Republic of the PhilippinesSUPREME COURT

Manila

THIRD DIVISION

G.R. No. L-45107 November 11, 1991

BENEDICTO RAMOS, petitioner, vs.HON. ELVIRO L. PERALTA, Presiding Judge, Branch XVII, Court of First Instance of Manila, SPOUSES JUVENCIO ORTANEZ and JULIANA S. ORTANEZ, MINDANAO INSURANCE CO., INC. and P. R. ROMAN, INC.,respondents.

Angel Suntay, Jr. and Renato M. Coronado for petitioner.

Tolentino, Garcia, Cruz & Reyes for respondents Ortanez.

 

FERNAN, C.J.:p

Put in issue in this petition for review on certiorari is the propriety of the dismissal by the then Court of First Instance of (CFI) of Manila, Branch XVII of petitioner's action for consignation of the sum of P70,000.00 representing advance rentals for the 101-hectare Salgado fishpond located in Bo. Balut, Pilar, Bataan.

Petitioner started occupying the Salgado fishpond in 1964 by virtue of a lease contract executed in his favor by private respondents spouses Juvencio and Juliana Ortanez. The original lease for a term of five (5) years from January 1, 1964 to January 1, 1990, was renewed several times, the last renewal being on June 28, 1974 under a "Kasunduan sa Pag-upa" for a period of three (3) years starting January 1, 1975 to December 31, 1977.

Unknown to petitioner, title 1 to said property was in the name of Philippine International Surety Co., Inc., a corporation founded, organized and 99.5%-owned by the Salgado spouses. Later renamed Mindanao Insurance Co., Inc., 2 said corporation was placed under receivership and liquidation on June 20, 1968 in Civil Case No. Q-10664 of the then CFI of Rizal, Branch IV, Quezon City, upon application of Insurance Commissioner Gregoria Cruz-Ansaldo who was appointed receiver.

Thereafter on February 23, 1976, respondent P. R. Roman, Inc. purchased from Mindanao Insurance the Salgado fishpond for P950,000.00. The deed of sale was signed by the receiver and duly approved by the liquidation court.

Apparently due to this development, the spouses Ortanez refused to accept from petitioner the advance rentals on the fishpond due on March 15, 1976 in the amount of P30,000.00.

On or about May 1, 1976, petitioner received a letter from Don Pablo R. Roman informing him of the latter's acquisition of the fishpond and intention to take possession thereof on May 16, 1976. In his letter-reply, petitioner reminded Mr. Roman of his lease contract over the fishpond and refused to consent to the intended take over. Notwithstanding petitioner's objection, P. R. Roman, Inc. took over possession of the fishpond.

On August 2, 1976, petitioner filed before the CFI of Manila the aforesaid complaint, docketed as Civil Case No. 103647, 3against private respondents Juvencio and Juliana Ortanez, Mindanao Insurance and P. R. Roman, Inc. for consignation of the sum of P70,000.00 representing advance rentals on the fishpond in the amounts of P30,000.00 and P40,000.00 respectively due on March 15, 1976 and June 15, 1976, which he had previously tendered to, but refused by the spouses Ortanez and Pablo Roman.

P. R. Roman, Inc. filed a motion to dismiss on the grounds that venue was improperly laid, the complaint states no cause of action and the court has no jurisdiction over the subject of the action or suit. In its motion to dismiss, P. R. Roman, Inc. cited the pendency before the then CFI of Bataan of Civil Case No 4102 instituted by P.R. Roman, Inc. against petitioner Benedicto Ramos on August 13, 1976 to quiet its title over the Salgado fishpond.

On August 27, 1976, respondent CFI of Manila issued an order 4 dismissing Civil Case No. 103647, stating in part:

Without discussing in detail the grounds mentioned above, the Court really sees that this case should be dismissed not only insofar as against P. R. Roman, Inc. but also as against the other defendants mentioned above for the reason, principally, that there is already a case pending between the same parties and for the same cause in Civil Case No. 4102 of Branch II of the Court of First Instance of Bataan, entitled P. R. Roman, Inc. vs. Benedicto Roman, which is precisely for the ownership of the subject matter of the property allegedly leased to the plaintiff herein (Exhibit "A"-Motion). In the said case, the defendant therein, Benedicto Ramos, who is the plaintiff in the case at bar, filed a motion for leave to file a third-party complaint against the spouses surnamed Ortanez and the Mindanao Insurance Company Inc. All the issues respecting the fishpond, including the lease contract, are necessarily involved in the case pending now in Bataan. Aside from the above, the Court cannot decide this case because it cannot pre-empt the Court of Bataan on whether or nor the P. R. Roman, Inc. is already the owner because if it finds that the said defendant P. R. Roman, Inc. is really the owner of the fishpond, there is no more lease for which rentals are to be paid.

Petitioner moved for reconsideration, but was unsuccessful, the court a quo, standing "pat on its previous order and reiterat(ing) its dismissal of the case, without costs." 5

Hence this petition anchored on the following ascribed errors of law: 6

1. The respondent court erred in not holding that the only issue in consignation of funds is whether the defendant is willing to accept the proffered payment or not.

2. The respondent court erred in not holding that the prerogative of choosing the proper venue belongs to the plaintiff.

3. The respondent court erred in holding that the subsequent filing of Civil Case No. 4102 before the Court of First Instance of Bataan is a bar to the prosecution of Civil Case No. 103647 before it.

Petitioner contends that the Bataan quieting-of-title Civil Case No. 4102 cannot serve as a bar to his Manila consignation Civil Case No. 103647 because they involve different issues. Civil Case No. 4102 deals with the question of ownership while the only issue involved in his consignation case is whether or not the defendant is willing to accept the proffered payment. In fact, petitioner posits, the action to quiet title is a useless futile exercise as he does not question P. R. Roman Inc.'s ownership of the fishpond under consideration, but merely wishes to assert his leasehold and possessory rights

over said property under the "Kasunduan sa Pag-upa." He further contends that compelling him to litigate before the Bataan court would render nugatory his right as a plaintiff to choose the venue of his action. Besides, Civil Case No. 103647 was filed on August 2, 1976, ahead of Civil Case No. 4102 which was filed on a much later date, August 13, 1976, after the Manila CFI had already acquired jurisdiction over Civil Case No. 103647.

Private respondents counter that the view taken by petitioner of the Manila consignation case is quite limited and bookish, because while it may be true that theoretically, the main issue involved in a consignation case is whether or not the defendant is willing to accept the proffered payment, in the consignation case brought by petitioner, other issues were pleaded by petitioner himself, such as the validity and binding effect of the lease contract and the existence of the supposed obligor-obligee relationship. They further contend that a plaintiffs right of choice of venue is not absolute, but must invariably how to the dismissal of the case because of litis pendentia which, in refutation of petitioner's argument, does not require that there is a prior pending action, merely that there is a pending action.

We find for respondents.

