Philippine Supreme Court Jurisprudence > Year 1965 > September 1965 Decisions > G.R. No. L-18652 September 14, 1965 - AMADO C. TIGNO v. SILVESTRE PINGOL, ET., AL.:

This is an appeal from the order of the Court of First Instance of Manila, Honorable Jesus Y. Perez presiding, dismissing the plaintiff’s complaint in Civil Case No. 45675. The material facts as well as the legal conclusions now assailed as erroneous are stated in the order appealed from, to wit:jgc:chanrobles.com.ph

"ORDER

"Defendant Silvestre Pingol and Rizalina Reyes-Pingol (hereinafter referred to as Pingols) have filed a motion dated December 8, 1960 asking for the dismissal of plaintiffs’ complaint on the grounds that the causes of action therein set forth are barred by prior judgment and/or that there is another case pending between the same parties for the same causes and that the complaint states no cause of action. Plaintiffs are opposing the motion to dismiss.

"It appears that on October 2, 1956, the Pingols filed a complaint against herein plaintiffs (hereinafter referred to as Tignos) and the Rehabilitation Finance Corporation in Civil Case No. 30773 of the Court of First Instance of Manila to foreclose the second mortgage which the Tignos executed to secure a loan which they secured from the Pingols. In said Civil Case No. 30773, the Tignos filed an answer admitting that they borrowed P6,000.00 from the Pingols, which indebtedness was secured by a mortgage on real estate covered by TCT No. 9586 of the land records of Manila but the Tignos interposed the special defense that the transaction was a usurious one. The Pingols filed a motion for summary judgment, supported with documents and affidavits. The Tignos filed opposition to the motion for summary judgment claiming that they have interposed the defense of usury and this involves an issue of fact which must be proved at the trial on the merits. The Court issued an order holding in abeyance the motion for summary judgment and set the case for hearing for the sole purpose of receiving evidence on the question of usury. At said hearing, the Tignos failed to present evidence to substantiate their allegation of usury and the Court granted the motion for summary judgment and rendered the judgment on May 28, 1957 in favor of the Pingols ordering the Tignos to pay the Pingols P9,159.00 within ninety-days and directing that the property mortgaged be sold at public auction for the satisfaction of the judgment if payment is not made within ninety days. This judgment became final and executory because the Tignos did not take any step to appeal it. Subsequently, the property mortgaged was sold at public auction because the Tignos did not pay the amount of the judgment of P9,159.00 within ninety days. The sale was subject to the superior rights of the first mortgagee, the RFC (now DBP). The Pingols were the successful bidder in the public sale and the sheriff executed the corresponding certificate of sheriff’s sale to them. On January 7, 1958, the Pingols filed a motion in Civil Case No. 30773 asking for the confirmation of the sheriff’s sale. The sheriff’s sale was confirmed by the Court despite opposition of the Tignos who claimed that the price in the sheriff’s sale was inadequate. The Tignos appealed to the Supreme Court the order confirming the sheriff’s sale. The appeal was docketed in the Supreme Court as Case G. R. No. L-14749. In said appeal, the Tignos attacked as erroneous the failure of the lower court to consider that the Pingols were deemed to have admitted the allegations of usury interposed by the Tignos in their answer in Civil Case No. 30773 because the Pingols have failed to deny under oath said allegation of usury that the lower court erred in requiring the Tignos to present evidence on their allegation of usury contained in their answer, in allowing counsel of the Tignos to waive their defense without their consent, in awarding the Pingols 25% of the amount due as attorney’s fees and in confirming the sheriff’s sale. On May 31, 1960, the Supreme Court rendered decision in 108 Phil. 623 holding that "since no appeal was taken by the Tignos from the decision of the lower court in Civil Case No. 30773 and the same has already become final, it was now late for the Tignos to raise the questions posed in their assignment of errors." The Supreme Court stated that the only issue to be determined in the appeal is whether or not the lower court erred in confirming the sale at public auction of the property involved in the case. In view of the decision of the Supreme Court on August 17, 1960 the Pingols filed a motion in Civil Case No. 30773 asking for the issuance of a writ of possession to place them in possession of the property in question and that the Tignos and/or their privies in interest be ejected therefrom. The Tignos opposed this motion again raising the issue of usury. The Court granted the motion for issuance of a writ of possession and a writ of execution was issued in Civil Case No. 30773. A subsequent motion for reconsideration filed by the Tignos to the Court’s order for issuance of a writ of possession was denied. The Tignos then filed the present motion (action) asking that the mortgage in favor of the Pingols be declared void ab initio because the same is contrary to the Usury Law and likewise to declare null and void all orders issued in connection with what the Tignos claim to be a void decision rendered in Civil Case No. 30773 because the Court did not declare therein that the allegation of usury contained in the answer filed by the Tignos was deemed admitted by the Pingols by the latter’s failure to deny said allegations of usury under oath. But, this very same issue about the alleged error of the trial court in Civil Case No. 30773 in failing to consider that the Pingols were deemed to have admitted the allegations of usury interposed in the answer of the Tignos by the failure of the Pingols to deny under oath said allegation of usury was already passed upon by the Supreme Court in G.R. No. L-14749 and likewise adjudicated in said Civil Case No. 30773 and consequently said issue is already barred by prior judgment. In fact, the Supreme Court in its decision in G.R. No. L-14749, in which the Tignos tried to resuscitate the issue of usury raised in Civil Case No. 30773, stated that "since no appeal therefrom has been interposed and the same (decision Civil Case No. 30773) has already become final, it is now too late to raise the questions posed in these assignments." It is well established that:jgc:chanrobles.com.ph

