CHU v. CUNANAN

 

CATALINA B. CHU, THEANLYN B. CHU, THEAN CHING LEE B. CHU, THEAN LEEWN B. CHU, and MARTIN LAWRENCE B. CHU THEAN LEEWN B. CHU, and MARTIN LAWRENCE B. CHU, petitioners v. 

SPOUSES FERNANDO C. CUNANAN and TRINIDAD N. CUNANAN, BENELDA ESTATE DEVELOPMENT CORPORATION, and SPOUSES AMADO E. CARLOS and GLORIA A. CARLOS, respondents

G.R. No. 156185. September 12, 2011.

DOCTRINE: If two or more suits are instituted on the basis of the same cause of action, the filing of one or a judgment upon the merits in any one is available as a ground for the dismissal of the others.

 

FACTS:

1986 - Spouses Manuel and Catalina Chu (Chus) executed a deed of sale with assumption of mortgage involving their five parcels of land situated in Saguin, San Fernando City, Pampanga in favor of Trinidad N. Cunanan (Cunanan) for the consideration of P5,161,090.00.

They also executed a so-called side agreement, whereby they clarified:

- that Cunanan had paid only P1,000,000.00 to the Chus despite the Chus, as vendors, having acknowledged receiving P5,161,090.00;

- that the amount of P1,600,000.00 was to be paid directly to Benito Co and to Security Bank and Trust Company (SBTC) in whose favor the five lots had been mortgaged;

- and that Cunanan would pay the balance of P2,561.90.00 within three months, with a grace period of one month subject to 3%/month interest on any remaining unpaid amount.

- that the ownership of the lots would remain with the Chus as the vendors and would be transferred to Cunanan only upon complete payment of the total consideration and compliance with the terms of the deed of sale with assumption of mortgage

Thereafter, the Chus executed a special power of attorney authorizing Cunanan to borrow P5,161,090.00 from any banking institution and to mortgage the five lots as security, and then to deliver the proceeds to the Chus net of the balance of the mortgage obligation and the downpayment.

Cunanan was able to transfer the title of the five lots to her name without the knowledge of the Chus, and to borrow money with the lots as security without paying the balance of the purchase price to the Chus. She later transferred two of the lots to Spouses Amado and Gloria Carlos (Carloses) on July 29, 1987.

As a result, the Chus caused the annotation of an unpaid vendor’s lien on three of the lots. Nonetheless, Cunanan still assigned the remaining three lots to Cool Town Realty on May 25, 1989 despite the annotation.

1988 - the Chus commenced Civil Case No. G-1936 in the RTC to recover the unpaid balance from Spouses Fernando and Trinidad Cunanan.

Five years later, the Chus amended the complaint to seek the annulment of the deed of sale with assumption of mortgage and of the TCTs issued pursuant to the deed, and to recover damages. They impleaded Cool Town Realty and Development Corporation (Cool Town Realty), and the Office of the Registry of Deeds of Pampanga as defendants in addition to the Cunanans.

Considering that the Carloses had meanwhile sold the two lots to Benelda Estate Development Corporation (Benelda Estate) in 1995, the Chus further amended the complaint in Civil Case No. G-1936 to implead Benelda Estate as additional defendant.

BENELDA ESTATE filed its answer with a motion to dismiss, claiming, among others, that the amended complaint stated no cause of action because it had acted in good faith in buying the affected lots, exerting all efforts to verify the authenticity of the titles, and had found no defect in them.

RTC denied Benelda Estate’s motion to dismiss

CA annulled the RTC's denial for being tainted with grave abuse of discretion

SC upheld the dismissal of Civil Case No. G-1936 as against Benelda Estate

1999 - the Chus, the Cunanans, and Cool Town Realty entered into a compromise agreement whereby the Cunanans transferred to the Chus their 50% share in "all the parcels of land situated in Saguin, San Fernando, Pampanga" registered in the name of Cool Town Realty "for and in consideration of the full settlement of their case."

RTC approved the compromise agreement in a partial decision dated January 25, 2000.

2001 - the petitioners herein (i.e. Catalina Chu and her children) brought another suit, Civil Case No. 12251, against the Carloses and Benelda Estate, seeking the cancellation of the TCTs of the two lots in the name of Benelda Estate, and the issuance of new TCTs in their favor, plus damages.

The petitioners amended their complaint on February 4, 2002 to implead the Cunanans as additional defendants.

The Cunanans moved to dismiss the amended complaint based on two grounds:

(a) bar by prior judgment, and

(b) the claim or demand had been paid, waived, and abandoned.

Benelda Estate likewise moved to dismiss the amended complaint, citing as grounds:

(a) forum shopping;

(b) bar by prior judgment, and

(c) failure to state a cause of action.

