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LOZANO vs. MARTINEZ

G.R. No. L-63419

The constitutionality of Batas Pambansa Bilang 22 (BP 22 for short), popularly known as the Bouncing Check Law is the sole

issue presented by these petitions for decision.

The defendants in those cases moved seasonably to quash the information on the ground that the acts charged did not

constitute an offense, the statute being unconstitutional. The motions were denied by the respondent trial courts.

Those who question the constitutionality of BP 22 insist that: (1) it offends the constitutional provision forbidding imprisonment

for debt; (2) it impairs freedom of contract; (3) it contravenes the equal protection clause; (4) it unduly delegates legislative and

executive powers; and (5) its enactment is flawed in that during its passage the Interim Batasan violated the constitutional

provision prohibiting amendments to a bill on Third Reading.

As we enter upon the task of passing on the validity of an act of a co-equal and coordinate branch of the government, every

statute is presumed to be valid.

1st issue. It is contended that the statute runs counter to the inhibition in the Bill of Rights which states, "No person shall be

imprisoned for debt or non-payment of a poll tax." Petitioners insist that, since the offense under BP 22 is consummated only

upon the dishonor or non-payment of the check when it is presented to the drawee bank, the statute is really a "bad debt law"

rather than a "bad check law." What it punishes is the non-payment of the check, not the act of issuing it.

The gravamen of the offense punished by BP 22 is the act of making and issuing a worthless check or a check that is

dishonored upon its presentation for payment. It is not the non-payment of an obligation which the law punishes. The law is

not intended or designed to coerce a debtor to pay his debt. The thrust of the law is to prohibitthe making of worthless checks

and putting them in circulation. The law punishes the act not as an offense against property, but an offense against public

order.

By definition, a check is a bill of exchange drawn on a bank and payable on demand. It is a written order on a bank, intending

to be drawn against a deposit of funds for the payment of all events, of a sum of money to a certain person therein named or to

his order or to cash and payable on demand. Unlike a promissory note, a check is not a mere undertaking to pay an amount of

money. It is an order addressed to a bank and partakes of a representation that the drawer has funds on deposit against which

the check is drawn, sufficient to ensure payment upon its presentation to the bank. There is therefore an element of certainty or

assurance that the instrument wig be paid upon presentation. For this reason, checks have become widely accepted as a

medium of payment in trade and commerce.

The effects of the issuance of a worthless check transcends the private interests of the parties directly involved in the

transaction and touches the interests of the community at large. The mischief it creates is not only a wrong to the payee or

holder, but also an injury to the public. We find the enactment of BP 22 a valid exercise of the police power and is not

repugnant to the constitutional inhibition against imprisonment for debt.

2 nd

issue. We find no valid ground to sustain the contention that BP 22 impairs freedom of contract. The freedom of contractwhich is constitutionally protected is freedom to enter into "lawful" contracts. Contracts which contravene public policy are not

lawful. 33 Besides, we must bear in mind that checks cannot be categorized as mere contracts . It is a commercial instrument

which, in this modem day and age, has become a convenient substitute for money; it forms part of the banking system and

therefore not entirely free from the regulatory power of the state.

3 rd issue . It is contended that the payee is just as responsible for the crime as the drawer of the check, since without the

indispensable participation of the payee by his acceptance of the check there would be no crime. This argument is tantamount

to saying that, to give equal protection, the law should punish both the swindler and the swindled. The clause does not

preclude classification of individuals, who may be accorded different treatment under the law as long as the classification is no

unreasonable or arbitrary.



4 th issue . It is also suggested that BP 22 constitutes undue or improper delegation of legislative powers, on the theory that the

offense is not completed by the sole act of the maker or drawer but is made to depend on the will of the payee. If the payee

does not present the check to the bank for payment but instead keeps it, there would be no crime. What cannot be delegated is

the power to legislate, or the power to make laws. 35 Which means, as applied to the present case, the power to define the

offense sought to be punished and to prescribe the penalty. By no stretch of logic or imagination can it be said that the power

to define the crime and prescribe the penalty therefore has been in any manner delegated to the payee.