"‘A final judgment is conclusive not only as to every matter which was offered to sustain the petitioner’s claim or demand, but also as to any other admissible matter which might have been offered for that purpose, even if his cause has not been properly ventilated by his former counsel who failed to see and develop a pertinent issue.’"

" `Under the rule of bar by prior judgment, not only the issues actually passed upon are barred, but any other issue that could have been raised in the previous case (Rule 39, Sec. 45, Rules of Court; Peñalosa v. Tuason, 22 Phil., 303, 312; NAMARCO v. Macaraeg, Et Al., 52 O. G. 182).’"

The plaintiffs in this case cannot by varying the form of the action or adopting a different method of presenting their case, escape from the operation of the doctrine of res judicata. Thus, in the very recent case of RCA Communications, Inc. v. Philippine Long Distance Telephone Company, Et Al., 110 Phil. 420, the RCA filed a petition to prevent the Secretary of Public Works and Communications and the Radio Control Board from acting on the application of the Philippine Long Distance Telephone Company (PLDTCO for short) to construct and operate a radio telephone station. The Court dismissed the petition and the RCA appealed to the Supreme Court. The Radio Control Board issued a permit to the PLDTCO to construct the radio station. RCA filed an action for injunction to restrain PLDTCO from operating the radio telephone service. The Supreme Court held that a party by varying the form of the action or adopting a different method of presenting his case, (cannot) escape the operation of the principle that one and the same cause of action shall not be twice litigated between the parties. Although the issue of the constitutionality of the franchise of PLDTCO is raised for the first time in the second case, yet, the principle of res judicata makes a judgment conclusive not only as to every matter already litigated but as to any admissible matter that could have been offered for that purpose.

"The Tignos contend that the decision rendered in Civil Case No. 30773 was erroneous because the Court did not consider that the Pingols have already admitted the allegations of usury contained in the answer of the Tignos by the failure of the Pingols to deny under oath said allegation of usury and therefore there was no valid judgment and the principle of res adjudicata could not apply. This contention is not tenable because:jgc:chanrobles.com.ph

" `The principle of res judicata attaches even when the prior decision is erroneous. It also attaches even if the decision might have been reversed had an appeal been taken therefrom’" (Rosario Neri Edwards, Et Al., v. Jose Arce, Et Al., 98 Phil., 688; 52 O. G. 2537)

"With reference to the prayer contained in the complaint in this case to declare null and void and to set aside all orders issued in connection with the decision rendered in Civil Case No. 30773 such as the order confirming the sheriff’s sale and the issuance of the writ of possession as well as the writ of possession itself, those matters have already been directly passed upon by the Supreme Court in its decision rendered in 108 Phil. 623 when said Court affirmed and held valid the order confirming the sheriff’s sale.

