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• court issued a restraining order directing defendants (private

Dilag vs. IAC respondent herein) and his agents to desist from entering and
Arellano wresting possession
• as parent of the late Herminio Arellano who had died in a • MTD by respondents herein
vehicular accident ◦ on the ground: no jurisdiction to annul a judgment of
• truck owned by spouses Pablo and Socorro Dilag, another branch of the same. - denied
• awarded by the trial court Damages • Arellano MR and exception to the bond
◦ and offered a counterbond double that of the Dilag
Dilag spouses children. - denied
• filed before the Court a petition for relief • Arellano filed his petition for certiorari, prohibition and/or
• dismissed injunction with preliminary mandatory injunction and
damages -> CA
Writ of Execution issued CA: simulated sale between Dilag sps and childred executed in
• Notice of Levy on Execution was annotated on TCT No. fraud of creditors
30137 on February 21, 1979, covering a parcel of land in
Dumangas, Iloilo present petition for certiorari by the Dilag -> SC
◦ TCT - Adverse Claim dated March 11, 1974 filed by
SC: Petitioners' contentions do not hold water.
Dilags to protect their rights and interests as vendees
• Lot - sold at public auction by the Provincial Sheriff
At the time of the levy on execution in Civil Case No. 8714 the
◦ Dilag spouses failed to exercise their right of Dilag spouses were still the registered owners of Lot 288 as
redemption, shown in TCT No. 30137 and they were also the declared owners of
◦ Abs Deed of Sale to Arellano Lot 1927 as shown in Tax Declaration No. 411900-3039.
◦ writ of possession was issued on December 20, 1982 • title was issued on August 14, 1981, several days ahead of
◦ Return of Service - attested to the fact that on December the deed of sale, dated August 26, 1981 on which the new
22, 1982, delivery of possession of the subject lot title in the name of the petitioners was based, and inscribed
◦ Arellano sold Lot No. 288 to Marcelino Florete Jr. and on August 27, 1981. Clearly the Deed of Absolute Sale in
Leon Coo favor of petitioners herein executed in 1974 after the
filing of Civil Case No. 8714 was a simulated and
Dilag children filed Civil Case No. 15085 for the annulment of fictitious transaction to defraud Arellano who obtained a
decision money judgment against the parents of petitioners.
• “levy on execution on TCT No. 30137 was illegal since it He however recognized Arellano's right of ownership when he was
was made on property no longer owned by judgment debtors notified of the delivery of possession to Arellano by the Provincial
(the Dilag spouses” Sheriff as evidenced by a signed delivery receipt, dated December
12, 1983.
• petitioner obtained an order for the issuance of a writ of
Sec. 13. How execution for the delivery or restitution of property execution.
enforced. — The officer must enforce an execution for the delivery • City Sheriff levied on three (3) parcels of land
or restitution of property by ousting therefrom the person against • notice of the sale of said lots was issued by the Sheriff and
whom the judgment is rendered and placing the judgment creditor published in the "Daily Record"
in possession of such property, and by levying as hereinafter • sold in favor of petitioner
provided upon so much of the property of the judgment debtor as • de Vera and Santos filed an action to annul the levy, notice of
will satisfy the amount of the judgment and costs included in the sale, sale at public auction and final deed of sale
writ of execution. • Petitioner: IPV and sale not reg
When the Dilag children (petitioners herein) filed Civil Case no.
LC: sustained validity of levy and sale
15085 on July 5, 1983, they were not in possession of the property in
CA: lots could not be legally levied upon
question. There was therefore no factual and legal basis for the
• at the time of the execution sale, the judgment debtor was no
restraining ordering Arellano and/or dated July 8, 1983 of the lower
court ordering Arellano and/or his agents to desist from entering Lot longer the owner thereof;
No. 288. Thus Rule 39 Sec. 13 relied upon by petitioners will not
apply in the case at bar. SC: reversed the judgment of the respondent appellate court and rule
in favor of the herein petitioner.
• Sale of real estate becomes legally effective against third
Campillo v CA persons only from the date of its registration.
petition for review on certiorari purchasers at execution sales should bear in mind that the rule of
only issue is: who has a better right or title to the herein disputed two caveat emptor applies to such sales, that the sheriff does not
(2) parcels of land — warrant the title to real property sold by him as sheriff, and that it is
• Simplicio Santos who earlier purchased them in a private sale not incumbent on him to place the purchaser in possession of such
but failed to register his sale, or property, still the rule applies that a person dealing with registered
• petitioner Sostenes Campillo who subsequently purchased land is not required to go behind the register to determine the
condition of the property and he is merely charged with notice of the
them at an execution sale and obtained a certificate of title.
burdens on the property which are noted on the face of the register or
the certificate of title. Hence, the petitioner herein, as the purchaser
FACTS
in the execution sale of the registered land in suit, acquires such right
• Tomas de Vera and his wife Felisa Serafico sold two (2)
and interest as appears in the certificate of title unaffected by prior
parcels of land to Simplicio Santos lien or encumbrances not noted therein. This must be so in order to
◦ never presented for registration in the office of the preserve the efficacy and conclusiveness of the certificate of title
Registry of Deeds which is sanctified under our Torrens system of land registration.
• Campillo obtained a judgment for a sum of money against
Tomas de Vera – became F&X
WHEREFORE, the questioned decision of the respondent appellate SC:
court is hereby reversed and set aside, and the judgment of the lower
court is reinstated. Without pronouncement as to costs. Petitioners’ claim based on prescription also on the alleged sale of
the same by Emiliano Pacheco in January 1939, and its sale by
PACHECO Rafael in September 1964, to Ciriaco Pacheco, who sold a portion
petition for review on certiorari thereof, Lot No. 4, to Estrella Razo-Rey on December 23, 1965.
Petitioner Abitria likewise claimed that he purchased Lot No. 5 from
FACTS Emiliano Pacheco on April 28, 1950.
• Emiliano Pacheco sold to Rafael Pacheco some 1,170 square
meters On these claims, the Court of First Instance of Sorsogon declared as
• mortgaged by Rafael Pacheco to PNB follows:
• sold at public auction upon foreclosure
• repurchased by Rafael Pacheco ". . . . Be that as it may, Ciriaco Pacheco asserted that after his father
• Rafael Pacheco sold the said land to Ciriaco Pacheco - sold a bought the property from Emiliano Pacheco sometime in 1939, he
portion thereof to his co-petitioner, Estrella Razo-Rey and his father occupied the land and their possession was public,
• civil case entitled "Daniel Hernandez v. Emiliano Pacheco," open, peaceful, continuous, uninterrupted, adverse and in concept of
owner. The land they occupied is the very land which he is at present
◦ in favor of the plaintiff
occupying or Lot 3 indicating Lot 4 which he later sold to Mrs.
◦ lot levied upon and sold at public auction. Rey. He further alleged that his late father even constructed a house
◦ Hernandez, herein private respondent, was the purchaser. where they lived on Lot 4. Unfortunately, the house built by his
• Hernandez filed a complaint against the petitioners father was burned down during the conflagration that hit that district
◦ refusal to vacate of Donsol in 1963. However, after the conflagration. Ciriaco was
◦ dismissed CFI able to construct his own house but already on Lot 3. Considering
◦ declaring the petitioners as the lawful owners of the the long and uninterrupted possession of Ciriaco Pacheco under
disputed property claim of ownership starting from 1939 up to the present, it is
▪ prescription believed that he has acquired Lot 3 as well as Lot 4 by
• appealed to the CA - reversed acquisitive prescription.".
◦ acquisitive prescription was untenable because their
possession of the property in dispute was interrupted The above finding was not disputed by Ciriaco Pacheco and
when the Philippine National Bank acquired it at the Estrella Razo-Rey. In fact, they impliedly agreed with the trial
foreclosure sale in 1959 and held it for one year before it court that they had acquired the disputed property by virtue of
was repurchased by Rafael Pacheco prescription and thereafter kept silent about the alleged sale.