5 th issue . This constitutional provision prohibits the introduction of amendments to a bill during the Third Reading. It is claimed

that during its Third Reading, the bill which eventually became BP 22 was amended in that the text of the second paragraph of

Section 1 of the bill as adopted on Second Reading was altered or changed in the printed text of the bill submitted for approval

on Third Reading. There was some confusion among Batasan Members on what was the exact text of the paragraph in question

which the body approved on Second Reading.

During the deliberations on Second Reading (the amendment period), amendments were proposed orally and approved by the

body or accepted by the sponsor, hence, some members might not have gotten the complete text of the provisions of the bill as

amended and approved on Second Reading. Before the bin was submitted for final approval on Third Reading, the Interim

Batasan created a Special Committee to investigate the matter, and the Committee in its report, which was approved by the

entire body on March 22, 1979, stated that "the clause in question was ... an authorized amendment of the bill and the printedcopy thereof reflects accurately the provision in question as approved on Second Reading. We therefore, find no merit in the

petitioners' claim that in the enactment of BP 22 the provisions of Section 9 (2) of Article VIII of the 1973 Constitution were

violated.

WHEREFORE, judgment is rendered granting the petition in G.R. No. 75789 and setting aside the order of the respondent Judge

dated August 19, 1986. The petitions in G.R. Nos. 63419, 66839-42, 71654, 74524-25, 75122-49, 75812-13 and 75765-67

are hereby dismissed and the temporary restraining order issued in G.R. Nos. 74524-25 is lifted. With costs against private

petitioners. SO ORDERED.

ELVIRA YU OH vs. COURT OF APPEALS and PEOPLE OF THE PHILIPPINES

G.R. No. 125297



Before this Court is a petition for review on certiorari of the decision1 of the Court of Appeals in CA-G.R. No. CR No. 16390,

promulgated on January 30, 1996, affirming the conviction of petitioner Elvira Yu Oh by the Regional Trial Court (RTC), Branch

99, Quezon City and the resolution dated May 30, 1996 which denied her motion for reconsideration.

Petitioner purchased pieces of jewelry from Solid Gold International Traders, Inc., a company engaged in jewelry trading. Due to

her failure to pay the purchase price, Solid Gold filed civil cases against her for specific performance before the RTC of Pasig.

Through its general manager Joaquin Novales III, entered into a compromise agreement to settle said civil cases. The

compromise agreement, as approved by the trial court, provided that petitioner shall issue a total of ninety-nine post-dated

checks in the amount of P50,000.00 each.

Petitioner issued ten checks at P50,000.00 each, for a total of P500,000.00. Novales then deposited each of the ten checks on

their respective due dates with the Far East Bank and Trust Company (FEBTC). However, said checks were dishonored by EBC for

the reason "Account Closed." Dishonor slips were issued for each check that was returned to Novales.

Novales filed ten separate Information, docketed as Criminal Cases Nos. 92-26243 to 92-36252 before the RTC of Quezon City

charging petitioner with violation of Batas Pambansa Bilang 22, otherwise known as the Bouncing Checks Law. The cases were

consolidated and subsequently raffled to Branch 99 of the said RTC. Court finds the accused GUILTY of ten counts of violation

of BP 22 and hereby sentences her to a penalty of one year imprisonment for each count, or a total of ten years, to be served in

accordance with the limitation prescribed in par. 4, Article 70 of the Revised Penal Code and to indemnify complainant the

amount of the checks in their totality, or in the amount of P500,000.00.

Petitioner appealed to the Court of Appeals alleging that: the RTC has no jurisdiction over the offense charged in the ten

informations; it overlooked the fact that no notice of dishonor had been given to the appellant as drawer of the dishonored

checks; it failed to consider that the reason of "closed account" for the dishonor of the ten checks in these cases is not the

statutory cause to warrant prosecution, much more a conviction, under B.P. Blg. 22; it failed to consider that there is only one

act which caused the offense, if any, and not ten separate cases; and it disregarded the definition of what a 'check' is under Sec.

185 of the Negotiable Instruments Law.

Finding the appeal to be without merit, the Court of Appeals affirmed the decision of the trial court with costs against appellant.