The Carloses raised affirmative defenses in their answer, namely:

(a) the failure to state a cause of action;

(b) res judicata or bar by prior judgment; and

(c) bar by statute of limitations.

RTC denied both motions to dismiss holding that the amended complaint stated a cause of action against all the defendants; that the action was not barred by res judicata, pointing out that the compromise agreement involved only the three parcels of land registered in the name of Cool Town Realty.

CA granted the petition for certiorari and nullified the challenged orders of the RTC. The filing of Civil Case No. 12251 contravened the rule against splitting of a cause of action, and rendered Civil Case No. 12251 subject of a motion to dismiss based on bar by res judicata.

Petitioners filed the present petition.

 

ISSUE:

1. Was Civil Case No. 12251 barred by res judicata although the compromise agreement did not expressly include Benelda Estate as a party and although the compromise agreement made no reference to the lots now registered in Benelda Estate's name?

2. W/N the petitioners were guilty of splitting their single cause of action to enforce or rescind the deed of sale with assumption of mortgage.

 

RULING:

1. YES. The second civil case is barred by res judicata.

A compromise agreement is a contract whereby the parties, by making reciprocal concessions, avoid a litigation or put an end to one already commenced. It encompasses the objects specifically stated therein, although it may include other objects by necessary implication, and is binding on the contracting parties, being expressly acknowledged as a juridical agreement between them. It has the effect and authority of res judicata upon the parties.

The intent of the parties to settle all their claims against each other is expressed in the phrase “any and all their respective claims against each other as alleged in the pleadings the respectively filed in connection with this case”, which was broad enough to cover whatever claims the petitioners might assert based on the deed of sale with assumption of mortgage

There is no question that the deed of sale with assumption of mortgage covered all the five lots.

To limit the compromise agreement only to the three lots mentioned therein would contravene the avowed objective of Civil Case No. G-1936 to enforce or to rescind the entire deed of sale with assumption of mortgage. Such interpretation is akin to saying that the Cunanans separately sold the five lots, which is not the truth. For one, Civil Case No. G-1936 did not demand separate amounts for each of the purchased lots. Also, the compromise agreement did not state that the value being thereby transferred to the petitioners by the Cunanans corresponded only to that of the three lots.

Res judicata has the following requisites:

(a) the former judgment must be final

The first requisite was attendant. Civil Case No. G-1936 was already terminated under the compromise agreement, for the judgment, being upon a compromise, was immediately final and unappealable.

 

(b) it must have been rendered by a court having jurisdiction of the subject matter and the parties;

The RTC had jurisdiction over the cause of action in Civil Case No. G-1936 for the enforcement or rescission of the deed of sale with assumption of mortgage, which was an action whose subject matter was not capable of pecuniary estimation.

 

(c) it must be a judgment on the merits;

That the compromise agreement explicitly settled the entirety of Civil Case No. G-1936 by resolving all the claims of the parties against each other indicated that the third requisite was also satisfied.

 

(d) there must be between the first and second actions

 

(i) identity of parties

The requirement of the identity of parties was fully met, because the Chus, on the one hand, and the Cunanans, on the other hand, were the parties in both cases along with their respective privies. The fact that the Carloses and Benelda Estate, defendants in Civil Case No. 12251, were not parties in the compromise agreement was inconsequential, for they were also the privies of the Cunanans as transferees and successors-in-interest. It is settled that the absolute identity of parties was not a condition sine quanon for res judicata to apply, because a shared identity of interest sufficed. 36 36 Mere substantial identity of parties, or even community of interests between parties in the prior and subsequent cases, even if the latter were not impleaded in the first case, was sufficient.

 

(ii) identity of the subject matter

Both actions dealt with the properties involved in a deed of sale with assumption of mortgage.

 

(iii) identity of cause of action.

Identity of the causes of action was also met, because Case No. G-1936 and Civil Case No. 12251 were rooted in one and the same cause of action — the failure of Cunanan to pay in full the purchase price of the five lots subject of the deed of sale with assumption of mortgage. In other words, Civil Case No. 12251 reprised Civil Case No. G-1936, the only difference between them being that the petitioners alleged in the former that Benelda Estate was "not also a purchaser for value and in good faith."

2. YES, the petitioners were guilty of splitting their single cause of action to enforce or rescind the deed of sale with assumption of mortgage.

Splitting a single cause of action is the act of dividing a single or indivisible cause of action into several parts or claims and instituting two or more actions upon them. A single cause of action or entire claim or demand cannot be split up or divided in order to be made the subject of two or more different actions. Section 4, Rule 2 of ROC expressly prohibits splitting of a single cause of action:

Section 4.  Splitting a single cause of action. — If two or more suits are instituted on the basis of the same cause of action, the ling of one or a judgment upon the merits in any one is available as a ground for the dismissal of the others.