◦ not having registered his opposition to the attachment and Although it was only the purchase made by Benvenuto Abitria which
execution sale of the lots he was claiming as his own the trial court held as valid and binding, the other two petitioners did
not challenge its ruling insofar as it impliedly rejected their own
claim of purchase. Having failed to do so, they are now estopped
from asserting that they had bought the lands they are now Although both the trial court and respondent court accepted the
claiming. petitioner’s claim of such a sale, the subject thereof was, however,
not positively identified. The land purchased by Rafael from Ciriano
The respondent court held that as the land was acquired in the Pacheco was covered by Tax Declaration No. 12490 with an area of
foreclosure proceedings by the PNB in 1959, the ten-year period 4,698 square meters, and in his name. On the other hand, the land
of acquisitive prescription was not completed. 14 As a foreclosed by the bank, which Ciriaco’s father later repurchased and
consequence of the cut-off caused by the take-over of the land by the then sold to him, was covered by Tax Declaration No. 3431 with an
bank, Rafael Pacheco ceased to be the possessor of the property area of 1,170 square meters, and in the name of Rafael Pacheco. It
for more than one year and the period of prescription was thus was not show by Ciriaco that Tax Declaration No. 3431 revised in
interrupted. 15 The applicable provision is Article 1121 of the Civil part or in whole Tax Declaration No. 12490. Nevertheless, whether
Code, reading as follows: or not the subject of the sale was the land in dispute, it was clearly
"Art. 1121. Possession is naturally interrupted when through any established that Rafael Pacheco started occupying the same since
cause it should cease for more than one year."The old possession is 1939 and that his possession was public, open, peaceful,
not revived if a new possession should be exercised by the same continuous, uninterrupted, adverse and in the concept of owner
adverse claimant."cralaw virtua1aw library until and even beyond 1949. After ten years of such possession,
acquisitive prescriptive title was vested in Rafael Pacheco, pursuant
Briefly stated then, the argument of the private respondents runs as to Article 1134 of the Civil Code. Consequently, when he
follows: Rafael Pacheco repurchased the land in question from the mortgaged the land to the PNB, he did so not as a mere possessor
PNB on April 20, 1960. Since Ciriaco Pacheco derived his title from but as an owner by virtue of prescription under Article 1134 of
Rafael Pacheco, the latter’s possession from April 20, 1960 up to the Civil code. Article 1121 could no longer apply to him because
September 7, 1964, when the land was sold to the former, could be the ten-year prescriptive period had already been completed at
tacked to the possession taken over by Ciriaco Pacheco when he the time.
bought the land. However, his total possession did not ripen into
acquisitive title because the ten-year prescriptive period was not It follows that when Rafael Pacheco sold the land to Ciriano
completed. Reckoned from April 20, 1960, when Rafael Pacheco Pacheco, the latter acquired the rights of the former as owner of
repurchased the land from the Philippine National Bank, the period the property, and not as a mere possessor thereof, and so did the
would have been completed on April 20, 1970. The trouble is that on other petitioners who derived their title from Ciriaco Pacheco.
December 2, 1969, before prescription could set in, the complaint
for the recovery of the land was filed by the private respondents, The rule in execution sales is that an execution creditor acquires
thus interrupting the running of the period. 16 no higher or better right than what the execution debtor has in
the property levied upon. The purchaser of property on sale under
This argument, however, has not taken into account an earlier the execution and levy takes as assignee only, as the judicial seller
possession, to wit, that of Rafael Pacheco also, but beginning 1939, possesses no title other than that which would pass by an
when he bought the land in question from Emiliano Pacheco. 17 assignment by the owner. "An execution purchaser generally
acquires such estate or interest as was vested in the execution
debtor at the time of the seizure on execution, and only such
interest, taking merely a quit-claim of the execution debtor’s title,
without warranty on the part of either the execution officer or of the
parties, whether the property is realty or personality. This rule
prevails even if a larger interest in the property was intended to be
sold. Accordingly, if the judgment debtor had no interest in the
property, the execution purchaser acquires no interest therein."
20
Napocor vs. Gonong, 1989
Applying the above principles, we hold that the judgment sale in Facts:
favor of private respondent Hernandez did not and could not 1. The case has been instituted by Allied Control and Electric
cover the lands claimed by the petitioners as these lots no longer Corporation (ACEC) to recover sum of money against Batong
belonged to the judgment debtor when they were levied upon Buhay Gold Mines, Inc. (BBGMI), in which judgment was
and sold. That sale covered only the lands still under the ownership ordered against BBGMI to pay ACEC its indebtedness;
of the judgment debtor and did not affect the ownership of the 2. However, attempt for execution failed. Hence, ACEC filed
property titled in the name of the herein petitioners. None of them an Ex-Parte Motion for Examination of Debtor of Judgment
was a party to the civil case brought by the private respondent Debtor, alleging that NPC was a debtor of BBGMI;
against Emiliano Pacheco. 3. Judge Gonong, then summoned Mr. Viroya, Manager of
NPC General Accounts Division, and from his statement it was
Finally, as to the effect of Abitria’s failure to oppose the sale of this found out that: NAPOCOR and BBGMI entered into an
land in 1963 to enforce the judgment against Emiliano Pacheco, it agreement, in which BBGMI will financed the construction of
suffices to point out that under Rule 39, Section 17, of the Rules of the line connecting their mining site to the lines of NPC. In exchange
Court, the claimant who does not file a third party claim to the NPC is going to reimburse BBGMI the amount spent to said
property being levied upon is not prevented "from vindicating construction by crediting 25% of latter’s monthly bill. However,
his claims to the property by any other action." Hence, Abitria is BBGMI ceased its operation leaving a balance of P18,947,623.06
not precluded now from asserting in the present petition his claim of which is still due to defendant (but Vinoya testified that it not due
ownership over the disputed property. to BBGMI but balance made by BBGMI in the construction of
the power lines);
WHEREFORE, the decision of the respondent court dated April 19, 4. Judge Gonong then direct the NPC to pay ACEC, out of its
1978, is REVERSED and that of the trial court dated July 25, 1975 remaining credit NPC held in favor of BBGMI and further directed
is REINSTATED. Costs against the private respondents. Sheriff Adriano to garnish and attach said credit
Basis: Sec 15, Rule 39 authorizing sheriff charged w/ execution to
SO ORDERED. levy on debts and credits in addition to real property, stocks, shares
and other personal property or any interest in either real or personal
property;
5. NPC filed a Manifestation alleging that:
a. Court has no jurisdiction to issue the assailed order, since they judgment of another, would be to deprive the garnishee of property
were never a party in the said civil case: upon summary proceeding and w/out due process of law.
b. NPC was not in possession of any property belonging to
BBGMI nor does BBGMI have any receivable from NPC;
6. No action was taken by Judge Gonong in response to such
Manifestation (Motion to Set Aside the Order);
7. Hence this present action of certiorari;
Issue: WON, Judge Gonong act with grave abuse of discretion Conflicts Of Law Case Digest: Northwest Orient Airlines, Inc. V.
tantamount to lack of jurisdiction when it ordered the garnishment of CA (1995)
NPC’s property.
Held: YES!!!