First issue – Whether or not the Court of Appeals erred in not giving retroactive effect to R.A. 7690 in view of Article 22 of the

RPC. Laws defining the jurisdiction of courts are substantive in nature and not procedural for they do not refer to the manner of

trying cases but to the authority of the courts to hear and decide certain and definite cases in the various instances of which

they are susceptible.

Third issue – Whether or not the Court of Appeals erroneously construed B.P. Blg. 22.

Petitioner insists the Court of Appeals, in construing that B.P. Blg. 22 embraces cases of " no funds" or "closed accounts" when

the express language of B.P. Blg. 22 penalizes only the issuance of checks that are subsequently dishonored by the drawee

bank for "insufficiency" of funds or credit. And that a postdated check, not being drawn payable on demand, is technically not a

special kind of a bill of exchange, called check, but an ordinary bill of exchange payable at a fixed date. the trial court also

erroneously cited a portion in the case of Lozano vs. Martinez that the "language of B.P. Blg. 22 is broad enough to cover all

kinds of checks, whether present dated or postdated, or whether issued in payment of pre-existing obligations or given in

mutual or simultaneous exchange for something of value," since the same is mere obiter dictum; in the interpretation of the

meaning of a "check", where the law is clear and unambiguous, the law must be taken as it is, devoid of judicial addition or

subtraction.

The Solicitor General counters that a postdated check is still a check and its being a postdated instrument does not necessarily

make it a bill of exchange "payable at a fixed or determinable future time" since it is still paid on demand on the date indicated

therein or thereafter just like an ordinary check.28 It also points out that the doctrine laid down in Lozano vs. Martinez was

reiterated in People vs. Nitafan,29 hence, it can no longer be argued that the statement in the case of Lozano regarding the

scope of "checks" is mere obiter dictum.

Again, we agree with the Solicitor General and find petitioner's claim to be without merit.

The rationale behind B.P. Blg. 22 was initially explained by the Court in the landmark case of Lozano vs. Martinez where we held

that:

The gravamen of the offense punished by B.P. Blg. 22 is the act of making and issuing a worthless check or a check

that is dishonored upon its presentation for payment … The thrust of the law is to prohibit, under pain of penal



sanctions, the making or worthless checks and putting them in circulation. Because of its deleterious effects on the

public interest, the practice is proscribed by law. The law punished the act not as an offense against property, but an

offense against public order.

Petitioner's claim that cases of "closed accounts" are not included in the coverage of B.P. Blg. 22 has no merit considering the

clear intent of the law, which is to discourage the issuance of worthless checks due to its harmful effect to the public. This

Court, in Lozano vs. Martinez , was explicit in ruling that the language of B.P. Blg. 22 is broad enough to cover all kinds of

checks, whether present dated or postdated, or whether issued in payment of pre-existing obligations or given in mutual or

simultaneous exchange for something of value.

In People vs. Nitafan , the Supreme Court reiterated this point and held that:

B.P. Blg. 22 … does not distinguish but merely provides that "[ any person who makes or draws and issues any check

knowing at the time of issue that he does not have sufficient funds in or credit with the drawee bank … which check is

subsequently dishonored … shall be punished by imprisonment … Ubi lex non distinguit nec nos distinguere

debemus. But even if we retrace the enactment of the "Bouncing Check Law" to determine the parameters of the

concept of "check", we can easily glean that the members of the then Batasang Pambansa intended it to be

comprehensive as to include all checks drawn against banks.

The term "closed accounts" is within the meaning of the phrase "does not have sufficient funds in or credit with the drawee

bank".

Second issue - whether or not notice of dishonor is dispensable in the case at bar.

For liability to attach under B.P. Blg. 22, prosecution must also prove that the issuer, at the time of the check's issuance, had

knowledge that he did not have enough funds or credit in the bank of payment thereof upon its presentment.

The presumption that the issuer had knowledge of the insufficiency of funds is brought into existence only after it is proved

that the issuer had received a notice of dishonor and that within five days from receipt thereof, he failed to pay the amount of

the check or to make arrangement for its payment.

In this case, it is not disputed that checks were issued by petitioner and said checks were subsequently dishonored. The

question however is, was petitioner furnished a notice of dishonor? If not, is it sufficient justification to exonerate petitioner

from her criminal and civil liabilities for issuing the bouncing checks?

