer of defendants Tuason and J. M. Tuason & Co., Inc. They insisted that a preliminary hearing be held on those defenses. On January 25, 1967, the spouses Jose M. Cordova and Saturnina C. Cordova, who had bought eleven hectares of the disputed land from the plaintiffs, were allowed to intervene in the case. On September 5, 1970, the lower court issued an order requiring the parties the Register of Deeds of Rizal to produce in court on October 16, 1970 OCT No. 735 and certain transfer certificates of title derived from that first or basic title. Later, the court required the production in court of the plan of the land covered by OCT No. 735 allegedly for the purpose of determining whether the lands claimed by the plaintiffs and the intervenors are included therein. On February 11, 1971, the Tuason and J. M. Tuason & Co., Inc. filed the instant civil actions of certiorari and prohibition praying, inter alia, that the trial court be ordered to dismiss the complaint and enjoined from proceeding in the said case. After the petitioners had filed the proper bond, a writ of preliminary injunction was issued. Respondents Aquial and Cordova answered the petition. The parties, except the Aquials, filed memoranda in lieu of oral argument. The issue is whether OCT No. 735 and the titles derived therefrom can be questioned at this late hour by respondents Aquial and Cordova. The supposed irregularities in the land registration proceeding, which led to the issuance of the decree upon which OCT. No. 735 was based, are the same issues raised in Civil Cases Nos. 3621, 3622 and 3623 of the lower court. The 1965 decision of Judge Eulogio Mencias in those cases, in validating OCT No. 735, is annexed to the complaint of the Aquials. It is cited by them to support their support their action and it might have encouraged them to ventilate their action in court. On appeal to this Court, that decision was reversed and the validity of OCT No. 735 and the titles derived therefrom was once more upheld. (Benin vs. Tuason, L-26127, Alcantara vs. Tuason, L-26128 and Pili vs. Tuason, L26129, all decided on June 28, 1974, 57 SCRA 531). The ruling in the Benin, Alcantara and Pili cases was applied in Mara, Inc. vs. Estrella, L-40511, July 25, 1975, 65 SCRA 471. That ruling is simply a reiteration or confirmation of the holding in the following cases directly or incidentally sustaining OCT No. 735: Bank of the P. I. vs. Acuña, 59 Phil. 183; Tiburcio vs. PHHC, 106 Phil. 447; Galvez and Tiburcio vs. Tuason y de la Paz, 119 Phil. 612; Alcantara vs. Tuason, 92 Phil. 796; Santiago vs. J. M. Tuason & Co., Inc. 110 Phil. 16; J. M. Tuason & Co., Inc. vs. Bolaños, 95 Phil. 106; J. M. Tuason & Co., Inc. vs. Santiago, 99 Phil. 615; J. M. Tuason & Co., Inc. vs. De Guzman, 99 Phil. 281; J. M. Tuason & Co., Inc. vs. Aguirre, 117 Phil. 110; J. M. Tuason & Co., Inc. vs. Macalindong, 116 Phil. 1227; J. M. Tuason & Co., Inc. vs. Magdangal, 114 Phil. 42; Varsity Hills, Inc. vs. Navarro, L-30889, February 29, 1972, 43 SCRA 503, and People's Homesite and Housing Corporation vs. Mencias, L-24114, August 16, 1967, 20 SCRA 1031. Considering the governing principle of stare decisis et non quieta movere (follow past precedents and do not disturb what has been settled) it becomes evident that respondents Aquial and Cordova cannot maintain their action in Civil Case No. 8943 without eroding the long settled holding of the courts that OCT No. 735 is valid and no longer open to attack. It is against public policy that matters already decided on the merits be relitigated again and again, consuming the court's time and energies at the expense of other litigants: Interest rei publicae ut finis sit litium." (Varsity Hills, Inc. vs. Navarro, supra). Finding the petition for certiorari and prohibition to be meritorious, the trial court is directed to dismiss Civil Case No. 8943 with prejudice and without costs. No costs. SO ORDERED. Barredo (Actg. Chairman), Antonio, Concepcion Jr., and Santos, JJ., concur. Fernando, J, took no part M TUASON AND CO. INC. VS. MARIANOGR 3314O OCTOBER 23, 1978FACTS: Respondents filed a complaint praying that they be declaredowners of a certain parcel of land located in Rizal. They alleged thattheir father acquired this land with a Spanish title. They alleged thatpetitioner fraudulently or included the land in an original certificate oftitle. They also alleged that transfer certificates of title were issued topetitioners irregularly. Given such, they are praying that the titlesderived therefrom be declared void due to irregular proceedings.The lower court issued an order requiring the parties to producedocuments to support their allegations. With this, the petitioner filed apetition for certiorari and prohibition, inter alia, that the lower court beordered to dismiss the complaint and enjoined from proceeding thecase.Before this present complaint, the respondents had already fileda complaint questioning the validity of the titles of petitioner, whereinthe lower court and the SC upheld its validity. ISSUE: Whether or not the titles can still be questioned by respondents? HELD: They cannot anymore question. Considering the principle ofstare decisis, the respondents cannot anymore continue with theiraction without eroding the long settled holding of the courts of thevalidity of the titles and no longer open to attack.It is against public policy that matters already decided on themerits be relitigated again and again, consuming the court’s time