"WHEREFORE, the Court sustains, as it hereby sustains, the motion to dismiss filed by defendants, the Pingol spouses, and hereby declares the amended complaint dismissed, without pronouncement as to costs.

So ordered.

Manila, January 25, 1961."cralaw virtua1aw library

Two errors, discussed jointly in their brief are assigned by appellants:jgc:chanrobles.com.ph

"The trial court erred in having dismissed the amended complaint by erroneously holding that the new causes of action embodied in the amended complaint were already the subject matter of a previous litigation between the same parties and in making apply in this case the principle of res judicata;

"The trial court, assuming arguendo that it was correct that the question of usury was already res adjudicata, still erred in not having utilized its legal basis for the recovery of the usurious interests as sought in the amended complaint or in not having set aside or vacated the same and the incidental orders thereto for being null and void because they contravene public policy."cralaw virtua1aw library

The causes of action in appellants’ complaint alleged by them to be new (by "new" they evidently mean that the same were not included and passed upon in Civil Case No. 30773 of the Court of First Instance of Manila nor in Case G.R. No. L-14749 of this Court) are as follows: first, recovery of interest, penalty and commission claimed to be usurious, paid by appellants to appellees; second, annulment of the second mortgage, which was the subject of foreclosure in Civil Case No. 30773 aforesaid, on the ground that the loan secured thereby was usurious; and third, recovery of P40,000.00 "which represented the difference between the real market value of the estate and the purchase price which plaintiffs (appellants) would have derived if the sale in favor of Mr. and Mrs. Lucas Cornista, the new owners of the house and lot, had only been done under normal circumstances," and recovery of P30,000.00 by way of moral damages suffered by appellants for having been ejected from the premises, plus P5,000.00 as attorney’s fees.

The third cause of action — specifically the claim for P40,000.00 — bears a little explanation. Appellees, being the successful bidders at the sheriff’s sale following the judgment of foreclosure, obtained a confirmation of that sale from the Court of First Instance. The order of confirmation was appealed to Us, but before the judgment of affirmance was rendered (on May 31, 1960) appellants sold the properties in question to the Cornistas on January 23, 1960 in the fear, they allege, that they might lose the same to appellees, virtually compelling them to accept less than the fair market value thereof.

It is at once obvious that the causes of action in appellants’ complaint are not new at all and that they have been settled, and concluded in the previous litigations between the parties. The defense of usury was raised by appellants in their answer to appellees’ complaint for foreclosure of the mortgage in Civil Case No. 30773. In the same answer appellants expressly admitted the due execution of that mortgage and, at least by implication, sought its annulment on the ground that the loan secured by it was usurious. These defenses were turned down by the Court of First Instance and the judgment it rendered in favor of herein appellees became final, no appeal having been taken therefrom. The issue of usury was again raised by appellants when they appealed to this Court from the order confirming the sheriff’s sale (108 Phil. 623), and this Court refused to entertain the issue because it had been finally decided in the foreclosure suit.

With reference to appellants’ claim for damages arising from their having sold the properties to the Cornistas at less than their fair market value — a sale they say they had to make in order to avoid losing said properties to appellees — one can only marvel at the audacity demonstrated by such an attempt to seek redress from an act which appellants did voluntarily and, on its face, in bad faith, the sale having been executed while the rights of the parties were still pending adjudication in court. In any event, the validity of appellants’ claim in this respect depended on whether or not the foreclosure of the mortgage and the subsequent sheriff’s sale of the mortgaged properties were proper. These questions and all others necessarily germane thereto, including that of usury now raised by appellants for the third time, have been set at rest by the judgment of the Court of First Instance in Civil Case No. 30773 and by the judgment of this Court in G. R. No. L-14749. The present appeal is not only without merit but also frivolous.

The order appealed from is affirmed, with treble costs against appellants.

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

Regala, J., took no part.