In cases for violation of B.P. Blg. 22, it is necessary that the prosecution prove that the issuer had received a notice of dishonor.

Indeed, this requirement cannot be taken lightly because Section 2 provides for an opportunity for the drawer to effect full

payment of the amount appearing on the check, within five banking days from notice of dishonor. The absence of said notice

therefore deprives an accused of an opportunity to preclude criminal prosecution.

A perusal of the testimony of the prosecution witness Joaquin Novales III discloses that no personal demands were made on

appellant before the filing of the complaints against her. Thus, absent a clear showing that petitioner actually knew of the

dishonor of her checks and was given the opportunity to make arrangements for payment as provided for under the law, we

cannot with moral certainty convict her of violation of B.P. Blg. 22. The failure of the prosecution to prove that petitioner was

given the requisite notice of dishonor is a clear ground for her acquittal.

WHEREFORE, the assailed Decision and Resolution of the Court of Appeals are hereby REVERSED and SET ASIDE. Petitioner Elvira

Yu Oh is ACQUITTED of the offense of violation of B.P. Blg. 22 on ten counts for insufficiency of evidence. However, she is

ordered to pay complainant Solid Gold International Traders, Inc. the total amount of Five Hundred Thousand Pesos

(P500,000.00) with 12% interest per annum from date of finality of herein judgment.

FERDINAND S. AGUSTIN vs. SPS. MARIANO and PRESENTACION DELOS SANTOS

G.R. No. 168139



Before us is a petition for review on certiorari under Rule 45 seeking a review of the Decision and Resolution of the Court of

Appeals (CA) in CA G.R. SP No. 80586 partly reversing the decision of the Regional Trial Court (RTC), Branch 33, Manila.

Respondent spouses De los Santos are the lawful owners of apartment units whereas petitioner Agustin has continuously

occupied one of respondents' apartment units since 1990 for a monthly rent of two thousand pesos (P2,000.00). The monthly

rental was increased to two thousand three hundred pesos (P2,300.00) in May 1999.

On May 10, 2000, respondents filed a complaint for ejectment against petitioner before Branch 22 of the Metropolitan Trial

Court (MeTC) of Manila. Respondents alleged that they needed to repossess the apartment unit occupied by the petitioner

because their daughter’s children would be studying at the University of Sto. Tomas in Manila.

In a decision dated January 9, 2002, the MeTC, Branch 22 held:

The instant complaint for ejectment lodged by the plaintiffs against the defendants, MUST BE DISMISSED for lack of cause of

action, it appearing that plaintiffs failed to comply with the requirements when the ground for ejectment is personal need of the

premises. The counterclaim is likewise dismissed.

The decision lapsed into finality and was enforced by the respondents through the imposition and collection of the monthly rent

and the corresponding fifteen percent (15%) increase thereon. A few months thereafter, respondents, in a Notice of Termination

dated October 10, 2002, informed petitioner of the termination of the verbal month-to-month contract of lease and gave him

thirty (30) days within which to vacate and peacefully surrender the premises.

The petitioner failed to vacate the premises despite notice. Thus, respondents again filed a complaint for ejectment against

petitioner on the ground of termination of the contract of lease. The second ejectment case, which is the subject of the instant

petition, was filed in Branch 15 of the MeTC of Manila.

MeTC, Branch 15 ruled that petitioner's reliance on res judicata was misplaced because the cause of action in the previous case

is anchored on a different ground. According to the MeTC, the verbal lease contract that existed between the parties on a

month-to-month basis pursuant to Article 1687 of the Civil Code is one with a fixed term, and terminates at the end of each

month, if notice to vacate is properly given.

On appeal, the RTC of Manila reversed the MeTC decision. The court a quo ruled that there is no res judicata because there is

no identity of cause of action. The Court stated that in the first ejectment case decided by Hon. Hipolito dela Vega the ground

for ejectment was based on the need by the lessor of the leased premises, while the case at bar is based on the expiration or

termination. This is erroneous because there is only one cause of action–unlawful detainer–although this cause of action may

give the plaintiffs several reliefs. And when the plaintiffs-appellees filed two separate complaints for these reliefs against the

defendant-appellant, such acts constitute splitting up of the cause of action.