andenergies at the expense of other litigants. FIRST DIVISION [ G.R. No. L-39674, January 31, 1978 ] URBANA VELASCO AROC ASSISTED BY HER HUSBAND CELESTINO AROC, PLAINTIFF-APPELLANT, VS. PEOPLE'S HOMESITE AND HOUSING CORPORATION AND CIRILO B. GARCIA AND FELICIANA BITO, DEFENDANTSAPPELLEES. DECISION GUERRERO, J.: This case was certified to Us by the Court of Appeals[1] in CA-G.R. No. 46525-R entitled "Urbana Velasco Aroc assisted by her husband Celestino Aroc, Plaintiff-Appellant, versus People's Homesite and Housing Corporation and Cirilo B. Garcia and Feliciana Bito, Defendants-Appellees," pursuant to the provisions of Section 17 of Republic Act No. 296, as amended, and Section 3, Rule 50 of the Revised Rules of Court per its Resolution dated October 31, 1974 since the appeal involves pure questions of law. Plaintiff-appellant appealed to the Court of Appeals the order of the Court of First Instance of Rizal in Civil Case No. Q-11807 dismissing on the ground of res judicata the complaint to declare null and void the award and sale of a parcel of land, known as Lot 6, Block E-144, Piñahan Subdivision, Quezon City, to defendants-appellees Cirilo B. Garcia and his spouse, Feliciana Bito, by the other defendant-appellee PHHC, and the cancellation of the certificate of title issued to said spouses. The facts are as stated in the Resolution of the Court of Appeals, thus: "From the allegations of the complaint we gather that as early as 1952 plaintiff and her family started occupying one-half of the lot in controversy while a certain Alfonso Naparan and his family occupied the other half. In 1956 plaintiff constructed a house of strong materials worth P3,270, planted fruit-bearing trees and fenced the portion occupied by her. In May 1956 she filed with defendant corporation an application for the award and sale of said portion to her. She filed another application in January 1957. Later she discovered that both applications were missing from the files of defendant corporation. Upon suggestion of an official of the latter, she reapplied for the same portion of Lot 6 on February 3, 1966. However, Lot 6 was unlawfully and in bad faith awarded and sold to defendantsspouses who were disqualified from purchasing it, since they had previously purchased a 1,450-square meter lot (Lot 12, Block W-28) from defendant corporation and already owned several lots in Greater Manila. It is further gathered that plaintiff formally protested the award and sale of Lot 6 to defendants-spouses with the Board of Directors of defendant corporation. The investigating officer recommended the rescission of the conditional sale of Lot 6 and the award of the lot to plaintiff and Alfonso Naparan. In spite of said recommendation defendant corporation executed a deed of sale in favor of defendants-spouses. Transfer Certificate of Title No. 106146 covering the lot was subsequently issued to them by the Register of Deeds of Quezon City. At the time of the filing of the complaint on January 22, 1968, plaintiff and her family were still occupying one-half portion of the lot. In its answer with counterclaim, defendant corporation denied the material allegations of the complaint and, as special and affirmative defenses, alleged that the complaint stated no cause of action; that plaintiff was a mere squatter of Lot 6; that the award and sale of said lot to defendants-spouses was legal and valid, for they had complied with the requirements imposed by defendant corporation for its acquisition; and that plaintiff's claim had been passed upon by an investigating committee which found the same to be without basis. Defendants-spouses likewise denied the material allegations of the complaint. They set up as special and affirmative defenses the following: that there was a pending action to quiet title and/or recovery of possession of Lot 6 with preliminary injunction and damages filed by them against Alfonso Naparan and herein plaintiff (Civil Case No. Q-10442) and in her answer she raised the same issues of fact and law alleged by her in the present complaint; that there was a valid ground to dismiss the new complaint due to the pendency of Civil Case No. Q-10442 between the same parties for the same cause of action; that Lot 6 was lawfully awarded and sold to them by defendant corporation and if ever plaintiff suffered damages her action should be against the corporation; that plaintiffs could no longer question the validity of the award and sale, since it was duly approved by the General Manager of defendant corporation after three investigations on plaintiff's protest had been conducted and she had been given the opportunity to air her grievances, but her protest was dismissed for lack of merit. Defendants-spouses later amended their answer to include the following allegation: "6-A. That on December 26, 1968, the Honorable Judge Honorato B. Masakayan, Branch V of this Court rendered judgment in Civil Case No. Q10442, the dispositive portion of which is quoted as follows: "'WHEREFORE, judgment is hereby rendered in favor of plaintiff Cirilo B. Garcia and against defendants Alfonso Naparan and Urbana Velasco Vda. de Aroc, declaring plaintiff Cirilo B. Garcia the rightful and legal owner of Lot 6, Block E-144, Piñahan Subdivision, Quezon City, and ordering the defendants Alfonso Naparan and Urbana Velasco Vda. de Aroc and all persons claiming rights under them to vacate the premises in question and restore the possession thereof to the plaintiff, and to pay the