Under the rules and jurisprudence, for litis pendentia to be invoked as a ground for the dismissal of an action, 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 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 judicata  in the other. 7

These requisites are present in the case at bar. It is worthwhile mentioning that in his basic petition for review, one of the assigned errors of petitioner is that the respondent court erred in not holding that the parties in Civil Case No. 4102 are not the same as the parties in Civil Case No. 103647. 8 However, in his brief, no further mention of this assigned error was made; a clear indication of petitioner's admission of the identity of parties in Civil Case No. 4102 and Civil Case No. 103647, particularly as he filed a third party complaint in Civil Case No. 4102 against the spouses Ortanez and Mindanao Insurance.

Anent the second element, we agree with private respondents' observation that petitioner's approach to his consignation case is quite constricted. His contention that the only issue in a consignation case is whether or not the defendant is willing to accept the proffered payment is true only where there is no controversy with respect to the obligation sought to be discharged by such payment. His consignation case, however, is not as simple. While ostensibly, the immediate relief sought for in his consignation case is to compel therein defendants to accept his advance rentals, the ultimate purpose of such action is to compel the new owner of the fishpond to recognize his leasehold rights and right of occupation. In the last analysis, therefore, the issue involved in Civil Case No. 103647 is the right of possession over the fishpond intertwined with the validity and effectivity of the lease contract.

This is the same issue involved in Civil Case No. 4102. Although an action for quieting of title refers to ownership, P. R. Roman, Inc. in its complaint 9 in Civil Case No. 4102 alleged:

5. There is a cloud on the aforesaid titles of plaintiff on the said agricultural land, marked Annexes "A", "B" and "C" hereof, as well as on its right of possession over that real property by reason of a certain "Kasunduan sa Pagupa" (Contract of Lease) dated June 28, 1974 executed by and between the spouses Jovencio Ortanez and Juliana S. Ortanez purportedly as "may-ari/Nagpapaupa" (owner/lessor) and the defendant as lessee, which instrument is apparently valid or effective but in truth and

in fact invalid, ineffective, voidable or unenforceable, and is prejudicial to the said titles of plaintiff as well as to its right of possession over the same fishpond/agricultural land in Barrio Balut, Pilar, Bataan.

Thus, while the respondent court in the assailed order of dismissal dated August 27, 1976 described Civil Case No. 4102 as "precisely for the ownership of the subject matter of the property allegedly leased to the plaintiff herein," 10 its order dated October 22, 1976 denying petitioner's motion for reconsideration, more perceptively stated: 11

In Civil Case No. 4102 of the Court of First Instance of Bataan, entitled P. R. Roman, Inc. vs. Benedicto Ramos one of the principal issues is the possession of the fishpond subject matter of the lease supposed rents of which are supposed to be consignated in the instant case, plaintiff P. R. Roman, Inc. there, claiming to be entitled to the possession of said property as owner under a certificate of title and defendant Benedicto Ramos, plaintiff here, anchoring his claim of possession upon his lease with the Ortanez spouses against whom, on his motion, he filed a third party complaint in which he prayed in the alternative, that should he lose possession of the fishpond in favor of P. R. Roman, Inc., the Ortanezes should be condemned to reimburse him the rentals he has already paid for the unexpired portion of the lease. The issue of whether or not the lease subsists even as regards P. R. Roman, Inc., for it is the view of Ramos that it bought the property with knowledge of the lease, is squarely planted in the case before the Court of First Instance of Bataan, and, consequently, the more appropriate court with which rents are to be consignated. . . .

That whatever decision may be handed down in Civil Case No. 4102 would constitute res judicata in Civil Case No. 103647 is beyond cavil. Should the Bataan court rule that the lease contract is valid and effective against P. R. Roman, Inc., the petitioner can compel it to accept his proffered payment of rentals; otherwise, he may not do so.

Petitioner next contends that the dismissal of Civil Case No. 103647 deprived him of his right to choose the venue of his action. Verily, the rules on the venue of personal actions are laid down generally for the convenience of the plaintiff and his witnesses. But, as observed by private respondents, this right given to the plaintiff is not immutable. It must yield to the greater interest of the orderly administration of justice, which as in this case, may call for the dismissal of an action on the basis of litis pendentia to obviate the possibility of conflicting decisions being rendered by two different courts. 12

As private respondents would put it, "(T)he Rules of Court are not perfect. It does not pretend to be able to make everyone happy simultaneously or consecutively or all the time. Even the Rules of Court has hierarchy of values; thus, the choice of venue may bow to dismissal of the case because of litis pendentia. 13 At any rate, petitioner cannot complain of any inconvenience arising from the dismissal of Civil Case No. 103647. Being the defendant in Civil Case No. 4102, he cannot but litigate before the Bataan court, and bringing his consignation case before the same court would actually save him time, effort and litigation expenses.

Finally, the rule on litis pendentia does not require that the later case should yield to the earlier case. What is required merely is that there be another pending action, not a prior pending action. Considering the broader scope of inquiry involved in Civil Case No. 4102 and the location of the property involved, no error was committed by the lower court in deferring to the Bataan court's jurisdiction.

WHEREFORE, the assailed decision dated August 27, 1976 of the then Court of First Instance of Manila, Branch XVII, is AFFIRMED in toto. This decision is immediately executory, with costs against petitioner.

SO ORDERED.

Gutierrez, Jr., Bidin, Davide, Jr. and Romero, JJ., concur.

Republic of the PhilippinesSUPREME COURT

Manila

G.R. No. L-30523 April 22, 1977

LEE BUN TING and ANG CHIA petitioners, vs.HON. JOSE A. ALIGAEN Judge of the Court of First Instance, of Capiz, 11th Judicial District, Branch II; ATTY. ANTONIO D. AMOSIN, as court-appointed Receiver; RAFAEL A. DINGLASAN, FRANCISCO A. DINGLASAN, CARMEN A. DINGLASAN, RAMON A. DINGLASAN, LOURDES A. DINGLASAN, MERCEDES A. DINGLASAN, CONCEPCION A, DINGLASAN, MARIANO A. DINGLASAN, JOSE A. DINGLASAN, LORETO A. DINGLASAN, RIZAL A. DINGLASAN, JIMMY DINGLASAN, and JESSE DINGLASAN, respondents.

Norberto J Quisumbing and Humberto V. Quisumbing for petitioners.

Rafael A. Dinglasan for respondents.