The petitioners were not at liberty to split their demand to enforce or rescind the deed of sale with assumption of mortgage and to prosecute piecemeal or present only a portion of the grounds upon which a special relief was sought under the deed of sale with assumption of mortgage, and then to leave the rest to be presented in another suit; otherwise, there would be no end to litigation. Their splitting violated the policy against multiplicity of suits, whose primary objective was to avoid unduly burdening the dockets of the courts. Their contravention of the policy merited the dismissal of Civil Case No. 12251 on the ground of bar by res judicata.

In fine, the rights and obligations of the parties vis - a- vis the five lots were all defined and governed by the deed of sale with assumption of mortgage, the only contract between them. That contract was single and indivisible, as far as they were concerned. Consequently, the Chus could not properly proceed against the respondents in Civil Case No. 12251, despite the silence of the compromise agreement as to the Carloses and Benelda Estate, because there can only be one action where the contract is entire, and the breach total, and the petitioners must therein recover all their claims and damages. The Chus could not be permitted to split up a single cause of action and make that single cause of action the basis of several suits.

WHEREFORE, we deny the petition for review on certiorari, and affirm the decision promulgated in CA-G.R. SP No. 72558.

 

 

 

CIVIL SERVICE COMMISSION, petitioner v. PACOL DISUMIMBA RASUMAN, respondent

G.R. No. 239011. June 17, 2019.

 

TOPIC: Real Action

 

FACTS:

2014 - respondent Rasuman, a Senior Executive Assistant in the Bureau of Customs (BOC), filed before RTC of Lanao del Sur, a verified petition for correction of his date of birth from February 12, 1952 to February 12, 1956, impleading as respondent the Local Civil Registrar of Marantao, Lanao del Sur.

 

The RTC issued an Order setting the case for hearing and directing the publication of the Order in a newspaper of general circulation in Marawi City and Iligan City for three consecutive weeks at the expense of respondent, and that the Order and the petition, as well as its annexes, be furnished the Local Civil Registrar of Marantao, Lanao del Sur, the Office of the Solicitor General, and the Civil Registrar General which respondent complied with.

 

Respondent later filed an Amended Petition to implead the BOC.

 

RTC granted the petition for correction. Further, the Bureau of Customs is also directed to effect the correction of the date of birth of the petitioner in the latter's official records in the Agency.

 

2016 - respondent filed with the CSC a request for correction of his date of birth in his service records.

 

The CSC-NCR required respondent to submit certain documents. Respondent submitted the following documents: the original copy of his Certificate of Live Birth issued by the Philippine Statistics Authority with remarks that his date of birth was corrected from February 12, 1952 to February 12, 1956 pursuant to the July 23, 2015 RTC Decision; his affidavits explaining the discrepancy in his date of birth and the fact that he was not baptized as it is not a Muslim practice; affidavits of two witnesses attesting to the truthfulness of his claim that his date of birth was February 12, 1956; and the certified true copies of his service records card and the Personal Data Sheet issued by the CSC Field Office, Department of Public Works and Highways, indicating his birthdate as February 12, 1952.

 

The CSC-NCR issued denied respondent's request for correction. It held that while respondent's Certicate of Live Birth (belatedly registered) supported his claim that his date of birth was February 12, 1956, however, his employment and school records showed otherwise; that his personal data sheet on le with the CSC Field Office showed that he attended elementary school from 1957 to 1962; thus, if his birthday was February 12, 1956, he was only one year old at the time he first attended elementary school.

 

Respondent filed a petition for review with the CSC Proper.

 

CSC dismissed the petition for review. It held that it is not bound by the July 23, 2015 RTC decision in the correction of respondent's birthdate because it was not impleaded therein, although it was an indispensable party; that the RTC decision would have no effect insofar as the CSC is concerned.

 

Respondent filed a petition for review with the CA.

 

CA granted the petition of the respondent. The CSC is directed to comply with the RTC

decision.

 

CSC

RASSUMAN

A petition directed against the thing itself or the res, which concerns the status of a person, like correction of entries in the birth certificate, is an action in rem and which jurisdiction over the person of the defendant is not a prerequisite to confer jurisdiction on the court, provided the latter has jurisdiction over the res.   Being a proceeding in rem , the decision in the correction of entry case binds not only the parties, but the whole world; and that an in rem proceeding is validated essentially through publication.

It is an indispensable party to the petition for correction of respondent's date of birth filed in the RTC; and for not having been impleaded, it is not bound by the RTC decision granting the petition, so it properly denied respondent's request for correction of his date of birth in his service records.

 

 

ISSUE: W/N CSC should have been impleaded in the correction of entry in the civil registry for it to be bound by the RTC decision.