plaintiff the sum of P500.00 as attorney's fees and to pay the costs of suit. "'SO ORDERED.' so much so that the above decision having become final and executory, there is nothing left for this Honorable Court to do except to dismiss the instant complaint based on the doctrine of res judicata, otherwise there will be no more end to the controversy, as the parties will be litigating all over again on the same issues. Two days after the filing of the amended answer, defendants-spouses moved for the dismissal of the action on the ground of res judicata or bar by prior judgment. Attached to their motion were the complaint, answer and decision in Civil Case No. Q-10442. The court granted the motion and dismissed the action. Appellant now assails before this Court the order of dismissal, claiming that the principle of res judicata is not applicable, the requisite that there must be identity of cause of action between the two cases not being present, since the case on appeal is for annulment of the award and sale of Lot 6 to defendants-spouses while Civil Case No. Q-10442 was for quieting of title and/or recovery of possession. Thus, the sole issue to determine is whether or not the final judgment in Civil Case No. Q-10442 is a bar to the case before us. This involves a question of law (Bengua vs. Abay, CA-G.R. No. 19408-R, July 30, 1959) which is not within the jurisdiction of this Court to decide. It is for the Supreme Court to pass upon the issue in accordance with Section 17 of Republic Act No. 296, as amended. Said section vests in the Supreme Court exclusive appellate jurisdiction over cases in which only errors or questions of law are involved." Plaintiff-appellant, litigating this case on appeal as a pauper-litigant, contends that the trial court erred in dismissing her complaint on the ground of res judicata. We find the contention to be meritorious. In determining whether the final judgment in the first case, Civil Case No. Q-10442 for quieting of title and/or recovery of possession, constitutes res judicata as would bar the appellant's complaint in Civil Case No. Q-11807, now subject of this appeal, for annulment of award and deed of sale and cancellation of the certificate of title to the land, We must examine if between these two cases the requisites of res judicata are present, namely: 1) The former judgment must be final; 2) It must have been rendered by a court having jurisdiction over the subject matter and over the parties; 3) It must be a judgment on the merits; and 4) There must be, between the first and second actions, identity of parties, of subject matter and cause of action.[2] It is only in the identity of cause of action that the parties dispute and disagree. The term "cause of action" has been defined as "an act or omission of one party in violation of the legal right or rights of the other; and its essential elements are legal right of the plaintiff, correlative obligation of the defendant, and act or omission of the defendant in violation of said legal right".[3] Is there identity of cause of action between the two aforementioned cases, the first case for quieting of title and/or recovery of possession and the second case for annulment of award and deed of sale and can-cellation of certificate of title? This query can be answered by a searching look into and a careful perusal of the records of said two cases. In the first case, the records disclose that on Sept. 16, 1966, defendantappellee, Colonel Cirilo V. Garcia, filed against plaintiff-appellant Urbana Velasco Aroc and Juan Alfonso Naparan the complaint alleging that plaintiff therein is the absolute owner in fee simple of the parcel of land, Lot No. 6, Block E-144 Piñahan Subdivision; that he acquired the land by way of purchase from the PHHC on December 8, 1965; that said lot is now titled in the name of the plaintiff and is covered by TCT No. 106146 of the Register of Deeds of Quezon City; that defendant therein, Urbana Velasco Aroc, asserts a claim of ownership and right of possession to the land and in fact still occupies the land; that defendant's claim of ownership and possession is invalid, ineffective and prejudicial to plaintiff's title as owner in fee simple, consequently entitling plaintiff to bring an action to remove the cloud on and to quiet his title; that defendant owns a house constructed on the western portion of the land and refuses to demolish or remove the same notwithstanding plaintiff's demand therefor. The above allegations state the basic or ultimate facts which constitute complainant's cause of action. Defendant Urbana Velasco Aroc having filed her answer on November 29, 1966 but failed to appear at the trial of the case, judgment was rendered in favor of the plaintiff, declaring him the rightful and legal owner of the land, and ordering defendant to vacate the premises in question and restore possession thereof to the plaintiff plus the payment of attorneys fees and costs. The above judgment became final and executory during the pendency of the present case. In the second case, now subject of this appeal in Civil Case No. 11807 instituted on January 22, 1968, the plaintiff therein (Urbana Velasco Aroc) alleged that she is a bonafide occupant and possessor of the one-half portion of Lot 6, Block E-144 Piñahan Subdivision; that she started occupying the lot as early as 1952; that in 1956, she built her own house therein made of strong materials, introduced improvements and fenced the area; that she