1. It is within Judge Gonong prerogative to require the G.R. No. 112573 February 9, 1995
appearance, by subpoena, of officials of NPC to appear and be Lessons Applicable: Territoriality Principle (conflicts of law)
questioned regarding the latter’s claimed indebtedness to BBGMI,
HOWEVER, it was not within his power to order the payment of FACTS:
alleged debtor of the judgment debtor to pay the claimed debt • Northwest Airlines (Northwest) and C.F. Sharp & Company
without indubitable admission or conclusive proof that that the (C.F.), through its Japan branch, entered into an
debt existed and was demandable; International Passenger Sales Agency Agreement,
2. Sec. 15, Rule 39 is not applicable in this case (procedure that whereby the Northwest authorized the C.F. to sell its air
the sheriff would follow in enforcing money judgment against debtor transportation tickets
himself). Applicable provisions are Sec 42 and 45 of same rule • March 25, 1980: Unable to remit the proceeds of the ticket
which provides that “after summary examination of a person or sales, Northwest sued C.F. in Tokyo, Japan, for collection
entity alleged to be a debtor of the judgment debtor or holding of the unremitted proceeds of the ticket sales, with claim for
property belonging to the latter … execution may issue against damages
such person or entity only upon an incontrovertible showing that • April 11, 1980: writ of summons was issued by the 36th
the person or entity in fact holds property belonging to the Civil Department, Tokyo District Court of Japan
judgment debtor or indeed a debtor of said judgment debtor. • The attempt to serve the summons was unsuccessful
3. In Economic Insurance Co., Inc vs. Torres, the Court ruled that the because Mr. Dinozo was in Manila and would be back on
only power of the Court in proceedings supplemental to April 24, 1980
execution is to make an order authorizing the creditor to sue in • April 24, 1980: Mr. Dinozo returned to C.F. Office to serve
the proper court to recover indebtedness due to a judgment the summons but he refused to receive claiming that he no
debtor. The Court has no jurisdiction to try summarily the longer an employee
question whether the 3rd party served with notice of execution and • After the 2 attempts of service were unsuccessful, Supreme
levy is indebted to defendant when such indebtedness is denied. To
Court of Japan sent the summons together with the other
make an order in relation to property which the garnishee claimed to
legal documents to the Ministry of Foreign Affairs of
own on his own right, requiring its application in satisfaction of
Japan> Japanese Embassy in Manila>Ministry (now ISSUE: W/N the Japanese Court has jurisdiction over C.F.
Department) of Foreign Affairs of the
Philippines>Executive Judge of the Court of First HELD: YES. instant petition is partly GRANTED, and the
Instance (now Regional Trial Court) of Manila who challenged decision is AFFIRMED insofar as it denied
ordered Deputy Sheriff Rolando Balingit>C.F. Main NORTHWEST's claims for attorneys fees, litigation expenses, and
Office exemplary damages
• August 28, 1980: C.F. received from Deputy Sheriff Consequently, the party attacking (C.F.) a foreign judgment has the
Rolando Balingit the writ of summons but failed to appear burden of overcoming the presumption of its validity
at the scheduled hearing. Accordingly, the presumption of validity and regularity of the
• January 29, 1981: Tokyo Court rendered judgment service of summons and the decision thereafter rendered by the
ordering the C.F. to pay 83,158,195 Yen and damages for Japanese court must stand.
delay at the rate of 6% per annum from August 28, 1980 up
to and until payment is completed Under Section 50, Rule 39 of the Rules of Court, a judgment in an
• March 24, 1981: C.F. received from Deputy Sheriff action in personam of a tribunal of a foreign country having
Balingit copy of the judgment. C.F. did not appeal so it jurisdiction to pronounce the same is presumptive evidence of a
became final and executory right as between the parties and their successors-in-interest by a
• May 20, 1983: Northwest filed a suit for enforcement of subsequent title. The judgment may, however, be assailed by
the judgment a RTC evidence of want of jurisdiction, want of notice to the party,
• July 16, 1983: C.F. averred that the Japanese Court sought to collusion, fraud, or clear mistake of law or fact. Also, under Section
be enforced is null and void and unenforceable in this 3 of Rule 131, a court, whether of the Philippines or elsewhere,
jurisdiction having been rendered without due and proper enjoys the presumption that it was acting in the lawful exercise of
notice and/or with collusion or fraud and/or upon a clear jurisdiction and has regularly performed its official duty.
mistake of law and fact. The foreign judgment in the
Japanese Court sought in this action is null and void for Applying it, the Japanese law on the matter is presumed to be
want of jurisdiction over the person of the defendant similar with the Philippine law on service of summons on a private
considering that this is an action in personam. The foreign corporation doing business in the Philippines. Section 14,
process of the Court in Japan sent to the Philippines which is Rule 14 of the Rules of Court provides that if the defendant is a
outside Japanese jurisdiction cannot confer jurisdiction over foreign corporation doing business in the Philippines, service may be
the defendant in the case before the Japanese Court of the made:
case at bar (1) on its resident agent designated in accordance with law for that
• CA sustained RTC: Court agrees that if the C.F. in a foreign purpose, or,
(2) if there is no such resident agent, on the government official
court is a resident in the court of that foreign court such court
designated by law to that effect; or
could acquire jurisdiction over the person of C.F. but it must
(3) on any of its officers or agents within the Philippines.
be served in the territorial jurisdiction of the foreign court
If the foreign corporation has designated an agent to receive
summons, the designation is exclusive, and service of summons is
without force and gives the court no jurisdiction unless made upon but also because of the presumption of regularity of performance of
him. official duty.
Where the corporation has no such agent, service shall be made on
the government official designated by law, to wit:
(a) the Insurance Commissioner in the case of a foreign insurance
company
(b) the Superintendent of Banks, in the case of a foreign banking ASIAVEST
corporation 361 SCRA 489 – Conflict of Laws – Private International Law –
(c) the Securities and Exchange Commission, in the case of other Foreign Judgments – How Assailed
foreign corporations duly licensed to do business in the Philippines.
Whenever service of process is so made, the government office or In 1985, the High Court of Malaysia ordered the Philippine
official served shall transmit by mail a copy of the summons or other National Construction Corporation (PNCC) to pay $5.1 million
legal proccess to the corporation at its home or principal office. The to Asiavest Merchant Bankers (M) Berhad. This was the result of a
sending of such copy is a necessary part of the service. recovery suit filed by Asiavest against PNCC in Malaysia for
PNCC’s failure to complete a construction project there despite due
The service on the proper government official under Section 14, payment from Asiavest. Despite demand, PNCC failed to comply
Rule 14 of the Rules of Court, in relation to Section 128 of the with the judgment in Malaysia hence Asiavest filed a complaint
Corporation Code for the enforcement of the Malaysian ruling against PNCC in the
Our laws and jurisprudence indicate a purpose to assimilate foreign Philippines. The case was filed with the Pasig RTC which
corporations, duly licensed to do business here, to the status of eventually denied the complaint. The Court of Appeals affirmed
domestic corporations the decision of the RTC.
We think it would be entirely out of line with this policy should we
make a discrimination against a foreign corporation, like the Asiavest appealed. In its defense, PNCC alleged that the foreign
petitioner, and subject its property to the harsh writ of seizure by judgment cannot be enforced here because of want of
attachment when it has complied not only with every requirement of jurisdiction, want of notice to PNCC, collusion and/or fraud, and
law made specially of foreign corporations, but in addition with there is a clear mistake of law or fact. Asiavest assailed the
every requirement of law made of domestic corporations arguments of PNCC on the ground that PNCC’s counsel participated
In as much as SHARP was admittedly doing business in Japan in all the proceedings in the Malaysian Court.
through its four duly registered branches at the time the collection
suit against it was filed, then in the light of the processual ISSUE: Whether or not the Malaysian Court judgment should be
presumption, SHARP may be deemed a resident of Japan, and, as enforced against PNCC in the Philippines.
