ESPIRITU vs. LAZARO

G.R. No. 181020          November 25, 2009

FACTS:

Petitioners Espiritu filed a complaint for recovery of personal property with damages and preliminary attachment against respondents Lazaro and Sison among others, involving the alleged dollar time deposit accounts left by the late Porfirio Lazaro. The trial court granted the prayer for preliminary attachment. Respondents' motion to discharge the attachment and the two motions to dismiss were dismissed. Respondent Sison filed her answer with Counterclaim and crossclaim. Lazaro filed a Cautionary Answer with Manifestation and a Motion to File a Supplemental/Amended Answer.


On Aug. 2002, petitioners received a copy of the cautionary answer. On July 2003, the trial court dismissed the complaint due to petitioners’ failure to prosecute for an unreasonable length of time. CA affirmed the dismissal of the case.

ISSUE:

Whether or not the trial court's dismissal of the case is proper.

RULING:

Yes. Section 1 of Rule 18 of the Rules of Court imposes upon the plaintiff the duty to set the case for pre-trial after the last pleading is served and filed. Under Section 3 of Rule 17, failure to comply with the said duty makes the case susceptible to dismissal for failure to prosecute for an unreasonable length of time or failure to comply with the rules.

In every action, the plaintiffs are duty-bound to prosecute their case with utmost diligence and with reasonable dispatch to enable them to obtain the relief prayed for and, at the same time, to minimize the clogging of the court dockets.

It bears stressing that the sanction of dismissal may be imposed even absent any allegation and proof of the plaintiff’s lack of interest to prosecute the action, or of any prejudice to the defendant resulting from the failure of the plaintiff to comply with the rules. The failure of the plaintiff to prosecute the action without any justifiable cause within a reasonable period of time will give rise to the presumption that he is no longer interested in obtaining the relief prayed for.

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PACIFICO CRUZ vs. SANDIGANBAYAN

G.R. Nos. 174599-609          February 12, 2010

FACTS:

Diamond Knitting Corporation (DKC) terminated its operations in 1993 but was still issued tax credit certificates (TCCs) from 1994 to 1997. DKC then sold a number of these TCCs to Pilipinas Shell who then used it to pay off its excise tax obligations to the BIR. Upon investigation, a presidential task force found irregularities and filed a complaint for plunder against petitioner Cruz who is the General Manager of Pilipinas Shell’s Treasury and Taxation Department, and certain government officials before the Ombudsman (OMB).

In 2002, the OMB dropped the plunder case but charged the petitioner for multiple violations of the Anti-Graft and Corrupt Practices Act before the Sandiganbayan. After the reinvestigation however, OMB resolved to drop the charges against the petitioners for lack of evidence. The Office of the State Prosecutor (OSP) filed a motion before the Sandiganbayan to drop Cruz from the informations, however, this motion was not acted on. Instead, Sandiganbayan granted OSP's subsequent motion to defer action on the withdrawal of charges against the petitioner.

Meanwhile, on December 21, 2007, the Supreme Court rendered judgment in Pilipinas Shell Petroleum Corporation v. Commissioner of Internal Revenue finding that Pilipinas Shell was a transferee in good faith and for value and may thus not be unjustly prejudiced by the transferor’s fraud committed in procuring the transfer of those TCCs.

ISSUE:

Whether or not the ruling in the Pilipinas Shell Petroleum Corporation v. Commissioner of Internal Revenue bar the prosecution of Cruz in the criminal cases

RULING:

Yes. Conclusiveness of judgment ordains that issues actually and directly resolved in a former suit cannot be raised anew in any future case involving the same parties although for a different cause of action. Where the rule applies, there must be identity of issues but not necessarily identity in causes of action. 

The parties in the tax case and in the criminal cases are substantially the same. The ultimate complainant in the criminal case—the party that suffered the injury—was the government, represented by the Commissioner of Internal Revenue. The latter also represented the government in the tax case against Pilipinas Shell. Petitioner Cruz, on the other hand, represented Pilipinas Shell in all the transactions in question. The parties in the tax case and in the criminal cases represent substantially identical interests. The principle of res judicata through conclusiveness of judgment applies to bar the criminal actions against Cruz.

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Spouses NOCEDA vs. DIRECTO

G.R. No. 178495          July 26, 2010

FACTS:

Sometime in 1986, respondent Aurora Arbizo-Directo filed a complaint against her nephew, petitioner Rodolfo Noceda, for "Recovery of Possession and Ownership and Rescission/Annulment of Donation." She donated a portion of her hereditary share to her nephew, but the latter occupied a bigger area, claiming ownership thereof since September 1985. Judgment was rendered in favor of the respondent on November 1991. On appeal, CA still ruled in favor of the respondent. Spouses Noceda elevated the case to the Supreme Court but their petition was denied. A writ of execution was issued against the petitioners on March 2001.