applied for the award and subsequent sale to her of the one-half portion in May, 1946, reiterated in January, 1957 and re-applied on Feb. 3, 1966; that the lot was, however, awarded later to the defendant Cirilo V. Garcia and his wife Feliciana Bito in bad faith, contrary to law and public policy. The complaint further alleged that the awardees Cirilo V. Garcia and Feliciana Bito are disqualified from purchasing Lot No. 6 because they had earlier purchased a parcel of land formerly belonging to the PHHC, consisting of 1,450 sq. meters, known as Block 12, Lot W-8, covered under TCT No. 31596 of the land records of Quezon City, aside from the fact that they are already owners and possessors of several other lots in Manila and in the suburbs; and that the award to the spouses Cirilo V. Garcia and Feliciana Bito was in violation of the charter provisions of the PHHC. The above allegations likewise establish the ultimate facts that constitute the cause of action of plaintiff (now the appellant), entitling her to the one-half portion of Lot 6. Considering now the cause of action in the first case and the cause of action in the second case, the conclusion is inevitable that one is different from the other; that they are not one and the same cause of action. The first seeks only to remove the cloud on the title of the land. The action is premised on Art. 476, New Civil Code, which provides: "Art. 476. Whenever there is a cloud on title to real property or any interest therein, by reason of any instrument, record, claim, encumbrance or proceeding which is apparently valid or effective but is in truth and in fact invalid, ineffective, voidable, or unenforceable, and may be prejudicial to said title, an action may be brought to remove such cloud or to quiet the title. In the application of the doctrine of res judicata, if it is doubtful whether a second action is for the same cause of action as the first, the test generally applied is to consider the identity of facts essential to their maintenance, or whether the same evidence would sustain both. If the same facts or evidence would sustain both, the two actions are considered the same within the rule that the judgment in the former is a bar to the subsequent action. If, however, the two actions rest upon different states of facts, or if different proofs would be required to sustain the two actions, a judgment in one is no bar to the maintenance of the other. It has been said that this method is the best and most accurate test as to whether a former judgment is a bar in subsequent proceedings between the same parties and it has even been described as infallible.[5] Applying the test accordingly, We hold that the evidence needed to prove the allegations of the second cause of action must necessarily be more than that in the first case for in the herein second case, additional evidence must be adduced to prove that the PHHC acted in violation of its charter; that the PHHC made the award in violation of the presidential directive alleged in plaintiff's "Opposition to Motion and to Reinstate Writ of Preliminary Injunction," evidenced by a letter dated January 12, 1967 of the President of the Philippines to the General Manager of the People's Homesite and Housing Corporation, directing the Board of said corporation to award the lots in the Piñahan Area, Quezon City, to the actual and bona fide occupants thereof;[6] that the awardees have previously purchased another lot from the PHHC and were the owners of several other lots in Manila and Quezon City which disqualified them from acquiring the lot in controversy, evidenced by Annexes A & B.[7] There is merit to the claim of the appellant that the legality of the award and sale of the lot in controversy was not directly litigated in the first case not only because the defendant therein did not appear at the trial to adduce evidence, but also because the PHHC, the grantor and vendor of the property, was not impleaded as a party litigant in the case. "It is also a general rule that a judgment in an action to quiet title is not conclusive as to matters not in issue and determined, particularly where such matters could not have been determined in such action."[8] Since the power or authority of the PHHC was not in issue in the first case to quiet title, and neither was the qualification of the awardee, the plaintiff therein, directly determined, the judgment in said case is not conclusive and binding in the present case for annulment of the award and sale, and the cancellation of the title of the awardee or purchaser. WHEREFORE, the order appealed from issued by the Court of First Instance of Rizal in Civil Case No. Q-11807 dated February 19, 1970 is hereby reversed and the records remanded to the said court for further proceedings. No costs. Petition granted. An action may be brought to prevent a cloud from being cast upon title to real property or any interest therein." The second seeks not only the nullification of the award and sale to the awardee, the cancellation of the Certificate of Title, but also places in issue the power and authority of the grantor (PHHC) to make the award and sell the land to one disqualified to purchase the same, the awardee being a Colonel in the Armed Forces of the Philippines, as admitted by the PHHC.