such, was amenable to the jurisdiction of the courts therein and may
be deemed to have assented to the said courts' lawful methods of HELD: Yes. PNCC failed to prove and substantiate its bare
serving process. allegations of want of jurisdiction, want of notice, collusion and/or
Accordingly, the extraterritorial service of summons on it by the fraud, and mistake of fact. On the contrary, Asiavest was able to
Japanese Court was valid not only under the processual presumption present evidence as to the validity of the proceedings that took place
in Malaysia. Asiavest presented the certified and authenticated offered. Vinayak Prabhakar Pradhan, presented as petitioner’s sole
copies of the judgment and the order issued by the Malaysian Court. witness, testified to the effect that he is in active practice of the law
It also presented correspondences between Asiavest’s lawyers and profession in Malaysia; 17 that he was connected with Skrine and
PNCC’s lawyers in and out of court which belied PNCC’s allegation Company as Legal Assistant up to 1981; that private respondent,
that the Malaysian court never acquired jurisdiction over it. PNCC’s then known as Construction and Development Corporation of the
allegation of fraud is not sufficient too, further, it never invoked Philippines, was sued by his client, Asiavest Merchant Bankers (M)
the same in the Malaysian Court. Berhad, in Kuala Lumpur; 19 that the writ of summons were served
on March 17, 1983 at the registered office of private respondent and
The Supreme Court notes, to assail a foreign judgment the party on March 21, 1983 on Cora S. Deala, a financial planning officer of
must present evidence of want of jurisdiction, want of notice to private respondent for Southeast Asia operations; 20 that upon the
the party, collusion, fraud, or clear mistake of law or fact. filing of the case, Messrs. Allen and Gledhill, Advocates and
Otherwise, the judgment enjoys the presumption of validity so Solicitors, with address at 24th Floor, UMBC Building, Jalan
long as it was duly certified and authenticated. In this case, PNCC Sulaiman, Kuala Lumpur, entered their conditional appearance for
failed to present the required evidence. private respondent questioning the regularity of the service of the
writ of summons but subsequently withdrew the same when it
A foreign judgment is presumed to be valid and binding in the realized that the writ was properly served; 21 that because private
country from which it comes, until a contrary showing, on the respondent failed to file a statement of defense within two (2) weeks,
basis of a presumption of regularity of proceedings and the petitioner filed an application for summary judgment and submitted
giving of due notice in the foreign forum Under Section 50(b),16 affidavits and documentary evidence in support of its claim; 22 that
Rule 39 of the Revised Rules of Court, which was the governing law the matter was then heard before the High Court of Kuala Lumpur in
at the time the instant case was decided by the trial court and a series of dates where private respondent was represented by
respondent appellate court, a judgment, against a person, of a counsel; 23 and that the end result of all these proceedings is the
tribunal of a foreign country having jurisdiction to pronounce the judgment sought to be enforced.
same is presumptive evidence of a right as between the parties and
their successors in interest by a subsequent title. The judgment may, Garcia-Recio vs. Recio
however, be assailed by evidence of want of jurisdiction, want of TITLE: Grace J. Garcia-Recio v Rederick A. Recio
notice to the party, collusion, fraud, or clear mistake of law or fact. CITATION: GR NO. 138322, Oct. 2, 2002 | 366 SCRA 437
In addition, under Section 3(n), Rule 131 of the Revised Rules of
Court, a court, whether in the Philippines or elsewhere, enjoys the FACTS:
presumption that it was acting in the lawful exercise of its
jurisdiction. Hence, once the authenticity of the foreign judgment is Rederick A. Recio, a Filipino, was married to Editha Samson, an
proved, the party attacking a foreign judgment, is tasked with the Australian Citizen, in Malabon, Rizal on March 1, 1987. They
burden of overcoming its presumptive validity. lived as husband and wife in Australia. However, an Australian
family court issued purportedly a decree of divorce, dissolving
In the instant case, petitioner sufficiently established the existence of the marriage of Rederick and Editha on May 18, 1989.
the money judgment of the High Court of Malaya by the evidence it
On January 12, 1994, Rederick married Grace J. Garcia where it (2) a copy thereof attested by the officer having legal custody of the
was solemnized at Our lady of Perpetual Help Church, Cabanatuan document. If the record is not kept in the Philippines, such copy
City. Since October 22, 1995, the couple lived separately without must be:
prior judicial dissolution of their marriage. As a matter of fact, while (a) accompanied by a certificate issued by the proper diplomatic or
they were still in Australia, their conjugal assets were divided on consular officer in the Philippine foreign service stationed in the
May 16, 1996, in accordance with their Statutory Declarations foreign country in which the record is kept and
secured in Australia. (b) authenticated by the seal of his office.
Thus, the Supreme Court remands the case to the Regional Trial
Grace filed a Complaint for Declaration of Nullity of Marriage Court of Cabanatuan City to receive or trial evidence that will
on the ground of bigamy on March 3, 1998, claiming that she conclusively prove respondent’s legal capacity to marry petitioner
learned only in November 1997, Rederick’s marriage with Editha and thus free him on the ground of bigamy.
Samson.
We also reject the claim of respondent that the divorce decree raises
a disputable presumption or presumptive evidence as to his civil
ISSUE: Whether the decree of divorce submitted by Rederick status based on Section 48, Rule 39[49] of the Rules of Court, for
Recio is admissible as evidence to prove his legal capacity to the simple reason that no proof has been presented on the legal
marry petitioner and absolved him of bigamy. effects of the divorce decree obtained under Australian laws.

Case Digest: Roehr v. Rodriguez


HELD: WOLFGANG O. ROEHR, petitioner, vs. MARIA CARMEN D.
RODRIGUEZ, HON. JUDGE JOSEFINA GUEVARA-SALONGA,
The nullity of Rederick’s marriage with Editha as shown by the Presiding Judge of Makati RTC, Branch 149, respondents.
divorce decree issued was valid and recognized in the Philippines G.R. No. 142820, June 20, 2003
since the respondent is a naturalized Australian. However, there is
absolutely no evidence that proves respondent’s legal capacity to
marry petitioner though the former presented a divorce decree. QUISUMBING, J.:
The said decree, being a foreign document was inadmissible to
court as evidence primarily because it was not authenticated by Petitioner Wolfgang O. Roehr, a German citizen, married private
the consul/ embassy of the country where it will be used. respondent Carmen Rodriguez, a Filipina, on December 11, 1980
in Germany. Their marriage was subsequently ratified on
Under Sections 24 and 25 of Rule 132, a writing or document may February 14, 1981 in Tayasan, Negros Oriental. Out of their union
be proven as a public or official record of a foreign country by were born Carolynne and Alexandra Kristine.
either:
(1) an official publication or Carmen filed a petition for declaration of nullity of marriage
before the Makati Regional Trial Court (RTC). Wolfgang filed a
motion to dismiss, but it was denied.
Meanwhile, Wolfgang obtained a decree of divorce from the Ruling: Yes.
Court of First Instance of Hamburg-Blankenese. Said decree also
provides that the parental custody of the children should be As a general rule, divorce decrees obtained by foreigners in other
vested to Wolfgang. countries are recognizable in our jurisdiction. But the legal effects
thereof, e.g. on custody, care and support of the children, must
Wolfgang filed another motion to dismiss for lack of jurisdiction still be determined by our courts.
as a divorce decree had already been promulgated, and said
motion was granted by Public Respondent RTC Judge Salonga. Before our courts can give the effect of res judicata to a foreign
judgment, such as the award of custody to Wolfgang by the German
Carmen filed a Motion for Partial Reconsideration, with a prayer court, it must be shown that the parties opposed to the judgment
that the case proceed for the purpose of determining the issues of had been given ample opportunity to do so on grounds allowed
custody of children and the distribution of the properties between her under Rule 39, Section 50 of the Rules of Court (now Rule 39,
and Wolfgang. Judge Salonga partially set aside her previous Section 48, 1997 Rules of Civil Procedure).
order for the purpose of tackling the issues of support and
custody of their children. In the present case, it cannot be said that private respondent was
given the opportunity to challenge the judgment of the German
1st Issue: W/N Judge Salonga was correct in granting a partial court so that there is basis for declaring that judgment as res
motion for reconsideration. judicata with regard to the rights of Wolfgang to have parental
custody of their two children. The proceedings in the German
Ruling: Yes. court were summary. As to what was the extent of Carmen’s
participation in the proceedings in the German court, the
A judge can order a partial reconsideration of a case that has not records remain unclear.
yet attained finality, as in the case at bar.