 

ANTONIO, J.:

Petition for certiorari to annul the Orders of respondent court dated October 10, 1968 and November 10, 1968 and other related Orders in Civil Case No. V-3064, entitled Rafael A. Dinglasan, et al., vs. Lee Bun Ting, et al., with prayer for the issuance of writ of preliminary injunction. The antecedent facts are as follows:

On June 27, 1956, this Court rendered judgment in G. R. No. L-5996, entitled Rafael Dinglasan, et al. vs. Lee Bun Ting, et al.,  1 In that case, We found that:

In the month of March, 1936, petitioners-appellants sold to Lee Liong, a Chinese citizen, predecessor in interest of respondents-appellees, a parcel of land situated on the corner of Roxas Avenue and Pavia Street, Capiz (now Roxas City), Capiz, designated as lot 398 and covered by Original Certificate of Title No. 3389. The cost was P6,000.00 and soon after the sale Lee Liong constructed thereon a concrete building which he used as a place for his lumber business and in part as residence for himself and family. Petitioners had contended that the sale was a conditional sale, or one with the right of repurchase during the last years of a ten-year period, but the trial court and the Court of Appeals found that the sale was an absolute one. Another contention of the petitioners-appellants is that the sale is null and void as it was made in violation of the provision contained in the Constitution (Article XIII, section 5), but the Court of Appeals found that the purchaser was not aware of the constitutional prohibition while petitioners-appellants were because the negotiations for the sale were conducted with the knowledge and direct intervention of Judge Rafael Dinglasan, one of the plaintiffs, who was at that time an assistant attorney in the Department of Justice. ... (P. 42-Q)

In reply to the contention of appellants therein that as the sale to Lee Liong is prohibited by the Constitution, title to the land did not pass to said alien because the sale did not produce any juridical effect in his favor, and that the constitutional prohibition should be deemed self-executing in character in order to give effect to the constitutional mandate, this Court said:

... In answer we state that granting the sale to be null and void and can not give title to the vendee, it does not n necessarily follow therefrom that the title remained in the vendor, who had also violated the constitutional prohibition, or that he (vendor) has the right to recover the title of which he has divested himself by his act in ignoring the prohibition. In such contingency another principle of law sets in to bar to equally guilty vendor from recovering the title which he had voluntarily conveyed for a consideration, that of pan delicto We have applied this principle as a bar to the present action in a series of cases thus:

xxx xxx xxx

We can, therefore, say that even if the plaintiffs can still invoke the Constitution, or the doctrine in the Krivenko case, to set aside the sale in question, they are now prevented from doing so if their purpose is to recover the lands that they have voluntarily parted with, because of their guilty knowledge that what they were doing was in violation of the Constitution. They cannot escape the law. As this Court well said: A party to an illegal contract cannot come into a court of law and ask to have his illegal objects carried out. The law will not aid either party to an illegal agreement; it leaves the parties where it finds them. The rule is expressed in the maxims: Ex dolo malo non oritur actio and In pari delicto potior eat conditio defendentis ....

It is not necessary for us to re-examine the doctrine laid down by us in the above cases. We must add in justification of the adoption of the doctrine that the scope of our power and authority is to interpret the law merely, leaving to the proper coordinate body the function of laying down the policy that should be followed in relation to conveyances in violation of the constitutional prohibition and in implementing said policy. The situation of these prohibited conveyances is not different from that of homestead sold within five yearn from and after the issuance of the patent, (Section 118, C.A. 141, otherwise known as the Public Land Law), for which situation the legislature has adopted the policy, not of returning the homestead sold to the original homesteader but of forfeiting the homestead and returning it to the public domain again subject to disposition in accordance with law. (Section 124, Id.)

The doctrine of in pari delicto bars petitioners-appellants from recovering the title to the property in question and renders unnecessary the consideration of the other arguments presented in appellants brief.

There is one other cause why petitioner' remedy cannot be entertained, that is the prescription of the action. As the sale occurred in March, 1936, more than ten years had already elapsed from the time the cause of action accrued when the action was filed (1948). (pp. 431-432)

Noting the absence of policy governing lands sold to aliens in violation of the constitutional prohibition, We further said:

We take this occasion to call the attention of the legislature to the absence of a law or policy on sales in violation of the Constitution; this Court would have filled the void were we not aware of the fact that the matter falls beyond the scope of oar authority and properly belongs to a co-ordinate power. (P. 432)

Accordingly, the petition in the foregoing case was denied.

Twelve (12) years later, on the basis of the decision of this Court in Philippine Banking Corporation vs. Lui She, 2 private respondents Rafael A. Dinglasan, et al. filed a complaint on July 1, 1968 for the recovery of the same parcel of land subject matter of the first-mentioned case. Said complaint was docketed as Civil Case No. V-3064 before respondent court. Private respondents (plaintiffs before the court a quo) reiterated their contention that the sale made to Lee Liong, predecessor-in-interest of petitioners (defendants a quo), was null and void for being violative of the Constitution, and prayed that plaintiffs be declared as the rightful and legal owners of the property in question; that defendants be ordered to vacate the premises, to surrender possession thereof to plaintiffs and to receive the amount of P6,000.00 from the plaintiffs as restitution of the purchase price; and that defendants be ordered to pay damages to the plaintiffs in the amount of P2,000.000 a month from the time of the filing of the complaint until the property is returned to them, as well as the costs of suit.

A motion to dismiss, dated September 23, 1968, was filed by defendants- petitioners on the ground of res judicata, alleging that the decision in the case of "Rafael Dinglagan, et al. vs. Lee Bun Ting, et al.", supra, promulgated on June 27, 1956, has definitely settled the issues between the parties. An opposition thereto was filed by plaintiffs, with the averment that the decision in the prior case "cannot be pleaded in bar of the instant action because of new or additional facts or grounds of recovery and because of change of law or jurisprudence. 3 In support of the change in jurisprudence asserted, the decision of this Court in Philippine Banking Corporation vs. Lui She, supra, was advanced, upon the contention that said decision warrants a reopening of the case and the return of the parcel of land involved to the plaintiffs, A reply to the opposition was filed by defendants by registered mall on October 16, 1968, alleging that the decision in Philippine Banking Corporation vs. Lui She, which was promulgated in 1967, "cannot affect the outcome of the instant case. Said 1967 decision cannot be applied to the instant case where there had been already a final and conclusive determination some twelve years earlier. While a doctrine laid down in previous cases may be overruled, the previous cases themselves cannot thereby be reopened. The doctrine may be changed for future cases but it cannot reach back into the past and overturn finally settled cases. 4

However, on October 10, 1968, before the filing of the above reply, respondent court had issued an Order denying the motion to dismiss. The court said:

A copy of the decision rendered in the case of Rafael Dinglasan, et al. vs. Lee Bun Ting, et al., G. R. No. L-5996 is attached to the motion to dismiss.

In that case, the Supreme Court ruled that both parties violated the constitutional prohibition (Article XIII, see. 9) for the purchaser was an alien and prohibited to acquire residential lot while the vendors, Filipino citizens, can not also recover the property for having violated the constitutional prohibition, under the principle of pari delicto. The vendee cannot own the property, neither ran the vendor recover what he sold.

To fill the void, the Supreme Court pointed out that the coordinate body — Congress of the Philippines — can pass remedial legislation.

But Congress failed to act, Neither was there any proceeding after almost twenty years for escheat or reversion instituted by the Office of the Solicitor General after

the Krivenko decision which prohibits the transfer to aliens of any private agricultural land including residential lands whatever its origin might have been.

But the Supreme Court took a decisive step and in bold relief dispelled darkening clouds in the case ofPhilippine Banking Corporations vs. Lui She, promulgated September 12, 1967, ... .

The concurring opinion of Justice Fernando is very enlightening and elucidating. ...

The Court wishes to refer to the concurring opinion of Justice Fernando as an additional authority supporting the herein order.