[4] The qualification of the purchaser is likewise placed in issue. These issues are more basic and fundamental than the quieting of the title and the removal of the cloud on such title. SO ORDERED. Makasiar, Muñoz Palma, and Fernandez, JJ., concur. Teehankee, J., (Chairman), in the result. INTRODUCTION TO LAW: CASE DIGESTS URBANA VELASCO AROC VS. PHHC GR L-39674 JANUARY 31, 1978 FACTS: The case at bar in appeal of the decision to the CA the order of the Court of First Instance dismissing on the ground of res judicata the complaint to declare null and void the sale of a certain parcel of land. Appellants are occupants of one-half of a parcel of land. They constructed a house and made some improvements on the land. They later on filed with appellee corporation application for the award and sale of such portion of land. They did this for several times without any action from appellee corporation. They later found out that the parcel of land had been unlawfully and in bad faith awarded and sold to appellee spouses, who according to appellants, are disqualified from purchasing said land since they have prior purchased a land already from appellee corporation together with other properties. Appellants filed a case against the appellee corporation and spouses. In defense of the spouses, they contend that the case should be dismissed due to the ground of res judicata. A case was already decided in their favor, wherein the issue was regarding quieting of title. They contend that appellants are barred by prior judgment. The Court of First Instance dismissed the complaint of the appellants, using the ground raised by the appellees of res judicata. It contended that the prior case had already been final and executory and that there is nothing else for them to do but to dismiss the complaint of the appellant. ISSUE: Whether or not res judicata is applicable in the case at bar? HELD: No, it is not. For the principle of res judicata to apply, four requisites must be present: the former judgment must be final, it must have been rendered by a court with proper jurisdiction over the case, it must be a judgment on the merits, and there must be, between the two cases, identity of parties, subject matter, and cause of action. In this case, it is only with regard to cause of action that the parties disagree. Cause of action is defined to be an act or omission of second party in violation of the legal rights of the other, and its essential elements are legal right of the plaintiff, correlative obligation of the defendant, and act or omission of the defendant in violation of said legal right. In the prior judged case, the cause of action was for the quieting of title or removing the cloud on the title of the land. While in the case at bar, the cause of action was not only to ask for the nullification of the award and sale of the parcel of land but also, it questions the validity of appellee corporation’s award and sale of the parcel of land to the spouses. Given such, the two causes of action are different from one another. In the application of the doctrine of res judicata wherein it is sometimes doubtful whether there are same causes of action, the test normally employed is to consider the identity of the facts or whether the same evidence would sustain both. If the same facts and evidence would sustain both, then the former would be a bar to any subsequent action. Otherwise, there wouldn’t be. And with applying such test, it is found that more evidence is needed to prove the second cause of action. Given aforementioned circumstances, the second cause of action is remanded to the Court of First Instance for further proceedings. INTRODUCTION TO LAW: CASE DIGESTS CAYANA VS. CA GR 125607 MARCH 18, 2004 FACTS: It appears that the petitioners and respondents’ father, with the marital consent of his wife, sold two parcels of land to their son, one of the respondents in this case. At the death of the father, the mother filed an Affidavit of Adverse Claims pertaining to the two parcels of land, alleging that the Deed of Absolute Sale in favor of their son were forgeries. However, later on, she issued an affidavit withdrawing such adverse claims. Later on, together with petitioners of this case and respondent Marceliano, they filed a case against respondent Pastor, for the cancellation of the Deed of Absolute Sale and reconveyance of the two parcels of land. Meanwhile, respondent Pastor entered into an agreement of counter guaranty with respondent corporation using second parcel of land; mortgaged first parcel to respondent bank and sold first parcel of land to a certain Rosafina Reginaldo, who then mortgaged the land to respondent bank. As the civil case against respondents was ongoing, respondents filed an answer but were found to be in default, the court allowed petitioners to file evidence ex parte. The court decided the civil case in favor of petitioners, declaring the deed of absolute sale null and void but denied the prayer for reconveyance saying that the mother was still the owner of the land. No appeal was entered by respondents and the decision was deemed final. The mortgage on the first parcel of land was foreclosed and the bank being the highest bidder, bought the property who then sold it to respondent spouses Marceliano Cayabyab. The respondent spouses M. Cayabyab then sold the land to respondent spouses Ramos. The petitioners filed a verified complaint for the nullification and cancellation of the deeds of absolute sale of the respondents. They asked also for the possession of the 2 parcels of land due to the alleged donation inter vivos of their mother. The trial court decided in favor of the petitioners, part