 

RULING:

YES. CSC should have been impleaded in the correction of entry in the civil registry for it to be bound by the RTC decision.

 

Petition for cancellation or correction of entries in the civil registry is governed by Rule 108 of the Rules of Court which provides, among others:

SEC. 3. Parties. — When cancellation or correction of an entry in the civil register is sought, the civil registrar and all persons who have or claim any interest which would be affected thereby shall be made parties to the proceeding.

 

SEC. 4. Notice and Publication. — Upon the filing of the petition, the court shall, by an order, fix the time and place for the hearing of the same, and cause reasonable notice thereof to be given to the persons named in the petition. The court shall also cause the order to be published once a week for three (3) consecutive weeks in a newspaper of general circulation in the province.

 

SEC. 5. Opposition. — The civil registrar and any person having or claiming any interest under the entry whose cancellation or correction is sought may, within fifteen (15) days from notice of the petition, or from the last date of publication of such notice, file his opposition thereto.

 

Summons must, therefore, be served not for the purpose of vesting the courts with jurisdiction, but to comply with the requirements of fair play and due process to afford the person concerned the opportunity to protect his interest if he so chooses.

 

Courts need not acquire jurisdiction over parties on this basis in in rem and quasi in rem actions. Actions in rem are actions against the thing itself. They are binding upon the whole world. Quasi in rem actions are actions involving the status of a property over which a party has interest. Quasi in rem actions are not binding upon the whole world. They affect only the interests of the particular parties.

 

However, to satisfy the requirements of due process, jurisdiction over the parties in in rem and quasi in rem actions is required.

 

The phrase, "against the thing," to describe in rem actions is a metaphor. It is not the "thing" that is the party to an in rem action; only legal or natural persons may be parties even in in rem actions. "Against the thing" means that resolution of the case affects interests of others whether direct or indirect. It also assumes that the interests — in the form of rights or duties — attach to the thing which is the subject matter of litigation. In actions in rem, our procedure assumes an active vinculum over those with interests to the thing subject of litigation.

 

Due process requires that those with interest to the thing in litigation be notified and given an opportunity to defend those interests. Courts, as guardians of constitutional rights, cannot be expected to deny persons their due process rights while at the same time be considered as acting within their jurisdiction.

 

In Police Senior Superintendent Macawadib v. The Philippine National Police Directorate for Personnel and Records Management, we already held that there is a necessity to implead the CSC in petitions for correction of entries that would affect a government employee's service records.

 

In this present case, respondent sought from the RTC the correction of his birthdate and impleaded the BOC, the agency where he was working at so as to update his service records, but did not implead the CSC. It bears stressing that one of the CSC's mandated functions under Executive Order No. 292 is to keep and maintain personnel records of all officials and employees in the civil service. Therefore, the CSC has an interest in the petition for correction of respondent's birth certificate since the correction entails a substantial change in its public record, i.e. he would have an additional four years before reaching his compulsory retirement age.

 

To reiterate, Section 3 of Rule 108 mandatorily requires that the civil registrar and the interested parties who would be affected by the grant of a petition for correction should be made parties. Considering that the CSC is an indispensable party, it should have been impleaded in respondent's petition, and sent a personal notice to comply with the requirements of fair play and due process, before it could be affected by the decision granting the correction of his date of birth. The CSC should have been afforded due process before its interest be affected, no matter how the proceeding was classified. Thus, the CSC correctly denied respondent's request for correction of his date of birth on the basis of the RTC decision granting the correction.

 

The CA's reliance on our decision in Civil Service v. Magoyag that since the petition for correction of entry filed in the RTC was a proceeding in rem , the decision therein binds not only the parties thereto but the whole world and that an in rem proceeding is validated essentially through publication — is misplaced.

 

While there may be cases where the Court held that the failure to implead and notify the affected or interested parties may be cured by the publication of the notice of hearing, such as earnest efforts were made by petitioners in bringing to court all possible interested parties, the interested parties themselves initiated the correction proceedings, there is no actual or presumptive awareness of the existence of the interested parties, or when a party is inadvertently left out, none of them applies in respondent's case. In this case, while respondent impleaded the BOC when he amended his petition for correction of entry, he did not implead the CSC. To stress, the CSC is the central personnel agency of the government and, as such, keeps and maintains the personal records of all officials and employees in the civil service.

 

WHEREFORE, the petition for review on certiorari is GRANTED. The Decision dated October 25, 2017 and the Resolution dated April 26, 2018 of the Court of Appeals in CA-G.R. SP No. 151017 are hereby REVERSED and SET ASIDE. The January 13, 2017 Decision No. 170058 and May 8, 2017 Resolution No. 1700847 of the Civil Service Commission in NDC-2016-07025 are hereby REINSTATED.