PREMISES CONSIDERED, the Court finds the motion to dismiss unmeritrious and holds that the same be as it is hereby DENIED. 5

A motion for reconsideration of the foregoing Order was filed by defendants, alleging that their reply to plaintiffs' opposition to the motion to dismiss was not even considered by the court a quo because the Order was issued before said reply Could reach the court, Further, it was asserted that the Philippine Banking Corporation vs. Lui She case had the effect of annulling and setting aside only the contracts subject matter thereof "and no other contracts, certainly not contracts outside the issues in said judgment as that in the instant case", and of ordering the return only of the lands involved in said case, and not the land subject of the present action. Moreover, it was averred that "Nowhere in the majority opinion nor in the concurring opinion in said decision of Philippine Banking Corporation vs. Lui She does there appear any statement which would have the effect of reopening and changing previously adjudicated rights of parties and finally settled cases" and that the principle enunciated in such case "should apply after, not on or before, September 12, 1967". The motion for reconsideration was found to have not been well taken and, consequently, was denied by respondent court on November 9, 1968. Defendants were given ten (10) days from receipt of the Order within which to file their answer to the complaint, Which defendants complied with.

Defendants' answer, dated December 5, 1968, contained the following allegations, among others:

(a) The sale of the parcel of land involved was made in 1935 before the promulgation of the Constitution.

(b) Said conveyance ' as an absolute sale, not subject to any right or repurchase ...

(c) Upon the purchase of the said parcel of land by the deceased Lee Liong, he and defendant Ang Chia constructed thereon a camarin for lumber business and later a two-storey five door accessoria with an assessed-valuation of P35,000.00, which said improvements were destroyed during the Japanese entry into the municipality of Capiz in April 1942, thereafter, the same improvements were rebuilt.

(d) In July 1947, the said Lee Liong being already deceased, defendants as his legal heirs entered into an extrajudicial settlement of said property, there being no creditors or other heirs, and by virtue of said extra-judicial settlement, approximately two-thirds of said property was adjudicated to defendant Ang Chia and Lee Bing Hoo as co-owners and the remaining one-third to defendant Lee Bun Ting

(e) The deceased Lee Liong and defendants have been declaring and paying real estate taxes on the said property since 1935 and up to the present year.

xxx xxx xxx

In addition to the foregoing, defendants reiterated their defense of res judicata, on the basis of the decision of the Supreme Court of June 27, 1956. It was, therefore, prayed that the complaint be dismissed, with counterclaim for attorney's fees and expenses of litigation or, in case of adverse judgment, that plaintiffs be ordered to pay the reasonable equivalent of the value of the property at the time of the restoration, plus reimbursement of improvements thereon.

A reply and answer to the counterclaim, dated December 14, 1968, was filed by plaintiffs. On March 31, 1969, respondent court issued an Order denying a motion filed by petitioners for simplification of the issues and for the striking out from the records of the declaration of Rafael Dinglasan under the Survivorship Disqualification Rule. A motion for reconsideration of the foregoing Order was denied on May 7, 1969.

During the pendency of the trial, plaintiffs filed a petition for the appointment of a receiver "to receive, collect and hold in trust all income of the property in the form of monthly rentals of P2,000.00", on the premise that defendants have no other visible property which will answer for the payment of said rentals. This petition was opposed by defendants, alleging that plaintiffs will not suffer any irreparable injury or grave damage if the petition for receivership is not granted, particularly as defendants are solvent and further considering that defendants have a building on the parcel of land, the value of which must likewise be considered before plaintiffs can be awarded possession of the land. The matter of receivership was heard by respondent court and on May 17, 1969, it issued an Order appointing respondent Atty. Antonio D. Amosin, Deputy Clerk of Court, as receiver with instructions to take immediate possession of the property in litigation and to preserve, administer and dispose of the same in accordance with law and order of the court, upon the posting of a bond in the amount of P500.00. On May 17, 1969, the appointed receiver took his oath. Hence, the instant petition.

Petitioners herein pray that judgment be rendered annulling and setting aside respondent court's complained of Orders (rated October 10, 1968. November 9, 1968, March 31, 1969, May 7, 1969 and May 17, 1969, and ordering the dismissal of Civil Case no. L-3064 of respondent court on the ground of res judicata Petitioners further prayed for the issuance of a writ of preliminary injunction to restrain respondent court from proceeding with the scheduled hearings of the case, and respondent receiver from executing the order to take immediate possession of the property in litigation.

On June 16, 1969, this Court issued the writ of preliminary injunction prayed for, restraining respondent court from continuing with the scheduled trial of the case and respondent receiver from executing the order to take immediate possession of the property in litigation and/or otherwise discharging or performing his function as receiver.

The issue posed before Us is whether the questions which were decided in Rafael Dinglagan, et al. vs. Lee Bun Ting et al., supra, could still be relitigated in Civil Case No. V-3064, in view of the subsequent decision of this Court in Philippine Banking Corporation vs. Lui She, supra.

We resolve the issue in the negative. The decision of this Court in G. R. No. L-5996, "Rafael Dinglasan, et al. vs. Lee Bun Ting, et al." constitutes a bar to Civil Case No. V-3064 before the respondent court. Said Civil case, therefore, should have been dismissed because it is a mere relitigation of the same issues previously adjudged with finality, way back in 1956, between the same parties or their privies and concerning the same subject matter. We have consistently held that the doctrine of res judicata applies where, between a pending action and one which has been finally and definitely settled, there is Identity of parties, subject matter and cause of action.

The concept of res judicata as a "bar by prior judgment" was explained in Comilang vs. Court of Appeals, et al., promulgated on July 15, 1975, 6 thus:

The fundamental principle upon which the doctrine of res judicata rests is that parties ought not to be permitted to litigate the same issue more than once; that, when a right or fact has been jurisdically tried and determined by a court of competent jurisdiction, or an opportunity for such trial has been given, the judgment of the court, so long as is remains unreversed, should be conclusive upon the parties and those in privity with them in law or estate. ...

xxx xxx xxx

This principle of res judicata  is embodied in Rule 39, Sec. 49(b) and (c) of the Rules oil' Court, as follows;

(b) In other cases the judgment or order is, with respect to the matter directly adjudged or as to any other matter that could have been raised in relation thereto, conclusive between the parties and their successors in interest by title subsequent to the commencement of the action or special proceeding, litigating for the same 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 which appears upon its face to have been so adjudged, or was actually and necessarily included therein or necessary thereto.

Sec. 49(b) enunciates that concept of res judicata known as 'bar by prior judgment' while Sec. 49(c) refers to 'Conclusiveness of judgment.' 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 or 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. (pp. 76-78).