Petitioners Noceda then instituted an action for quieting of title against Directo. In the complaint, petitioners admitted that previous case was decided in favor of respondent and a writ of execution had been issued, ordering them to vacate the property. However, petitioners claimed that the land, which was the subject matter of the previous case, was the same parcel of land owned by spouses Dahipon from whom they purchased a portion; and that a title was issued in their name. Respondent moved to dismiss the case on the ground of res judicata but her motion was denied for lack of identity of causes of action. During the trial, respondent filed a Demurrer to Evidence, stating that the claim of ownership and possession of petitioners on the basis of the title emanating from that of Dahipon was already raised in the previous case. The trial court granted the demurrer which was affirmed by the CA.

ISSUE:

Whether or not the principle of res judicata is applicable in this case.

RULING:

Yes. Under Sec. 47 of Rule 39 of the Rules of Court, there are two main rules mark the distinction between the principles governing the two typical cases in which a judgment may operate as evidence. The first general rule embodied in paragraph (b) is referred to as "bar by former judgment"; while the second general rule, which is embodied in paragraph (c) of the same section and rule, is known as "conclusiveness of judgment." Bar by former judgment bars the prosecution of a second action upon the same claim, demand, or cause of action, while conclusiveness of judgment bars the re-litigation of particular facts or issues in another litigation between the same parties on a different claim or cause of action.

In the previous case, it has been established that petitioners have no right of ownership or possession over the land in question. Under the principle of conclusiveness of judgment, such material fact becomes binding and conclusive on the parties. When a right or fact has been judicially tried and determined by a court of competent jurisdiction, or when an opportunity for such trial has been given, the judgment of the court, as long as it remains unreversed, should be conclusive upon the parties and those in privity with them.

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THE HONGKONG & SHANGHAI BANKING CORP. vs. ALDECOA & CO.

G.R. No. L-8437          March 23, 1915

FACTS:

Aldecoa and Co. obtained a credit worth P450,000 from HSBC secured by a mortgage of shares and real properties. On Dec. of 1906, the firm of Aldecoa and Co. went into liquidation and obtained another P50,000 from the bank upon the condition that this would be covered by the previous mortgage. In October 1908, Joaquin and Zoilo Ibañez de Aldecoa filed an action against the bank for the purpose of annulling the mortgages executed by them on the grounds that they were minors at the time incapable of creating a valid mortgage upon their real property. The Court of First Instance dismissed the complaint as to Joaquin upon the ground that he had ratified those mortgages after becoming of age, but entered a judgment annulling said mortgages with respect to Zoilo. Both parties appealed from this decision and the case was still pending in the Supreme Court when HSBC filed an action against Aldecoa and Co. and its partners for the collection of a sum of money and foreclosure of the mortgaged properties. Judgement was entered in favor of the bank.

ISSUE:

Whether or not the action filed by the bank should be dismissed on the ground of lis pendens.

RULING:

No. 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. 

In the instant case, the former suit is to annul the mortgages while the other one is for the foreclosure. 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 a valid decree will not prevent the bank from foreclosing them. 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.

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DOTMATRIX TRADING vs. LEGASPI

G.R. No. 155622          October 26, 2009

FACTS:

Dotmatrix Trading, petitioners, are engaged in the business of buying and selling of commodities, including day-old chicks. Respondent, Rommel B. Legaspi was the petitioners’ supplier of day-old chicks from September to December 2001. Sometime in 2002, the respondent sent a demand letter to the petitioners for the payment of delivered day-old chicks. Petitioners replied with a demand for delivery of an alleged deficiency or return of the over-payment made. Failing to satisfy each other's demands, both parties went to court.

On June 11, 2002, Dotmatrix Trading filed a complaint against the respondent before RTC-Tarlac for the return of the over-payment made, plus damages. On June 19, 2002, Legaspi filed before RTC-Malolos a complaint for the collection of balance and damages against the petitioners.

Upon receipt of the summons and complaint, the respondent filed a motion to dismiss the case before RTC-Tarlac on the ground of litis pendentia. RTC-Tarlac granted the motion to dismiss. Petitioners elevated the case to the SC on a pure question of law.

ISSUE:

Whether or not the case before RTC-Tarlac - filed ahead of the case before RTC-Malolos - should be dismissed on the ground of litis pendentia.

RULING:

SC dismissed the petition. 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. 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.

SC held further that the case before RTC-Malolos is the appropriate case to determine the rights of the parties. The case in Tarlac is purely preemptive. Another compelling reason is the stage of the case. Trial on the merits has already been conducted in the case before RTC-Malolos, with the petitioners given the full opportunity to present evidence on their defense. To dismiss it at this point would result in needless delay in the resolution of the parties’ dispute and bring them back to square one.

The elements of litis pendentia (pending suit) are:

1. The parties in the two actions are the same. 
2. There is a substantial identity in the causes of action and in the reliefs sought.
3. Any judgment that may be rendered in one case, regardless of which party is successful, would amount to res judicata in the other.

In ascending order of importance, these are considered in determining which action should prevail:

1. The date of filing, with preference generally given to the first action filed to be retained.
2. 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. 
3. The action is the appropriate vehicle for litigating the issues between the parties.

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