Absent any finding that private respondent is unfit to obtain
The Supreme Court goes further to say that the court can modify or custody of the children, the trial court was correct in setting the
alter a judgment even after the same has become executory issue for hearing to determine the issue of parental custody, care,
whenever circumstances transpire rendering its decision unjust and support and education mindful of the best interests of the children.
inequitable, as where certain facts and circumstances justifying or
requiring such modification or alteration transpired after the General rule: divorce decrees obtained by foreigners in other
judgment has become final and executory and when it becomes countries are recognizable in our jurisdiction, but the legal effects
imperative in the higher interest of justice or when supervening thereof, e.g. on custody, care and support of the children, must still
events warrant it. be determined by our courts. Before our courts can give the effect of
res judicata to a foreign judgment, such as the award of custody to
2nd issue: W/N Judge Salonga's act was valid when she assumed petitioner by the German court, it must be shown that the parties
and retained jurisdiction as regards child custody and support. opposed to the judgment had been given ample opportunity to do so
on grounds allowed under Rule 39, Section 50 of the Rules of Court Petitioner Corpuz, a naturalized Canadian citizen married
(now Rule 39, Section 48, 1997 Rules of Civil Procedure), to wit: respondent Sto. Tomas but subsequently filed for divorce in
Canada which was granted by the Court Justice of Windsor,
Essential: opportunity to challenge the foreign judgment, in order for Ontario, Canada. Two years later, Corpuz fell in love with another
the court in this jurisdiction to properly determine its efficacy. In this Filipina. He went to Civil Registry Office of Pasig City to register
jurisdiction, our Rules of Court clearly provide that with respect to the Canadian divorce decree on his marriage certificate with Sto.
actions in personam, as distinguished from actions in rem, a foreign Tomas. However, despite the registration, an official of National
judgment merely constitutes prima facie evidence of the justness of Statistics Office informed Corpuz that the former marriage still
the claim of a party and, as such, is subject to proof to the contrary. subsists under the Philippine law until there has been a judicial
recognition of the Canadian divorce decree by a competent judicial
CAB - it cannot be said that private respondent was given the court in view of NSO Circular No. 4, series of 1982.
opportunity to challenge the judgment of the German court so that
there is basis for declaring that judgment as res judicata with regard Consequently, he filed a petition for judicial recognition of foreign
to the rights of petitioner to have parental custody of their two divorce and/or declaration of dissolution of marriage with the RTC.
children. The proceedings in the German court were summary. As to However, the RTC denied the petition reasoning out that Corpuz
what was the extent of private respondent’s participation in the cannot institute the action for judicial recognition of the foreign
proceedings in the German court, the records remain unclear. The divorce decree because he is a naturalized Canadian citizen. It was
divorce decree itself states that neither has she commented on the provided further that Sto. Tomas was the proper party who can
proceedings25 nor has she given her opinion to the Social Services institute an action under the principle of Article 26 of the Family
Office.26 Unlike petitioner who was represented by two lawyers, Code which capacitates a Filipino citizen to remarry in case the alien
private respondent had no counsel to assist her in said spouse obtains a foreign divorce decree. Hence, this petition.
proceedings.27 More importantly, the divorce judgment was issued
to petitioner by virtue of the German Civil Code provision to the ISSUE:
effect that when a couple lived separately for three years, the Whether the second paragraph of Article 26 of the Family Code
marriage is deemed irrefutably dissolved. The decree did not touch grant aliens the right to institute a petition for judicial
on the issue as to who the offending spouse was. Absent any finding recognition of a foreign divorce decree.
that private respondent is unfit to obtain custody of the children, the
trial court was correct in setting the issue for hearing to determine RESOLUTION:
the issue of parental custody, care, support and education mindful of No. The second paragraph of Article 26 of the Family Code bestows
the best interests of the children. This is in consonance with the no rights in favor of aliens BUT the foreign divorce decree
provision in the Child and Youth Welfare Code that the child’s obtained by such alien, may be proven in court and recognized
welfare is always the paramount consideration in all questions according to our rules of evidence. Thus, it serves as a
concerning his care and custody. presumptive evidence of right in favor of the alien, pursuant to
Section 48, Rule 39 of the Rules of Court which provides for the
CORPUZ VS STO TOMAS effect of foreign judgments.
FACTS:
Dotrine: that the foreign judgment and its authenticity must be proven as
The foreign divorce decree is presumptive evidence of a right facts under our rules on evidence, together with the aliens
that clothes the party with legal interest to petition for its applicable national law to show the effect of the judgment on the
recognition in this jurisdiction alien himself or herself.[29] The recognition may be made in an
action instituted specifically for the purpose or in another action
We qualify our above conclusion i.e., that the second paragraph of where a party invokes the foreign decree as an integral aspect of his
Article 26 of the Family Code bestows no rights in favor of aliens claim or defense.
with the complementary statement that this conclusion is not
sufficient basis to dismiss Gerberts petition before the RTC. In other In Gerberts case, since both the foreign divorce decree and the
words, the unavailability of the second paragraph of Article 26 of national law of the alien, recognizing his or her capacity to
the Family Code to aliens does not necessarily strip Gerbert of obtain a divorce, purport to be official acts of a sovereign authority,
legal interest to petition the RTC for the recognition of his Section 24, Rule 132 of the Rules of Court comes into play. This
foreign divorce decree. The foreign divorce decree itself, after its Section requires proof, either by (1) official publications or (2)
authenticity and conformity with the aliens national law have been copies attested by the officer having legal custody of the documents.
duly proven according to our rules of evidence, serves as a If the copies of official records are not kept in the Philippines, these
presumptive evidence of right in favor of Gerbert, pursuant to must be (a) accompanied by a certificate issued by the proper
Section 48, Rule 39 of the Rules of Court which provides for the diplomatic or consular officer in the Philippine foreign service
effect of foreign judgments. This Section states:xxx stationed in the foreign country in which the record is kept and (b)
authenticated by the seal of his office.
In either case, the judgment or final order may be repelled by
evidence of a want of jurisdiction, want of notice to the party, The records show that Gerbert attached to his petition a copy of
collusion, fraud, or clear mistake of law or fact. the divorce decree, as well as the required certificates proving its
authenticity,[30] but failed to include a copy of the Canadian law
To our mind, direct involvement or being the subject of the on divorce.[31] Under this situation, we can, at this point, simply
foreign judgment is sufficient to clothe a party with the requisite dismiss the petition for insufficiency of supporting evidence, unless
interest to institute an action before our courts for the we deem it more appropriate to remand the case to the RTC to
recognition of the foreign judgment. In a divorce situation, we determine whether the divorce decree is consistent with the
have declared, no less, that the divorce obtained by an alien abroad Canadian divorce law.
may be recognized in the Philippines, provided the divorce is valid
according to his or her national law. We deem it more appropriate to take this latter course of
action(remand), given the Article 26 interests that will be served
The starting point in any recognition of a foreign divorce judgment and the Filipina wifes (Daisylyns) obvious conformity with the
is the acknowledgment that our courts do not take judicial notice of petition. A remand, at the same time, will allow other interested
foreign judgments and laws. Justice Herrera explained that, as a rule, parties to oppose the foreign judgment and overcome a petitioners
no sovereign is bound to give effect within its dominion to a presumptive evidence of a right by proving want of jurisdiction,
judgment rendered by a tribunal of another country.[28] This means want of notice to a party, collusion, fraud, or clear mistake of law or
fact. Needless to state, every precaution must be taken to ensure
conformity with our laws before a recognition is made, as the Collection Suit
foreign judgment, once recognized, shall have the effect of res • court granted Allied Banks application for attachment and
judicata[32] between the parties, as provided in Section 48, Rule 39 fixed the amount of the attachment bond
of the Rules of Court.[33] • Allied failed to submit an attachment bond and instead
In fact, more than the principle of comity that is served by the moved that the service of the summons upon petitioner be
practice of reciprocal recognition of foreign judgments between held in abeyance.
nations, the res judicata effect of the foreign judgments of divorce • Archived – revived
serves as the deeper basis for extending judicial recognition and for • respondent moved for the suspension of the proceedings
considering the alien spouse bound by its terms. This same effect, as ◦ citing the pendency of Criminal Case
discussed above, will not obtain for the Filipino spouse were it not
for the substantive rule that the second paragraph of Article 26 of the RTC of Davao City (annulment of said Deed of Sale)
Family Code provides. • Deed of Sale with Assumption of Mortgage valid
• Allied appealed – CA – dismissed when collection suit
REYNANTE TADEJA, RICKY TADEJA, RICARDO TADEJA
and FERDINAND TADEJA, Petitioners, v. PEOPLE OF THE reached SC
PHILIPPINES, Respondents.