A comparison between the earlier case of "Rafael Dinglasan, et al. vs. Lee Bun Ting, et al." (G. R. No. L-5996) and the case pending before respondent court 7 reveals that the requisites for the application of the doctrine of res judiciata are present. It is undisputed that the first case was tried and decided by a court of compentent jurisdiction, whose decision was affirmed on appeal by this Tribunal. The parties to the two cases are substantially the same, namely, as plaintiffs, Rafael A. Dinglasan, Carmen A. Dinglasan, Francisco A. Dinglasan, Jr., Ramon A. Dinglasan, Lourdes A. Dinglasan, Mercedes A. Dinglasan, Concepcion A. Dinglasan, Mariano A. Dinglasan, Jose A. Dinglasan, Loreto A. Dinglasan, Manuel A. Dinglasan, Rizal A. Dinglasan and Jimmy Dinglasan (the differences being the inclusions of the minor Vicente Dinglasan in L-5996 and Jesse Dinglasan in the case before respondent court), against defendants Lee Bun Ting and Ang Chia, in her capacity as Widow of the deceased Lee Liong (and Administratrix of his estate in L-5996). The subject matter of the two actions are the same, namely, that

"parcel of land, Cadastral Lot No. 398, located at Trece de Agosto Street, now Roxas Avenue, corner of Pavia St., in the municipality of Capiz, now Roxas City, covered by Original Certificate of Title No. 3389 of the Office of Register of Deeds of Capiz in the name of ... Francisco Dinglasan and originally declared under Tax (Declaration) No. 19284 also in his name in the municipality of Capiz, but now declared as Cadastral Lots Nos. 398-A and 398-B respectively under Tax Declarations Nos. 7487 and 7490 in the City of Roxas in the names of Ang Chia Vda. de Lee and Lee Bun Ting respectively ... " The causes of action and the reliefs prayed for are identical — the annulment of the sale and the recovery of the subject parcel of land.

Notwithstanding the mode of action taken by private respondents, We find that in the ultimate analysis, Civil Case No. V-3064 is but an attempt to reopen the issues which were resolved in the previous case. Contrary to the contentions of private respondents, there has been no change in the facts or in the conditions of the parties. Neither do We find Our ruling in the Philippine Banking Corporation case applicable to the case at bar, considering the rule that posterior changes in the doctrine of this Court cannot retroactively be applied to nullify a prior final ruling in the same proceeding where the prior adjudication was had, whether the case should be civil or criminal in nature. The determination of the questions of fact and of law by this Court on June 27, 1956 in case No. L-5996 has become the law of the case, and may not now be disputed or relitigated by a reopening of the same questions in a subsequent litigation between the same parties and their privies the same subject matter. Thus, in People vs. Olarte, 8 We explained this doctrine, as follows:

Suffice it to say that our ruling in Case L-13027, rendered on the first appeal, constitutes the law of the case, and, even if erroneous it may no longer be disturbed or modified since it has become final long ago. A subsequent reinterpretation of the law may be applied to new cases bat certainly not to an old one finally and conclusively determined (People, vs. Pinuila, G. R. No. L-11374, May 30, 1958; 55 O.G. 4228).

Law of the case' has been defined as the opinion delivered on a former appeal. More specifically, it means that whatever is once irrevocably established the controlling legal rule of decision Between the same parties in the same case continues to 1)(, the law of the case whether correct on general principles or not, so long as the facts on which such decision was predicated continue to be the facts of the case before the court. (21 C.J.S. 330). (cited in Pinuila case, supra).

As a general rule a decision on a prior appeal of the same case is held to be the law of the case whether that decision is right or wrong, the remedy of the party being to seek a rehearing. (5 C.J.S. 1277). (also cited in Pinuila case)

It is also aptly held in another case that:

It need not be stated that the Supreme Court, being the court of last resort, is the final arbiter of all legal questions properly brought before it and that its decision in any given case constitutes the law of that particular case. Once its judgment becomes final it is binding on all inferior courts, and hence beyond their power and authority to alter or modify Kabigting vs. Acting Director of Prisons, G. R. No. L-15548, October 30, 1962).

More categorical still is the pronouncement of this Court in Pomeroy vs. Director of Prisons, L-14284-85, February 24, 1960:

It will be seen that the prisoner's stand assumes that doctrines and rulings of the Supreme Court operate retrospectively and that they can claim the benefit of decisions in People vs, Hernandez; People vs. Geronimo, and People vs. Dugonon (L-6025-26, July 18, 1956; L-8936, Oct. 31, 1956; and L-8926, June 29, 1957, respectively), promulgated four or more years after the prisoner applicants had been convicted by final j judgment and started serving sentence. However, the rule adopted by this Court (and by the Federal Supreme Court) is that judicial doctrines have only prospective operation and do not apply to cases previously decided (People vs. Pinuila, L-11374, promulgated May 30, 1958)

In the foregoing decision, furthermore, this Court quoted and reiterated the rule in the following excerpts fromPeople vs. Pinuila, G.R No. L-11374, jam cit.:

The decision of this Court on that appeal by the government from the order of dismissal, holding that said appeal did not place the appellants, including Absalong Bignay in double jeopardy, signed and concurred in by six justices as against three dissenters headed by the Chief Justice, promulgated way back in the year 1952, has long become the latter of the curse. It may be erroneous, judge by the law on double jeopardy as recently interpreted by this same. Tribunal. Even so, it may not be disturbed and modified. Our recent interpretation of the law may be applied to new cases, but certainly not to an old one finally and conclusively determined. As already stated, the majority opinion in that appeal is now the law of the case.

The same principle, the immutability of the law of the case notwithstanding subsequent changes of judicial opinion, has been followed in civil cases:

Fernando vs. Crisostomo, 90 Phil. 585; Padilla vs. Paterno, 93 Phil. 884; Samahang Magsasaka, Inc. vs. Chua Guan, L-7252, February, 1955.

It is thus clear that posterior changes in the doctrine of this Court can not retroactively be applied to nullify a prior final ruling in the same proceeding where the prior adjudication was had, whether the case should be civil or criminal in nature. 9

Reasons of public policy, judicial orderliness, economy and judicial time and the interests of litigants, as well as the peace and order of society, all require that stability be accorded the solemn and final judgments of the courts or tribunals of competent jurisdiction. There can be no question that such reasons apply with greater force on final judgments of the highest Court of the land.

WHEREFORE, certiorari is granted, the Orders complained of are hereby annulled and set aside, and respondent Judge is directed to issue an Order dismissing Civil Case No. V-3064. With costs against private respondents.

Barredo, Aquino and Concepcion, Jr., JJ., concur.

Castro, C.J., concurs in the result.

Fernando, J., took no part.

EN BANC

[G.R. No. L-16463. January 30, 1965.]

PHILIPPINE NATIONAL BANK, Plaintiff-Appellants, v. HERMOGENES HIPOLITO and LEONOR JUNSAY, Defendants-Appellees.

Ramon B. de los Reyes, for Plaintiff-Appellant.

P. A. Palanca for Defendants-Appellees.

SYLLABUS

1. PLEADINGS AND PRACTICE; MOTION TO DISMISS ADMITS TRUTH OF ALLEGATIONS OF COMPLAINT. — In a motion to dismiss defendant hypothetically admits the truth of the allegations of fact contained in the complaint.