of the decision included the application of res judicata. Respondents appealed this to the CA contending the misuse of res judicata. CA decided in favor of the respondents. It held that res judicata was inapplicable and also, declared the deeds of absolute sale and TCT’s valid. CA mentioned that it was evident that there was an affidavit withdrawing adverse claims over land, that the sale of parcels of land were not simulated and not done in bad faith, and that there was no evidence for the donation inter vivos being alleged by the petitioners. ISSUE: Whether or not the decision on the first civil case constitutes a bar to the defenses and claims of respondents in the second case? HELD: Both the trial court and CA misread the provisions on the effect of judgments or final orders as given by Rules of Civil Procedure: SEC. 47. Effect of judgments or final orders.—The effect of a judgment or final order rendered by a court of the Philippines, having jurisdiction to pronounce the judgment or final order, may be as follows: (a) In case of a judgment or final order against a specific thing, or in respect to the probate of a will, or the administration of the estate of a deceased person, or in respect to the personal, political, or legal condition or status of a particular person or his relationship to another, the judgment or final order is conclusive upon the title to the thing, the will or administration, or the condition, status or relationship of the person; however, the probate of a will or granting of letters of administration shall only be prima facie evidence of the death of the testator or intestate; (b) In other cases, the judgment or final order is, with respect to the matter directly adjudged or as to any other matter that could have been raised in relation thereto, conclusive between the parties and their successors in interest by title subsequent to the commencement to the action or special proceeding, litigating for the same thing and under the same title and in the same capacity; (c) In any other litigation between the same parties or their successors in interest, that only is deemed to have been adjudged in a former judgment or final order which appears upon its face to have been so adjudged, or which was actually and necessarily included therein or necessarily thereto. Res judicata and the bar of prior judgment is not applicable to this case since the requisites for these two to apply are not present. There is ‘bar by prior judgment’ when, between the first case where the judgment was rendered and the second case which is sought to be barred, there is identity of parties, subject matter and cause of action. The judgment in the first case constitutes an absolute bar to the subsequent action. It is final as to the claim or demand in controversy, including the parties and those in privity with them, not only as to every matter which was offered and received to sustain or defeat the claim or demand, but as to any other admissible matter which might have been offered for that purpose and of all matters that could have been adjudged in that case. But where between the first and second cases, there is identity of parties but no identity of cause of action, the first judgment is conclusive in the second case, only as to those matters actually and directly controverted and determined and not as to matters merely involved therein. For res judicata to apply, there must be (1) a former final judgment rendered on the merits; (2) the court must have had jurisdiction over the subject matter and the parties; and, (3) identity of parties, subject matter and cause of action between the first and second actions. According to the appellate court, the third requisite for the application of res judicata is not present in this case. The doctrine that should have been followed in this case is conclusiveness of judgment--a fact or question which was in issue in a former suit and there was judicially passed upon and determined by a court of competent jurisdiction, is conclusively settled by the judgment therein as far as the parties to that action and persons in privity with them are concerned and cannot be again litigated in any future action between such parties or their privies, in the same court or any other court of concurrent jurisdiction on either the same or different cause of action, while the judgment remains unreversed by proper authority. The decision of the trial court, which was final, declaring the deeds of absolute sale null and void, precluded the CA from further adjudicating the validity of the deeds and titles. ARTICLE VIII - JUDICIAL DEPARTMENT OPOSA VS FACTORAN, JR (GR NO 101083, JULY 30,1993) DAVIDE, JR., J. FACTS: Petitioners instituted a taxpayers‘ class suit against the Honorable Fulgencio S. Factoran, Jr., then DENR Secretary, alleging that as citizens and taxpayers of the Republic of the Philippines, they are ―entitled to the full benefit, use and enjoyment of the natural resource treasure that is the country's virgin tropical forests." The complaint starts off with the general averments that the Philippine archipelago of 7,100 islands has a land area of 30M hectares and is endowed with rich, lush and verdant rainforests in which varied, rare and unique species of flora and fauna may be found; these rainforests contain a genetic, biological and chemical pool which is irreplaceable; they are also the habitat of indigenous Philippine cultures which have existed, endured and flourished since