RTC (Collection suit)
OROPEZA (petition for review) • , dismissed respondents complaint on the ground of litis
(Allied Bank, for brevity) extended a loan pendentia,
• to petitioners Oropeza Marketing Corporation (OMC) and • CA – reversed
the spouses Rogaciano and Imelda[3] Oropeza
• executed Promissory Note in Allied Banks favor ISSUE: Does the decision of the Court of Appeals in CA-G.R. CV
• executed a Real Estate Mortgage No. 41986 constitute res judicata insofar as Civil Case No. 19325-88
is concerned? More succinctly stated, is there identity of parties,
subject matter, and causes of action between the two civil cases?
Allied Bank
• filed a collection suit[8] with an application for a writ of
SC:
preliminary attachment Petitioners: res judicata
• discovered that the Oropeza spouses had executed an Respondents: no identity of rights asserted in the two civil cases - -
Absolute Deed of Sale with Assumption of Mortgage in Civil Case No. 19634-89 is for annulment of deed of sale with
favor of Solid Gold Commercial Corporation assumption of mortgage, while the Civil Case No. 19325-88 is for
• filed a complaint for the annulment of said Deed of Sale – collection of a sum of money.
RTC
• instituted a separate criminal complaint for fraudulent
insolvency Res judicata literally means a matter adjudged;
the first three requisites is not disputed. With respect to the
The principle of res judicata has two aspects, namely: fourth element, however, the parties disagree. We must, therefore,
(a) bar by prior judgment as enunciated in Rule 39, Section 49 (b) of focus now on whether identity of parties, subject matter, and causes
the 1997 Rules of Civil Procedure; and of action are present in the two civil cases below. Should identity of
(b) conclusiveness of judgment which is contained in Rule 39, parties, subject matter, and causes of action be shown in the two
Section 47 (c) cases, then res judicata in its aspect as a bar by prior judgment would
apply.
There is bar by prior judgment(a) when, as between the first case
where the judgment was rendered and the second case that is sought Coming now to the identity of parties in Civil Case No. 19325-88
to be barred, there is identity of parties, subject matter, and causes of and Civil Case No. 19634-89 (and CA-G.R. CV No. 41986, for that
action. In this instance, the judgment in the first case constitutes an matter), respondent Allied Bank contends that since OMC was not
absolute bar to the second action. Otherwise put, the judgment or impleaded in Civil Case No. 19634-89, the finality of the judgment
decree of the court of competent jurisdiction on the merits concludes in CA-G.R. CV No. 41986 will not bind OMC. Neither the trial
the litigation between the parties, as well as their privies, and court in Civil Case No. 19634-89 nor the appellate court in CA-G.R.
constitutes a bar to a new action or suit involving the same cause of CV No. 41986 acquired jurisdiction over OMC, according to Allied
action before the same or any other tribunal. Bank.

But where there is identity of parties in the first and second cases, But we note that respondent Allied Bank was the plaintiff in both
but no identity of causes of action, the first judgment is conclusive Civil Case No. 19325-88 and Civil Case No. 19634-89, while the
only as to those matters actually and directly controverted and Oropeza spouses were among the defendants in both cases. We also
determined and not as to matters merely involved therein. This is note that Allied Bank was the appellant in CA-G.R. CV No. 41986,
the concept of res judicata known as conclusiveness of where the Oropezas were included as appellees. The rule on identity
judgment(b). Stated differently, any right, fact, or matter in issue of parties does not require absolute, but only substantial identity of
directly adjudicated or necessarily involved in the determination of parties.
an action before a competent court in which judgment is rendered on
the merits is conclusively settled by the judgment therein and cannot In other words, the fact that OMC was not a party in Civil Case
again be litigated between the parties and their privies whether or not No. 19634-89 and CA-G.R. CV No. 41986, does not nullify the
the claim, demand, purpose, or subject matter of the two actions is effect of the judgments issued in these cases on the other case,
the same. Civil Case No. 19325-88.

The elements of res judicata are: (1) the judgment sought to bar the With respect to identity of subject matter, this is included in
new action must be final; (2) the decision must have been rendered identity of causes of action. When there is identity of the cause or
by a court having jurisdiction over the subject matter and the parties; causes of action, there is necessarily identity of subject matter. But
(3) the disposition of the case must be a judgment on the merits; and the converse is not true, for different causes of action may exist
(4) there must be as between the first and second action, identity of regarding the same subject matter, in which case, the conclusiveness
parties, subject matter, and causes of action. The existence here of
of judgment shall be only with regard to the questions directly and respective causes of action in the two cases is not exactly the
actually put in issue and decided in the first case.[32] same. Perforce, we must rule that there is no identity between the
causes of action in Civil Case No. 19325-88 and Civil Case No.
A cause of action is an act or omission of one party in violation of 19634-89.
the legal right of the other that causes the latter injury.[33] It is
determined not by the prayer of the complaint but by the facts There being substantial identity of parties but no identity of
alleged. The first case, Civil Case No. 19325-88, was for the causes of action, the applicable aspect of res judicata in the
collection of the P780,000.00 loan, secured by a promissory note, instant case is conclusiveness of judgment. There is
which respondent Allied Bank insists remained unpaid by the conclusiveness of judgment only as to the matters actually
petitioners. In other words, it is the alleged failure of petitioners to determined by the trial court in Civil Case No. 19634-89, as
liquidate their obligation to respondent bank, which caused affirmed by the Court of Appeals in CA-G.R. CV No. 41986. These
Allied Banks cause of action in Civil Case No. 19325-88 to accrue. include the findings that: (1) the promissory note relied upon by
The situation is different in the other case, Civil Case No. 19634- respondent bank is spurious; and (2) that the loan obligation of
89, where respondent bank asserts its right as a mortgagee to the the Oropeza spouses has been settled and paid.
subject property by virtue of the real estate mortgage executed
by petitioner spouses in its favor. Allied Bank averred that the Res judicata is founded on the principle that parties ought not to be
Oropeza spouses executed a real estate mortgage over their permitted to litigate the same issue more than once. Hence, when a
properties to secure their loan. Respondent alleged that the Oropezas right or fact has been judicially tried and established by a court of
then sold said properties to Solid Gold Commercial Corporation, competent jurisdiction, or an opportunity for such trial has been
with intent to defraud respondent bank. Hence, respondent was given, the judgment of the court - - so long as it remains unreversed -
forced to file suit to annul the deed of sale over the mortgaged - is conclusive upon the parties and those in privity with them in law
properties. It is apparent that alleged violations of respondents or estate.[36] It having been determined with finality in CA-G.R. CV
legal rights by petitioners differ, as the acts or omissions No. 41986 that the debt of the Oropezas has been settled,
complained of the two civil cases, basing on the recitation of respondents cause of action in Civil Case No. 19325-88 must be
their facts which are different. deemed extinguished.