Respondents repaired to the CA, which partially reversed the findings of the RTC. the appellate court decided that there was no

identity of causes of action between the first and second cases of ejectment as different facts and evidence were needed for the

resolution of each case, and consequently, the principle of res judicata as a bar by prior judgment was inapplicable. It was also

found that res judicata in the concept of "conclusiveness of judgment" will not apply since the "personal need" issue decided

upon in the first case is different from and does not encompass any element of the "expiration of lease contract" at issue in the

second case. Lastly, the CA declared that the lease contract between the parties was on a month-to-month basis and that

petitioner should vacate the subject premises because his lease had already expired.

Petitioner filed a motion for reconsideration of said Decision, which was also denied by the appellate court. petitioner is nowbefore us questioning the order of the CA for him to vacate the leased premises.

Res judicata is defined as final judgment or decree on the merits by a court of competent jurisdiction is conclusive of the rights

of the parties or their privies in all later suits on all points and matters determined in the former suit.

The principle of res judicata is applicable by way of: 1) "bar by prior judgment" and 2) "conclusiveness of judgment."

There is "bar by prior judgment" when, as between the first case where the judgment was rendered and the second case that is

sought to be barred, there is identity of parties, subject matter, and causes of action.

But where there is identity of parties in the first and second cases, but no identity of causes of action, the first judgment is

conclusive only as to those matters actually and directly controverted and determined and not as to matters merely involved

therein. This is the concept of res judicata known as "conclusiveness of judgment."



In the case at bar, petitioner seeks to apply the principle of res judicata in its concept of "bar by prior judgment" by pointing out

that the final decision rendered in the first case for ejectment constitutes a bar to the litigation of the second ejectment suit,

the subject of the instant petition.

Res judicata applies in the concept of "bar by prior judgment" if the following requisites concur: (1) the former judgment or

order must be final; (2) the judgment or order must be on the merits; (3) the decision must have been rendered by a court

having jurisdiction over the subject matter and the parties; and (4) there must be, between the first and the second action,

identity of parties, of subject matter and of causes of action.

In the case before us, the existence of and compliance with the first three elements is undisputed. Likewise, there is no issue as

to the identity of the parties in the two actions for ejectment. Hence, the identity of subject matter and the identity of causes of

action between the first and second ejectment cases are the only remaining bones of contention in need of our final

determination concerning the issue of res judicata .

As to the subject matter, we find that there is no identity. In an unlawful detainer case, the subject matter is the contract of

lease between the parties while the breach thereof constitutes the suit’s cause of action . In the present case, the lease

contract subject of the controversy is verbal and on a monthly basis. In these instances, it is well settled that the lease is one

with a definite period which expires after the last day of any given thirty-day period. Following this reasoning, it becomes

apparent that what exists between the parties is not just one continuous contract of lease, but a succession of lease contracts,

each spanning a period of one month. therefore, that the subject matter of first case is a different contract of lease from the

subject matter of the instant case, it is obvious that there is no identity of subject matter between the first ejectment suit and

the ejectment suit subject of the present action.

Since there is no identity of subject matter between the two cases, it is but logical to conclude that there is likewise no identity

of causes of action. A cause of action is the act or omission by which a party violates the legal right of the other. the cause of

action in the second suit only materialized when petitioner refused to vacate the premises despite receipt of the notice of

termination of lease sent by respondents and the expiration of the 30-day grace period given him. Each act of refusal to vacate

by petitioner—one in May 2000 and another in October 2002—breached separate and distinct lease contracts which

consequently gave birth to separate and distinct causes of action.

IN VIEW WHEREOF, the instant petition is DENIED. The decision of the Court of Appeals is AFFIRMED.

PEOPLE OF THE PHILIPPINES vs. HON. DAVID G. NITAFAN and K.T. LIM alias MARIANO LIM

G.R. No. 75954



Failing in his argument that B.P. 22, otherwise known as the "Bouncing Check Law", is unconstitutional , private respondent now

argues that the check he issued, a memorandum check, is in the nature of a promissory note, hence, outside the purview of the

statute. Here, his argument must also fail.