time immemorial; scientific evidence reveals that in order to maintain a balanced and healthful ecology, the country's land area should be utilized on the basis of a ratio of 54% for forest cover and 46% for agricultural, residential, industrial, commercial and other uses; the distortion and disturbance of this balance as a consequence of deforestation have resulted in a host of environmental tragedies. Factoran moved to Dismiss the complaint based on two grounds, namely: (1) the plaintiffs have no cause of action against him and (2) the issue raised by the plaintiffs is a political question which properly pertains to the legislative or executive branches of Government. Respondent granted the motion. Hence, the instant petition. ISSUES: (1) Whether or not the petitioners have a cause of action against the respondent; and (2) Whether or not the issue raised is a political question which properly pertains to the legislative or executive branches of Government. HELD: (1) Petitioners minors assert that they represent their generation as well as generations yet unborn. We find no difficulty in ruling that they can, for themselves, for others of their generation and for the succeeding generations, file a class suit. Their personality to sue in behalf of the succeeding generations can only be based on the concept of intergenerational responsibility insofar as the right to a balanced and healthful ecology is concerned. Such a right, as hereinafter expounded, considers the "rhythm and harmony of nature." Nature means the created world in its entirety. Such rhythm and harmony indispensably include, inter alia, the judicious disposition, utilization, management, renewal and conservation of the country's forest, mineral, land, waters, fisheries, wildlife, off-shore areas and other natural resources to the end that their exploration, development and utilization be equitably accessible to the present as well as future generations. Needless to say, every generation has a responsibility to the next to preserve that rhythm and harmony for the full enjoyment of a balanced and healthful ecology. Put a little differently, the minors' assertion of their right to a sound environment constitutes, at the same time, the performance of their obligation to ensure the protection of that right for the generations to come. (2) After careful examination of the petitioners' complaint, We find the statements under the introductory affirmative allegations, as well as the specific averments under the sub-heading CAUSE OF ACTION, to be adequate enough to show, prima facie, the claimed violation of their rights. On the basis thereof, they may thus be granted, wholly or partly, the reliefs prayed for. It bears stressing, however, that insofar as the cancellation of the TLAs is concerned, there is the need to implead, as party defendants, the grantees thereof for they are indispensable parties. The foregoing considered, Civil Case No. 90-777 be said to raise a political question. Policy formulation or determination by the executive or legislative branches of Government is not squarely put in issue. What is principally involved is the enforcement of a right vis-a-vis policies already formulated and expressed in legislation. It must, nonetheless, be emphasized that the political question doctrine is no longer, the insurmountable obstacle to the exercise of judicial power or the impenetrable shield that protects executive and legislative actions from judicial inquiry or review. THE DOCTRINE OF STATE IMMUNITY THE HOLY SEE VS. DEL ROSARIO JR 238 SCRA 524 (1994) FACTS: Lot 5-A is registered under the name of the petitioner The Holy See. This lot is contiguous to lots 5-B and 5-D registered in the name of Philippine Realty Corporation (PRC). These three lots were sold through an agent Msgr. Domingo Cirilos Jr. to Ramon Licup. Licup assigned his rights to private respondent Starbright Sales Ent. Inc. (SSEI). Due to refusal of the squatters to vacate the lots, a dispute arose as to who of the parties has the responsibility of eviction and clearing the land. SSEI insists that petitioner should clear the property of the squatters. Petitioner refused and proposed that either SSEI undertake the eviction or that the earnest money be returned. Msgr. Cirilos returned the P100,000.00 earnest money, and the property was sold to Tropicana Properties and Development Corporation (Tropicana). SSEI filed suit for annulment of sale, specific performance and damages against Msgr. Cirilos, PRC, and Tropicana. The petitioner and Msgr. Cirilos moved to dismiss for lack of jurisdiction based on sovereign immunity from suit. It was denied on the ground that petitioner ―shed off its sovereign immunity by entering into the business contract‖ in question. A motion for reconsideration was also denied. Hence, this special civil action for certiorari. ISSUE: Did the Holy See properly invoke sovereign immunity for its nonsuability? HELD: YES. In the case at bar, lot 5-A was acquired as a donation from the archdiocese of Manila for the site of its mission or the Apostolic Nuniciature in the Philippines. The subsequent disposal was made because the squatters living thereon made it impossible for petitioner to use it for the purpose of the donation. Petitioner did not sell lot 5-A for profit or gain. There are two conflicting concepts of sovereign immunity, each widely held and firmly established. According to the classical or absolute theory, a sovereign cannot, without its