The test to determine the identity of causes of action is to consider WHEREFORE, the petition is GRANTED. The decision of the
whether the same evidence would sustain both causes of action.[35] Court of Appeals, dated March 13, 1997 in CA-G.R. CV No. 47775
as well as its resolution of June 13, 1997 denying herein petitioners
The evidence to support Allied Banks cause of action in Civil motion for reconsideration are hereby SET ASIDE. The findings of
Case No. 19325-88 is included in and forms part of the evidence the Regional Trial Court of Davao City, Branch 9 in Civil Case No.
needed by respondent bank to support its cause of action in Civil 19634-89, as affirmed by the appellate court in CA-G.R. CV No.
Case No. 19634-89. The converse, however, not true. The 41986, shall be conclusive upon the parties in Civil Case No. 19325-
evidence needed in Civil Case No. 19634-89 does not necessarily 88. The order of the Regional Trial Court of Davao City, Branch 15,
form part of the evidence needed by respondent in Civil Case No. dismissing respondent Allied Banking Corporations complaint in
19325-88. Accordingly, we find that the evidence to sustain the Civil Case No. 19325-88 is hereby REINSTATED with the
MODIFICATION that the case is not dismissed but is deemed
concluded on the ground of res judicata, i.e., as conclusiveness of MTD by Respondent:
judgment. Costs against respondent. (1) the Singapore High Court did not acquire jurisdiction over its
person;
SO ORDERED. (2) the foreign judgment sought to be enforced is void for having
ST. AVIATION SERVICES CO., PTE., LTD., petitioner, been rendered in violation of its right to due process.
vs. GRAND INTERNATIONAL AIRWAYS, INC., RTC – denied MTD; MR Denied
Petition for Review on Certiorari CA(Pet for Cert) -granted the petition and setting aside orders; MR
denied
ST Aviation
• foreign corporation based in Singapore. SC:
Grand International Airways, Inc., respondent, • conditions for the recognition and enforcement of a foreign
• domestic corporation engaged in airline operations. judgment in our legal system are contained in Section 48,
Rule 39 of the 1997 Rules of Civil Procedure
Agreement • xxx a foreign judgment or order against a person is merely
• petitioner agreed to undertake maintenance and modification presumptive evidence
works on respondent's aircraft • matters of remedy and procedure - governed by the lex fori
• agreed that the "construction, validity and performance or the internal law of the forum (CAB -SG)
thereof" shall be governed by the laws of Singapore. • service of summons outside Singapore is in accordance with
• to submit any suit arising from their agreement to the non- Order 11, r. 4(2) of the Rules of Court 19966 of Singapore,
exclusive jurisdiction of the Singapore courts. ◦ c) by a method of service authorized by the law of that
country for service of any originating process issued by
December 12, 1997, petitioner filed with the High Court of the that country.
Republic of Singapore an action for the sum of S$452,560.18, • In PH - Jurisdiction over a party is acquired- SOS
• motion, the court issued a Writ of Summons to be served ◦ personally by handing a copy thereof to the defendant
extraterritorially or outside Singapore ◦ or by substituted service.
• sought the assistance of the sheriff of Pasay City to effect • In this case, the Writ of Summons issued by the Singapore
service of the summons upon respondent – failed High Court was served upon respondent at its office.
• Sheriff's Return - received by Secretary of the General
Singapore High Court Manager of respondent company.
• judgment by default against respondent. • respondent completely ignored the summons

petitioner • Considering that the Writ of Summons was served upon


• filed with the RTC Pasay Petition for Enforcement of respondent in accordance with our Rules, jurisdiction was
Judgment acquired by the Singapore High Court over its person.
Clearly, the judgment of default rendered by that court liability, plate, glass, steam boiler, burglar, elevator, automatic
against respondent is valid. sprinkler, or other branch of insurance (except life, marine, inland,
and fire insurance).
Two requisites must concur before the DST can apply, namely: (1)
the document must be a policy of insurance or an obligation in the
nature of indemnity and (2) the maker should be transacting the
business of accident, fidelity, employer’s liability, plate, glass,
Philippine Health Care v CIR G.R. No. 167330 September 18, steam boiler, burglar, elevator, automatic sprinkler, or other branch
2009 of insurance (except life, marine, inland, and fire insurance).
J. Corona Under RA 7875, an HMO is "an entity that provides, offers or
arranges for coverage of designated health services needed by
Facts: plan members for a fixed prepaid premium."
Philippine Health Care’s objectives were: Various courts in the United States have determined that HMOs are
"[t]o establish, maintain, conduct and operate a prepaid group not in the insurance business. One test that they have applied is
practice health care delivery system or a health maintenance whether the assumption of risk and indemnification of loss are the
organization to take care of the sick and disabled persons enrolled in principal object and purpose of the organization or whether they are
the health care plan and to provide for the administrative, legal, and merely incidental to its business. If these are the principal objectives,
financial responsibilities of the organization.” the business is that of insurance. But if such is incidental and service
It lost the case in 2004 when it was made to pay over 100 million is the principal purpose, then the business is not insurance.
in VAT deficiencies. At the time the MFR was filed, it was able to Applying the "principal object and purpose test," there is
avail of tax amnesty under RA 9840 by paying 5 percent of the significant American case law supporting the argument that a
tax or 5 million pesos. corporation, whose main object is to provide the members of a
Petitioner passed an MFR but the CA denied. Hence, this case. group with health services, is not engaged in the insurance
business.
Issue: For the purpose of determining what "doing an insurance business"
Was petitioner, as an HMO, engaged in the business of insurance means, we have to scrutinize the operations of the business as a
during the pertinent taxable years, and was thus liable for DST? whole. This is of course only prudent and appropriate, taking into
account laws applicable to those in the insurance business.
Held: No. Mfr granted. CIR must desist from collecting tax. Petitioner, as an HMO, is not part of the insurance industry. This is
evident from the fact that it is not supervised by the Insurance
Ratio: Commission but by the Department of Health. In fact, in a letter
Section 185 of the NIRC . Stamp tax on fidelity bonds and other dated September 3, 2000, the Insurance Commissioner confirmed
insurance policies. – On all policies of insurance or bonds or that petitioner is not engaged in the insurance business.
obligations of the nature of indemnity for loss, damage, or liability As to whether the business is covered by the DST, we can see that
made or renewed by any person, association or company or while the contract did contains all the elements of an insurance
corporation transacting the business of accident, fidelity, employer’s contract, as stated in Sec 2., Par 1 of the Insurance Code, the primary
purpose of the company is to render service. The primary purpose of If it had been the intent of the legislature to impose DST on health
the parties in making the contract may negate the existence of an care agreements, it could have done so in clear and categorical
insurance contract. terms. It had many opportunities to do so. But it did not. The fact
Also, there is no loss, damage or liability on the part of the member that the NIRC contained no specific provision on the DST liability of
that should be indemnified by petitioner as an HMO. Under the health care agreements of HMOs at a time they were already known
agreement, the member pays petitioner a predetermined as such, belies any legislative intent to impose it on them. As a
consideration in exchange for the hospital, medical and professional matter of fact, petitioner was assessed its DST liability only on
services rendered by the petitioner’s physician or affiliated physician January 27, 2000, after more than a decade in the business as an
to him. HMO.
In other words, there is nothing in petitioner's agreements that gives In view of petitioner’s availment of the benefits of [RA 9840],
rise to a monetary liability on the part of the member to any third and without conceding the merits of this case as discussed above,
party-provider of medical services which might in turn necessitate respondent concedes that such tax amnesty extinguishes the tax
indemnification from petitioner. The terms "indemnify" or liabilities of petitioner.