2. ID.; ID.; DENIAL OF ALLEGATIONS OF COMPLAINT NOT PROPER IN A MOTION TO DISMISS. — A denial of an allegation of a complaint, as for example the denial of an offer of payment which would prevent prescription from setting in, would be proper in the answer to the complaint but not in a motion for dismissal, for the contradictory allegations would require presentation of evidence.

3. PRESCRIPTION; RENEWAL OF OBLIGATION BY OFFER OF PAYMENT. — An offer of payment works as a renewal of the obligation and prevents prescription from setting in.

D E C I S I O N

MAKALINTAL, J.:

Appeal from the order of dismissal by the Court of First Instance of Negros Occidental.

The complaint, filed on June 18, 1959, allege that defendants obtained various sugar crop loans from plaintiff through its Victorias Branch, evidenced by promissory notes (reproduced as annexes to the complaint) respectively dated January 25, 1941, February 13, 1941, March 8, 1941, April 3, 1941, May 2, 1941 and June 23, 1941; that of the total amount of P9,692.00 represented by said notes defendants paid P3,905.61, leaving a balance of P6,786.39, which, added to accrued interest of P5,213.34, summed up to P11,999.73 as of January 17, 1957; that despite repeated demands, defendants failed and refused to pay said amount; that in view of such demands defendants, on May 7, 1957, went to Attorney Francis I. Medel of the legal department of plaintiff’s Victorias branch and offered a plan of payment of the account, but for reasons unknown to plaintiff and probably due to the transfer of defendant Hipolito as supervising teacher to some other province, his proposed plan of payment did not materialize; that said offer of plan of payment was an acknowledgment of defendants’ just and valid obligation. The prayer is for the court to order defendants to pay to plaintiff the said amount of P11,999.73, with accrued annual interest thereon at the rate of 5% from January 17, 1957 up to the date of payment, plus attorney’s fees equivalent to 10%.

Defendants move for a bill of particulars, but the motion was denied. They then moved to dismiss on the ground that plaintiff’s cause of action, if any, had already prescribed. To the motion they attached a joint affidavit of merit, wherein they averred that they never made any acknowledgment of indebtedness nor offered a plan of payment, but on the contrary had always maintained that plaintiff’s action had prescribed.

Plaintiff opposed the motion, contending that the prescriptive period had been suspended by "Executive Order No. 32, otherwise known as the Moratorium Law," and interrupted, pursuant to Article 1973 of the old Civil Code, by plaintiff’s written extra-judicial demands as well as by defendants’ acknowledgment of the indebtedness. Attached to the opposition were (1) a statement of defendants’ account dated July 22, 1947; (2) plaintiffs’ letter dated October 31, 1953, asking defendants to make arrangements for the liquidation of the debt (3) letter of plaintiffs’ Victorias Branch Manager, dated February 4, 1959, addressed to defendant Hipolito (at Iloilo City) requesting him to settle his account, otherwise drastic action would be taken against him as a government employee, and reminding him of his May 7, 1957 interview with Branch Attorney

Medel, wherein he proposed a plan of payment which however did not materialize; and (4) defendant Hipolito’s answer dated February 16, 1959, requesting said Manager, in his personal and not in his official capacity, to be more "sensitive" to the financial plight of defendants; and requesting further that he or any of his investigators study the case by seeing Mrs. Hipolito (who was then staying very near the Victorias Branch Office) about "the actual insolvency of the family," ending up with an appeal for help "in this matter." cralaw virtua1aw library

Defendants replied to plaintiff’s opposition, stating among other things that Executive Order No. 32, if at all, suspended the prescriptive period "only for two (2) years, four (4) months and sixteen (16) days, from March 10, 1945, or only up to July 26, 1948," citing Bachrach Motors Co., Inc. v. Chua Tia Hian, 53 O.G. 6524; that the alleged written extrajudicial demands constitute self-serving evidence; and that defendant Hipolito’s letter of February 16, 1959 can not be considered as an acknowledgment of indebtedness.

In dismissing the complaint the lower court ruled that since the seven promissory notes constituted one single obligation, arising as it did from plaintiff’s financiation of defendants’ sugar crop for 1941-42, the date of the last promissory note, June 23, 1941, should be considered as the true date of the written contract, from which the ten year prescriptive period (Art. 1144, par. 1 of the new Civil Code) started; that said period was suspended only for two (2) years, four (4) months and sixteen (16) days (by reason of Executive Order No. 32) until said Order was declared unconstitutional; that prescription set in on November 8, 1953, five (5) years, five (5) months and ten (10) days before the complaint was filed on June 18, 1959; that the alleged letters of demand cannot be considered as extrajudicial demands "under Art. 1155 of the Civil Code" because there is no proof that defendants received them; that plaintiff’s letter of demand of February 4, 1959, which was admittedly received by defendant Hipolito, did not work to interrupt the prescriptive period which had already previously elapsed; and that defendant Hipolito’s answering letter of February 16, 1959 does not contain any express or tacit acknowledgment of the obligation nor promise to pay the same and hence did not renew the obligation.

We are of the opinion that the dismissal of the complaint is erroneous. In a motion to dismiss defendant hypothetically admits the truth of the allegations of fact contained in the complaint. (Pangan v. Evening News Publishing Co., Inc., L-13308, Dec. 29, 1960; Pascual v. Secretary of Public Works and Communications, L-10405, Dec. 29, 1960; Republic v. Ramos, L-15484, Jan. 31, 1963).

An examination of the complaint herein does not indicate clearly that prescription has set in. On the contrary, it is belied by the allegation concerning defendant’s offer of payment made on May 7, 1957. Such offer hypothetically admitted in the motion, worked as a renewal of the obligation.

It is true that defendants attached to the motion a joint affidavit of merit wherein they deny having made an offer of a plan of payment. Such denial, however, being a contrary averment of fact, would be proper in the answer to the complaint but not in a motion for dismissal, for the contradictory allegations would require presentation of evidence (Alquigue v. De Leon, L-15059, March 30, 1963). The same is true of the other allegations in the complaint concerning, the demands for payment sent by plaintiff upon defendants and the partial payments made by them, all or some of which may have a material bearing on the question of prescription. In other words, the ground for dismissal not being indubitable, the lower court should have deferred determination of the issue until after trial of the case on the merits. (Sec. 3, Rule 16, Revised Rules of Court; Geganto v. Katalbas, L-17105, July 31, 1963).

The order appealed from is set aside and the case is remanded to the lower court for further proceedings, with costs against appellees.

Bengzon, C.J., Bautista Angelo, Reyes, J.B.L., Barrera, Paredes, Dizon, Regala, Bengzon, J. P. and Zaldivar, JJ., concur.

Concepcion, J., took no part.

FIRST DIVISION

[G.R. No. 88586. April 27, 1990.]

CONTINENTAL CEMENT CORPORATION, Petitioner, v. COURT OF APPEALS and MUNICIPALITY OF NORZAGARAY, Respondents.

Gil Venerando R. Racho for Petitioner.

Ponciano G. Hernandez for Private Respondent.