consent, be made a respondent in the courts of another sovereign. According to the newer or restrictive theory, the immunity of the sovereign is recognized only with regard to public acts or acts jure imperii of a state, but not with regard to private acts or acts jure gestionis (United States of America v. Ruiz, 136 SCRA 487 [1987]; Coquia and Defensor-Santiago, Public International Law 194 [1984]). The restrictive theory, which is intended to be a solution to the host of problems involving the issue of sovereign immunity, has created problems of its own. Legal treatises and the decisions in countries which follow the restrictive theory have difficulty in characterizing whether a contract of a sovereign state with a private party is an act jure gestionis or an act jure imperii. The restrictive theory came about because of the entry of sovereign states into purely commercial activities remotely connected with the discharge of governmental functions. This is particularly true with respect to the Communist states which took control of nationalized business activities and international trading. This Court has considered the following transactions by a foreign state with private parties as acts jure imperii: (1) the lease by a foreign government of apartment buildings for use of its military officers (Syquia v. Lopez, 84 Phil. 312 [1949]; (2) the conduct of public bidding for the repair of a wharf at a United States Naval Station (United States of America v. Ruiz, supra.); and (3) the change of employment status of base employees (Sanders v. Veridiano, 162 SCRA 88 [1988]). On the other hand, this Court has considered the following transactions by a foreign state with private parties as acts jure gestionis: (1) the hiring of a cook in the recreation center, consisting of three restaurants, a cafeteria, a bakery, a store, and a coffee and pastry shop at the John Hay Air Station in Baguio City, to cater to American servicemen and the general public (United States of America v. Rodrigo, 182 SCRA 644 [1990]); and (2) the bidding for the operation of barber shops in Clark Air Base in Angeles City (United States of America v. Guinto, 182 SCRA 644 [1990]). The operation of the restaurants and other facilities open to the general public is undoubtedly for profit as a commercial and not a governmental activity. By entering into the employment contract with the cook in the discharge of its proprietary function, the United States government impliedly divested itself of its sovereign immunity from suit. In the absence of legislation defining what activities and transactions shall be considered "commercial" and as constituting acts jure gestionis, we have to come out with our own guidelines, tentative they may be. Certainly, the mere entering into a contract by a foreign state with a private party cannot be the ultimate test. Such an act can only be the start of the inquiry. The logical question is whether the foreign state is engaged in the activity in the regular course of business. If the foreign state is not engaged regularly in a business or trade, the particular act or transaction must then be tested by its nature. If the act is in pursuit of a sovereign activity, or an incident thereof, then it is an act jure imperii, especially when it is not undertaken for gain or profit. As held in United States of America v. Guinto, (supra): "There is no question that the United States of America, like any other state, will be deemed to have impliedly waived its non-suability if it has entered into a contract in its proprietary or private capacity. It is only when the contract involves its sovereign or governmental capacity that no such waiver may be implied." In the case at bench, if petitioner has bought and sold lands in the ordinary course of a real estate business, surely the said transaction can be categorized as an act jure gestionis. However, petitioner has denied that the acquisition and subsequent disposal of Lot 5-A were made for profit but claimed that it acquired said property for the site of its mission or the Apostolic Nunciature in the Philippines. Private respondent failed to dispute said claim. Under Art.31(A) of the 1961 Vienna Convention on Diplomatic Relations, a diplomatic envoy is granted immunity from the civil and administrative jurisdiction of the receiving state over any real action relating to private immovable property situated in the territory of the receiving state which the envoy holds on behalf of the sending state for the purposes of the mission. If this immunity is provided for a diplomatic envoy with all the more reason should immunity be recognized as regards the sovereign itself, which in this case is the Holy See. Moreover the Department of the Foreign Affairs has formally intervened and officially certified that the Embassy of the Holy See is a duly accredited diplomatic missionary to the Republic of the Philippines and as such is exempt from local jurisdiction and entitled to all the rights, privileges and immunities of a diplomatic mission or embassy in this court. The determination of the executive arm of the government that a state or instrumentality is entitled to sovereign or diplomatic immunity is a political question that is conclusive upon the courts. Where the plea of immunity is reacquired and affirmed by the executive branch, it is the duty of the courts to accept this claim so as not to embarrass the executive arm of the government in conducting the country‘s foreign relations.