"indemnity" presume that a liability or claim has already been
incurred. There is no indemnity precisely because the member Our Insurance Code was based on California and New York laws.
merely avails of medical services to be paid or already paid in When a statute has been adopted from some other state or country
advance at a pre-agreed price under the agreements. and said statute has previously been construed by the courts of such
Also, a member can take advantage of the bulk of the benefits state or country, the statute is deemed to have been adopted with the
anytime, e.g. laboratory services, x-ray, routine annual physical construction given.
examination and consultations, vaccine administration as well as
family planning counseling, even in the absence of any peril, loss or Judgments; When a minute resolution denies or dismisses a
damage on his or her part. petition for failure to comply with formal and substantive
Petitioner is obliged to reimburse the member who receives care requirements, the challenged decision, together with its findings
from a non-participating physician or hospital. However, this is only of fact and legal conclusions are deemed sustained.—It is true
a very minor part of the list of services available. The assumption that, although contained in a minute resolution, our dismissal of the
of the expense by petitioner is not confined to the happening of a petition was a disposition of the merits of the case. When we
contingency but includes incidents even in the absence of illness dismissed the petition, we effectively affirmed the CA ruling being
or injury. questioned. As a result, our ruling in that case has already become
Consequently, there is a need to distinguish prepaid service contracts final. When a minute resolution denies or dismisses a petition for
(like those of petitioner) from the usual insurance contracts. failure to comply with formal and substantive requirements, the
However, assuming that petitioner’s commitment to provide medical challenged decision, together with its findings of fact and legal
services to its members can be construed as an acceptance of the risk conclusions, are deemed sustained. But what is its effect on other
that it will shell out more than the prepaid fees, it still will not cases?
qualify as an insurance contract because petitioner’s objective is to
provide medical services at reduced cost, not to distribute risk like
an insurer.
With respect to the same subject matter and the same issues from the fact that petitioners health care agreements are not
concerning the same parties, it constitutes res judicata. However, subject to DST.
if other parties or another subject matter (even with the same
parties and issues) is involved, the minute resolution is not
binding precedent. Thus, in CIR v. Baier-Nickel,[70] the Court
noted that a previous case, CIR v. Baier-Nickel[71] involving the MIJARES v. RANADA
same parties and the same issues, was previously disposed of by the
Court thru a minute resolution dated February 17, 2003 sustaining FACTS:
the ruling of the CA. Nonetheless, the Court ruled that the previous
case ha(d) no bearing on the latter case because the two cases • May 9 1991: a complaint was filed by ten Filipino citizens
involved different subject matters as they were concerned with the representing a class of 10,000 members who each alleged having
taxable income of different taxable years.[72] suffered human rights abuses such as arbitrary detention, torture and
rape in the hands of police or military forces during the Marcos
regime with the United States District Court (US District Court),
Besides, there are substantial, not simply formal, distinctions District of Hawaii, against the Estate of former Philippine President
between a minute resolution and a decision. The constitutional Ferdinand E. Marcos (Marcos Estate)
requirement under the first paragraph of Section 14, Article VIII of • US District Court and Affirmed by US CA: awarded them
the Constitution that the facts and the law on which the judgment $1,964,005,859.90
is based must be expressed clearly and distinctly applies only to • Petitioners filed Complaint with Makati RTC for the
decisions, not to minute resolutions. A minute resolution is signed enforcement of the Final Judgment
only by the clerk of court by authority of the justices, unlike a • Marcos Estate filed a motion to dismiss, raising, among others,
decision. It does not require the certification of the Chief Justice. the non-payment of the correct filing fees paying only P410
Moreover, unlike decisions, minute resolutions are not published in • Petitioners claimed that an action for the enforcement of a
the Philippine Reports. Finally, the proviso of Section 4(3) of Article foreign judgment is not capable of pecuniary estimation
VIII speaks of a decision.[73] Indeed, as a rule, this Court lays down • RTC: estimated the proper amount of filing fees was
doctrines or principles of law which constitute binding precedent in approximately P472 and dismissing the case without prejudice
a decision duly signed by the members of the Court and certified by • Petition for Certiorari under Rule 65
the Chief Justice.
ISSUE: W/N the enforcement of a foreign judgment is incapable of
pecuniary estimation
Accordingly, since petitioner was not a party in G.R. No. 148680
and since petitioners liability for DST on its health care agreement HELD: NO. (But belongs to "other actions not involving property")
was not the subject matter of G.R. No. 148680, petitioner cannot petition is GRANTED.
successfully invoke the minute resolution in that case (which is
not even binding precedent) in its favor. Nonetheless, in view of • There is an evident distinction between a foreign judgment in an
the reasons already discussed, this does not detract in any way action in rem and one in personam. For an action in rem, the foreign
judgment is deemed conclusive upon the title to the thing, while in to safeguard against the harassment of defendants, to insure that the
an action in personam, the foreign judgment is presumptive, and not task of courts not be increased by never-ending litigation of the same
conclusive, of a right as between the parties and their successors in disputes, and in a larger sense to promote what Lord Coke in the
interest by a subsequent title Ferrer's Case of 1599 stated to be the goal of all law: "rest and
• However, in both cases, the foreign judgment is susceptible to quietness." If every judgment of a foreign court were reviewable on
impeachment in our local courts on the grounds of want of the merits, the plaintiff would be forced back on his/her original
jurisdiction or notice to the party, collusion, fraud, or clear mistake cause of action, rendering immaterial the previously concluded
of law or fact. Thus, the party aggrieved by the foreign judgment is litigation.
entitled to defend against the enforcement of such decision in the • Marcos Estate cites Singsong v. Isabela Sawmill and Raymundo
local forum. It is essential that there should be an opportunity to v. Court of Appeals:
challenge the foreign judgment, in order for the court in this ◦ In determining whether an action is one the subject matter of
jurisdiction to properly determine its efficacy even if such judgment which is not capable of pecuniary estimation this Court has adopted
has conclusive effect as in the case of in rem actions, if only for the the criterion of first ascertaining the nature of the principal action or
purpose of allowing the losing party an opportunity to challenge the remedy sought. If it is primarily for the recovery of a sum of money,
foreign judgment. Consequently, the party attacking a foreign the claim is considered capable of pecuniary estimation, and whether
judgment has the burden of overcoming the presumption of its jurisdiction is in the municipal courts or in the courts of first instance
validity. Absent perhaps a statutory grant of jurisdiction to a quasi- would depend on the amount of the claim. However, where the
judicial body, the claim for enforcement of judgment must be basic issue is something other than the right to recover a sum of
brought before the regular courts. money, where the money claim is purely incidental to, or a
• There are distinctions, nuanced but discernible, between the consequence of, the principal relief sought, this Court has considered
cause of action arising from the enforcement of a foreign judgment, such actions as cases where the subject of the litigation may not be
and that arising from the facts or allegations that occasioned the estimated in terms of money, and are cognizable exclusively by
foreign judgment. They may pertain to the same set of facts, but courts of first instance (now Regional Trial Courts).
there is an essential difference in the right-duty correlatives that are • An examination of Section 19(6), B.P. 129 reveals that the
sought to be vindicated. Extensive litigation is thus conducted on the instant complaint for enforcement of a foreign judgment, even if
facts, and from there the right to and amount of damages are capable of pecuniary estimation, would fall under the jurisdiction of
assessed. On the other hand, in an action to enforce a foreign the Regional Trial Courts
judgment, the matter left for proof is the foreign judgment itself, and • The complaint to enforce the US District Court judgment is one
not the facts from which it prescinds. capable of pecuniary estimation. But at the same time, it is also an
• As stated in Section 48, Rule 39, the actionable issues are action based on judgment against an estate, thus placing it beyond
generally restricted to a review of jurisdiction of the foreign court, the ambit of Section 7(a) of Rule 141. It is covered by Section 7(b)
the service of personal notice, collusion, fraud, or mistake of fact or (3), involving as it does, "other actions not involving property." The
law. The limitations on review is in consonance with a strong and petitioners thus paid the correct amount of filing fees, and it was a
pervasive policy in all legal systems to limit repetitive litigation on grave abuse of discretion for respondent judge to have applied
claims and issues. Otherwise known as the policy of preclusion, it instead a clearly inapplicable rule and dismissed the complaint.
seeks to protect party expectations resulting from previous litigation,

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