SYLLABUS

1. REMEDIAL LAW; CIVIL PROCEDURE; MOTION TO DISMISS; SEASONABLY FILED IN CASE AT BAR. — The default order was clearly erroneous and should not have been sustained on appeal. There is no question that the motion to dismiss was filed seasonably, within the period of the second extension granted by the trial court. It is true that such a motion could not be considered a responsive pleading as we have held in many cases. Nevertheless, it is also true that in Section 1 of Rule 16 of the Rules of Court, it is provided that "within the time for pleading, a motion to dismiss the action may be made" on the grounds therein enumerated, including the grounds invoked by the petitioner.

2. ID.; ID.; ID.; TIME TO PLEAD FROM DENIAL THEREOF. — It is clearly provided in Section 4 of the same Rule that: Sec. 4. Time to plead. — If the motion to dismiss is denied or if determination thereof is deferred, the movant shall file his answer within the period prescribed by Rule 11, computed from the time he received notice of denial or deferment, unless the court provides a different period. The motion to dismiss was filed on May 25, 1985, three days before the expiration of the second extension. Notice of its denial was served on the petitioner on July 29, 1985. From that date, the petitioner had 15 days within which to file its answer, or until August 13, 1985. It was unable to do so, however, because of the default order issued by the trial court on August 2, 1985. On that date, the petitioner still had eleven days before the expiration of the 15-day reglementary period during which the petitioner was supposed to file his answer.

3. ID.; ID.; ORDER OF DEFAULT; NULL AND VOID FOR HAVING BEEN ISSUE BEFORE AN ANSWER WAS FILED. — We hold that in issuing the order of default before the expiration of the period for the filing of its answer, the trial court deprived the petitioner of the opportunity to be heard in its defense. The judgment by default thereafter rendered, on the basis only of the evidence of the plaintiff, was therefore also invalid. We do not agree with the respondent court that the petitioner should have first filed a motion to set aside the default order before challenging the judgment by default on appeal. The evidence that the default order was not served on the petitioner has not been refuted. It is not explained why the default judgment was served on the correct counsel of the petitioner but the default order was not. At any rate, the default order was a total nullity and produced no legal effect whatsoever because it was issued even before the petitioner could file its answer. This was clearly a violation of due process.

4. ID.; ID.; MOTION FOR RECONSIDERATION; SUSPENDS THE RUNNING OF REGLEMENTARY PERIOD TO APPEAL. — The record shows that the decision of the Court of Appeals was rendered on April 7, 1989, and notice thereof was served on the petitioner on April 17, 1989. On April 28, 1989, the petitioner filed a motion for reconsideration, which was denied on June 1, 1989. Notice of the denial was served on June 8, 1989, and on June 21, 1989, the petitioner asked this Court for a 30-day extension within which to file the present petition. The extension was granted up to July 23, 1989. The private respondent contends that the petition was filed late because the 15-day reglementary period should be counted from April 17, 1989, when the decision of the respondent court was served on the petitioner. Its reason is that the motion for reconsideration was pro forma and did not suspend the running of the said period, which thus expired on May 3, 1989. While mindful of the decision cited by the private respondent, we call attention to our later pronouncement on this matter, in the case of Siy v. Court of Appeals: In the first place, the very purpose of a motion for reconsideration is to point out the findings and conclusions of the decision which in the movant’s view, are not supported by law or the evidence. The movant, therefore, is very often confined to the amplification on further discussion of the same issues already passed upon by the court. Otherwise, his remedy would not be a reconsideration of the decision but a new trial or some other remedy. Conformably, we must hold that the motion for reconsideration was not pro forma. Hence, it did have the effect of suspending the reglementary period of appeal until the denial of the motion was notified to the petitioner.

5. ID.; ID.; REGIONAL TRIAL COURT; VESTED WITH POWER TO DETERMINE QUESTIONS OF FACTS. — The rest of the petition deals with the substantive issue of whether the respondent Municipality of Norzagaray has the power to impose business taxes on the petitioner as a manufacturer and distributor of cement. This issue involves not only legal but also factual considerations that have not been fully examined because the petitioner was not given its day in court. A fair resolution of this issue requires a healing where both parties will be given an opportunity to present their respective sides in accordance with the procedure prescribed by

the Rules of Court. No less than full compliance with procedural due process will suffice. Hence, It is imperative that this case be remanded to the court a quo for a full trial on the merits.

D E C I S I O N

CRUZ, J.:

The question involved in this case is quite simple and not even new. A little research could have easily resolved it and avoided this litigation that has come up all the way to this Court. If we are rendering a full-blown decision instead of disposing of the issue by a short resolution, it is not only because we see the need to reiterate certain basic rules that should be well-settled by now. What we especially intend is to impress upon bench and bar the value of keeping abreast of the doctrines announced by the Court in the interpretation of its Rules.

The facts are easily recounted.

On February 1, 1985, the Municipality of Norzagaray filed a complaint for recovery of taxes against the petitioner in the Regional Trial Court of Malolos, Bulacan. Before the expiration of the 15-day reglementary period to answer, the petitioner filed two successive motions for extension of time to file responsive pleadings, which were both granted. The last day of the second extension was May 28, 1985. On May 25, 1985, the petitioner filed a motion to dismiss the complaint on the ground of the plaintiff’s lack of capacity to sue and lack of a cause of action. The motion was denied on July 16, 1985, "both for lack of merit and for having been improperly filed." On July 25, 1985, the plaintiff moved to declare the petitioner in default for having filed only the motion to dismiss and not a responsive pleading during the extension granted. This declaration was made on August 2, 1985, and evidence for the plaintiff was thereafter received ex parte, resulting in a judgment in its favor on February 4, 1986. The judgment was affirmed by the respondent court in its decision dated April 7, 1989, 1 which is the subject of the present petition.

Our ruling follows.

The default order was clearly erroneous and should not have been sustained on appeal. There is no question that the motion to dismiss was filed seasonably, within the period of the second extension granted by the trial court. It is true that such a motion could not be considered a responsive pleading as we have held in many cases. 2 Nevertheless, it is also true that in Section 1 of Rule 16 of the Rules of Court, it is provided that "within the time for pleading, a motion to dismiss the action may be made" on the grounds therein enumerated, including the grounds invoked by the petitioner.

Moreover, it is clearly provided in Section 4 of the same Rule that: chanrob1es virtual 1aw library

Sec. 4. Time to plead. — If the motion to dismiss is denied or if determination thereof is deferred, the movant shall file his answer within the period prescribed by Rule 11, computed from the time he received notice of denial or deferment, unless the court provides a different period.

The motion to dismiss was filed on May 25, 1985, three days before the expiration of the second extension. Notice of its denial was served on the petitioner on July 29, 1985. From that date, the petitioner had 15 days within which to file its answer, or until August 13, 1985. It was unable to do so, however, because of the default order issued by the trial court on August 2, 1985. On that date, the petitioner still had eleven days before the expiration of the 15-day reglementary period during which the petitioner was supposed to file his answer.

