Republic of the Philippines

SUPREME 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:

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 Philippines
SUPREME 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. 7678).
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. L15548, October 30, 1962).
More categorical still is the pronouncement of this Court in Pomeroy vs. Director of Prisons, L14284-85, 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; L8936, 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.

DECISION

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 plaintiffs 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 attorneys 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 plaintiffs 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 plaintiffs 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 plaintiffs 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
Hipolitos 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."
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Defendants replied to plaintiffs 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
Hipolitos 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 plaintiffs 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 plaintiffs 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 Hipolitos 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 defendants 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
movants 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.

DECISION

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 fullblown 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 plaintiffs 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.)
chanroble s.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:

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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.
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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:
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The issues raised and the arguments contended in the Motion for Reconsideration of defendant-appellant are
the same issues and arguments presented in the appellants brief, reply brief and supplemental reply brief,

which have been discussed in plaintiff-appellees 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.

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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 movants 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, Grio-Aquino and Medialdea, JJ., concur.