The facts are simple. Private respondent K.T. Lim was charged before respondent court with violation of B.P. 22 in an

Information alleging ––

That on . . . January 10, 1985, in the City of Manila . . . the said accused did then and there wilfully, unlawfully and feloniously

make or draw and issue to Fatima Cortez Sasaki . . . Philippine Trust Company Check No. 117383 dated February 9, 1985 . . . in

the amount of P143,000.00, . . . well knowing that at the time of issue he . . . did not have sufficient funds in or credit with the

drawee bank . . . which check . . . was subsequently dishonored by the drawee bank for insufficiency of funds, and despite

receipt of notice of such dishonor, said accused failed to pay said Fatima Cortez Sasaki the amount of said check or to make

arrangement for full payment of the same within five (5) banking days after receiving said notice.

On 18 July 1986, private respondent moved to quash the Information of the ground that the facts charged did not constitute a

felony as B.P. 22 was unconstitutional and that the check he issued was a memorandum check which was in the nature of a

promissory note, perforce, civil in nature. On 1 September 1986, respondent judge, ruling that B.P. 22 on which the Information

was based was unconstitutional, issued the questioned Order quashing the Information.

Since the constitutionality of the "Bouncing Check Law" has already been sustained by this Court in Lozano v .Martinez and the

seven (7) other cases decided jointly with it, the remaining issue, as aptly stated by private respondent in his Memorandum, is

whether a memorandum check issued postdated in partial payment of a pre-existing obligation is within the coverage of B.P.

22.

A memorandum check is in the form of an ordinary check, with the word "memorandum", "memo" or "mem" written across its

face, signifying that the maker or drawer engages to pay the bona fide holder absolutely, without any condition concerning its

presentment. Such a check is an evidence of debt against the drawer, and although may not be intended to be presented, has

the same effect as an ordinary check, and if passed to the third person, will be valid in his hands like any other check.

A memorandum check comes within the meaning of Sec. 185 of the Negotiable Instruments Law which defines a check as "a bill

of exchange drawn on a bank payable on demand."

But even if we retrace the enactment of the "Bouncing Check Law" to determine the parameters of the concept of "check", we

can easily glean that the members of the then Batasang Pambansa intended it to be comprehensive as to include all checks

drawn against banks.

A memorandum check, upon presentment, is generally accepted by the bank. Hence it does not matter whether the check

issued is in the nature of a memorandum as evidence of indebtedness or whether it was issued is partial fulfillment of a pre-

existing obligation, for what the law punishes is the issuance itself of a bouncing check and not the purpose for which it was

issuance.

WHEREFORE, the petition is GRANTED and the Order of respondent Judge of 1 September 1986 is SET ASIDE. Consequently,

respondent Judge, or whoever presides over the Regional Trial Court of Manila, Branch 52, is hereby directed forthwith to

proceed with the hearing of the case until terminated.

SPS. MANUEL LEY and JANET LEY vs. UNION BANK OF THE PHILIPPINES and COURT OF APPEALSG.R. No. 167961



This petition for review on certiorari assails the Decision of the Court of Appeals dated 18 January 2005, finding petitioners’

complaint before the trial court for recovery of title barred by res judicata .

The Makati case: A Credit Line Agreement was executed between Ley Construction and Development Corporation (LCDC) and

private respondent Union Bank of the Philippines (UBP). Among the securities for the Credit Line Agreement is a Continuing

Surety Agreement executed by petitioners, spouses Manuel and Janet Ley (spouses Ley), in favor of UBP.

LCDC availed of the credit line granted to it and executed the promissory notes in favor of UBP in the total amount

of P18,757,152.78. However, LCDC failed, despite demands, to pay its loan obligation. Consequently, UBP filed against the

spouses Ley and LCDC before the RTC, Branch 139, Makati City.

RTC, Makati City issued a Resolution granting UBP’s Motion for Summary Judgment and ordering LCDC and the spouses Ley to

pay the amount of P18,833,674.86 plus the agreed interest and penalty charges. When UBP moved for the execution of the

Resolution, the new presiding judge denied the motion for execution. On appeal,the Court of Appeals set aside and annulled

the trial court’s denial of the motion for execution. On petition for review, this Court likewise affirmed the invalidity of the order

denying the motion for execution.