The respondents are reminded of our ruling in Barraza v. Campos, 3 to wit: chanrob1es virtual 1aw library

Under the facts of the case at bar, respondent Judge had granted petitioners an extension of fifteen (15) days to file their answer, or up to November 18, 1978. Instead of filing the answer, petitioners filed a Motion to Dismiss the Complaint on November 17, 1978, one (1) day before the expiration of the period as extended by the court. This is clearly allowed under Section 1, Rule 16, Rules of Court. A motion to dismiss is the usual, proper and ordinary method of testing the legal sufficiency of a complaint. The issue raised by a motion to dismiss is similar to that formerly raised by a demurrer under the Code of Civil Procedure. (Zobel v. Abreu, 98 Phil. 343). A motion to dismiss under any of the grounds enumerated in Section 1, Rule 8 (now Section 1, Rule 16) of the Rules of Court, must be filed within the time for pleading, that is, within the time to answer. (J.M. Tuason v. Rafor, L-15537, June 30, 1962, 5 SCRA 478.)

Private respondents’ argument that although a motion to dismiss interrupts the running of the period within which to file an answer, this refers to the original period of fifteen (15) days within which to file the responsive pleading and not to the extension of time within which to file the answer, is without merit. There is nothing in the Rules which provides, directly or indirectly, that the interruption of the running of the period within which to file an answer when a motion to dismiss the complaint is filed and pending before the court, refers only to the original period of fifteen (15) days and not to the extension of time to file the answer as granted by the court. It may be true that under Section 4 of Rule 16, if the motion to dismiss is denied or if the termination thereof is deferred, the movant shall file his answer within the time prescribed by Rule 11, computed, from the time he received notice of the denial or deferment, unless the court provides a different period.

This Section 1 of Rule 11 in relation to Section 4 of Rule 16 allows the defendant to file his answer not only within the original fifteen (15) days period but also within "a different period (as) fixed by the court." (Emphasis supplied.)chanrobles.com:cralaw:red

The above ruling was a reiteration of Mandac v. Gumarad, 4 where we also set aside a default order upon a showing that the motion to dismiss was filed before the expiration of the extension granted by the trial court for the filing of the answer.

As for the period allowed the defendant to file its answer following the denial of the motion to dismiss, the Court clearly held thus in Acosta-Ofalia v. Sundiam: 5 

. . . the period for filing a responsive pleading commences to run all over again from the time the defendant receives notice of the denial of his motion to dismiss.

In the case at bar, the petitioners received the notice of the denial of their motion to dismiss on September 24, 1975. Hence, they had fifteen (15) days from said date or up to October 9, 1975, within which to file their answer. The petitioners were declared in default on September 29, 1975, i.e., ten (10) days before the expiration of the time for filing their answer. Obviously, the order of default made on September 19, 1975, was premature and is, therefore, null and void as well as the reception of private respondents’ evidence ex parte, the decision rendered thereon, and the writ of execution, having been predicated on a void order of default.

Manifestly, respondent Judge acted with grave abuse of discretion when he declared the petitioners in default. (Emphasis supplied.)

On the basis of the above doctrines, the Court recapitulates the rules as follows: chanrob1es virtual 1aw library

1. The trial court may in its discretion and on proper motion extend the 15-day reglementary period for the filing of responsive pleadings.

2. During the original reglementary 15-day period, or any extension of such period, the defendant may file a motion to dismiss the complaint.

3. If the motion to dismiss is denied, the defendant is allowed another fifteen days from notice of the denial to file the responsive pleading. The full 15-day reglementary period starts all over again.

Accordingly, we hold that in issuing the order of default before the expiration of the period for the filing of its answer, the trial court deprived the petitioner of the opportunity to be heard in its defense. The judgment by default thereafter rendered, on the basis only of the evidence of the plaintiff, was therefore also invalid. chanrobles lawlibrary : rednad

We do not agree with the respondent court that the petitioner should have first filed a motion to set aside the default order before challenging the judgment by default on appeal. The evidence that the default order was not served on the petitioner has not been refuted. It is not explained why the default judgment was served on the correct counsel of the petitioner but the default order was not. 6 At any rate, the default order was a total nullity and produced no legal effect whatsoever because it was issued even before the petitioner could file its answer. This was clearly a violation of due process.

We come finally to the timeliness of the present petition.

The private respondent contends that it was filed out of time on July 22, 1989, because the appealed decision had already become final and executory before that date.

The record shows that the decision of the Court of Appeals was rendered on April 7, 1989, and notice thereof

was served on the petitioner on April 17, 1989. On April 28, 1989, the petitioner filed a motion for reconsideration, which was denied on June 1, 1989. Notice of the denial was served on June 8, 1989, and on June 21, 1989, the petitioner asked this Court for a 30-day extension within which to file the present petition. The extension was granted up to July 23, 1989.

The private respondent contends that the petition was filed late because the 15-day reglementary period should be counted from April 17, 1989, when the decision of the respondent court was served on the petitioner. Its reason is that the motion for reconsideration was pro forma and did not suspend the running of the said period, which thus expired on May 3, 1989. The basis of this argument is the wording of the denial, which ran as follows:chanrob1es virtual 1aw library

The issues raised and the arguments contended in the Motion for Reconsideration of defendant-appellant are the same issues and arguments presented in the appellant’s brief, reply brief and supplemental reply brief, which have been discussed in plaintiff-appellee’s brief and resolved in the decision of this Court dated April 7, 1989.

After close scrutiny of the Motion for Reconsideration, We find no cogent reason to reverse Our decision. chanrobles.com.ph : virtual law library

WHEREFORE, the Motion for Reconsideration is DENIED for lack of merit. 7 

While mindful of the decision cited by the private respondent, 8 we call attention to our later pronouncement on this matter, in the case of Siy v. Court of Appeals: 9 

In the first place, the very purpose of a motion for reconsideration is to point out the findings and conclusions of the decision which in the movant’s view, are not supported by law or the evidence. The movant, therefore, is very often confined to the amplification on further discussion of the same issues already passed upon by the court. Otherwise, his remedy would not be a reconsideration of the decision but a new trial or some other remedy.

Conformably, we must hold that the motion for reconsideration was not pro forma. Hence, it did have the effect of suspending the reglementary period of appeal until the denial of the motion was notified to the petitioner.

The rest of the petition deals with the substantive issue of whether the respondent Municipality of Norzagaray has the power to impose business taxes on the petitioner as a manufacturer and distributor of cement. This issue involves not only legal but also factual considerations that have not been fully examined because the petitioner was not given its day in court. A fair resolution of this issue requires a healing where both parties will be given an opportunity to present their respective sides in accordance with the procedure prescribed by the Rules of Court. No less than full compliance with procedural due process will suffice. Hence, It is imperative that this case be remanded to the court a quo for a full trial on the merits.

WHEREFORE, the decision of the respondent court dated April 7, 1989, the default order of the trial court dated August 2, 1985, and the judgment by default dated February 4, 1986, are SET ASIDE. Civil Case No. 7971-M is REMANDED to the Regional Trial Court of Malolos, Bulacan, for further proceedings in accordance with the rules laid down in this decision. Costs against respondent Municipality of Norzagaray.

SO ORDERED.

Narvasa, Gancayco, Griño-Aquino and Medialdea, JJ., concur.