The money judgment in its favor having become final and executory, UBP levied on the spouses Ley’s property covered by

Transfer Certificate of Title No. T-21273 of the Register of Deeds of Tagaytay City (Tagaytay property). This levy was annotated

on the certificate of title. The Tagaytay property was sold on execution with UBP as the highest bidder. A certificate of sale was

then issued in favor of UBP. This certificate of sale was registered with the Registry of Deeds of Tagaytay City and annotated on

the original of the title on file with the Register of Deeds on the following day.

The Tagaytay case: Prior to the expiration of the redemption period for the Tagaytay property, the spouses Ley filed against UBP

a complaint for recovery of title before the RTC of Tagaytay City. The spouses Ley alleged that they are the registered owners of

the Tagaytay property and that they entered into a Third Party Real Estate Mortgage over the same property in favor of the

International Corporate Bank, Inc. to secure the loan/credit line accommodation in the amount of P9,702,000.00 granted to

Azkon Refrigeration Industries, Inc.

It is further alleged in the complaint that the International Corporate Bank, Inc. had later on merged with UBP; that as a

consequence, the former’s assets and liabilities were absorbed by the latter as the surviving corporation; that Azkon

Refrigeration Industries, Inc. had already fully paid its obligation with International Corporate Bank, Inc. and/or UBP; that

despite demands, however, UBP refused to release the title to the Tagaytay property to the spouses Ley; that, in view of UBP’s

refusal, the spouses Ley were unable to effect the sale of the Tagaytay property to a willing buyer for an acceptable price; and,

that all the foregoing had prompted the spouses Ley to file the Tagaytay case for recovery of title as well as damages.

UBP filed a motion to dismiss the Tagaytay case on the grounds of 1) bar by prior judgment 2)failure of the complaint to state a

cause of action and 3) failure of the Ley spouses as plaintiffs to attach a copy of the title as well as other pertinent documents

to their complaint. The ground of bar by prior judgment is anchored on the finality of the judgment in the Makati case.

RTC of Tagaytay City denied UBP’s motion to dismiss. UBP then filed before the Court of Appeals a special civil action for

certiorari to annul and set aside the Order of the RTC. UBP imputed grave abuse of discretion to the trial court in denying the

motion to dismiss on the following grounds: 1) that the Tagaytay property sought to be recovered had already been levied and

sold on execution to satisfy the final and executory judgment in the Makati case; 2) that UBP was justified in refusing to release

the title over the Tagaytay property to the spouses Ley because it had already become the owner of the property; 3) and that

the failure to attach a copy of the title to the Tagaytay property as well as other pertinent documents alleged in the complaint

violated the rule on actionable documents as provided in Sec. 7, Rule 8 of the Rules of Court.

On the premise that the property sought to be recovered had already been levied upon on execution and a certificate of sale

covering it issued in the name of UBP, the Court of Appeals held in its Decision that res judicata had already set in to bar the

cause of action for recovery or release of title.

The appellate court also considered the doctrine of judicial stability or non-interference in the regular orders or judgments of a

co-equal court as a barrier to the competence of the trial court to sustain the spouses Ley’s action for recovery of title.

The appellate court ruled that the allegations in the complaint concerning UBP’s refusal to release the title over the Tagaytay

property to the spouses Ley despite full payment of the loan suffice to state a cause of action for recovery of damages.

Accordingly, the Court of Appeals partly granted the petition for certiorari, assailing that res judicata had already set in the case

for recovery or release of title; however, res judicata does not apply in private respondents Spouses Ley’s prayer for recovery of



damages.The spouses Ley filed a motion for reconsideration but this was denied by the appellate court on the ground that the

motion was filed out of time. The spouses Ley then elevated the appellate court’s Decision to this Court through a Petition for

Review on Certiorari.

Merits of the petition: To recall, UBP raised before the trial court several grounds to secure the dismissal of the complaint. Yet it

appears that the trial court considered only the ground of res judicata despite the interposition of other grounds by UBP. Even

so, we agree that it is res judicata that is determinative of question whether the petition should be dismissed or not.

The Court of Appeals categorized the causes of action in the complaint and ruled that while the action for recovery of title is

barred by res judicata , the other causes of action are not so barred. We disagree and hold that res judicata does not bar any of

the causes of action in the complaint.

The doctrine of res judicata provides that a final judgment on the merits rendered by a court of competent jurisdiction is

conclusive as to the rights of the parties and their privies and constitutes an absolute bar to subsequent actions involving the

same claim, demand, or cause of action.

For res judicata to serve as an absolute bar to a subsequent action, the following requisites must concur: (1) the former

judgment or order must be final; (2) the judgment or order must be on the merits; (3) it must have been rendered by a court

having jurisdiction over the subject matter and parties; and (4) there must be between the first and second actions, identity of

parties, of subject matter, and of causes of action.

The present action of the spouses Ley is not barred by res judicata since the previous and the present cases involve different

subject matters and causes of action. A cause of action is the act or omission by which a party violates a right of another. The

subject matter, on the other hand, is the item with respect to which the controversy has arisen, or concerning which the wrong

has been done, and it is ordinarily the right, the thing, or the contract under dispute.

The subject matter in the Makati case is the collection of a sum of money which had already become due and demandable

under the loan transaction between UBP and LCDC whereas the subject matter of the present case, which originated from the

Tagaytay case, is the recovery of title to the Tagaytay property owned by the spouses Ley which had been allegedly withheld

without justification by UBP.

There is no similarity of causes of action between the two cases either. While in the Makati case, the cause of action lies in the

failure of the borrower to pay the loan on due date, the cause of action in the Tagaytay case stemmed from the alleged refusal

of UBP as the surviving corporation in a merger with the original mortgagee bank to release the title to the mortgaged property

to the spouses Ley despite payment of the mortgage debt.

While it is true that a certificate of sale on the Tagaytay property was already issued in favor of UBP, the one year period of

redemption had not yet expired when the complaint for recovery of title was filed by the spouses Ley. It is only upon the

expiration of the redemption period, without the judgment debtor having made use of his right of redemption, does ownership

of the land sold become consolidated in the purchaser.

Finally, the Court cannot support the appellate court’s contention that the action for recovery of title is barred by the doc trine

of judicial stability or non-interference in the regular orders of judgments of a co-equal court on the premise that the levy on

the Tagaytay property in the Makati case was a mere consequence of the judgment for recovery for a sum of money. The

judgment did not order the sale of the Tagaytay property in particular as it was not the subject of the litigation therein.

WHEREFORE, the Decision of the Court of Appeals dated 18 January 2005 is REVERSED insofar as it held that the action of

petitioner spouses Manuel Ley and Janet Ley to recover the Owner’s Copy of Transfer Certificate of Title No. T-21273 covering

their property in Tagaytay City is barred by res judicata . The other pronouncements in said Decision are AFFIRMED. The case is

remanded to the Regional Trial Court of Tagaytay City for further proceedings. Said court is ordered to conduct the appropriate

proceedings and decide the case with deliberate dispatch in accordance with this Decision.

TEMIC SEMICONDUCTORS, INC. EMPLOYEES UNION (TSIEU)-FFW vs. FEDERATION OF FREE WORKERS (FFW), JUAN TAN, RAMON JABAR, andFRANCISCO CRISTOBALG.R. No. 160993



Temic Semiconductors, Inc. Employees Union (TSIEU) is the accredited bargaining agent for the rank-and-file employees of

Temic Telefunken Microelectronics (Phils.) Inc. (TTMPI), and is an affiliate of the Federation of Free Workers (FFW).

In 1995, Liza Dimaano as President of TSIEU, the collective bargaining negotiations between the union and TTMPI fell through.

The union staged a strike, prompting the Secretary of the Department of Labor and Employment (DOLE) to assume jurisdiction

over the labor dispute and to issue a return to work Order. However, some returned to work, while the others continued with

the strike. Those who returned to work were led by Olivia Robles, while those who opted to continue with the strike were led by

Dimaano.

Subsequently, on June 1996, the two groups of TSIEU conducted separate elections of TSIEU officers. Those who continued

striking elected Dimaano as President, while the second group elected Robles as President. The results of both elections were

communicated to the National Capital Region (NCR) Regional Director (RD) of BLR by the respective Commission on Elections.

However, the election results of TSIEU-Dimaano were the ones noted by the Vice-President for Political Affairs of FFW,

respondent Francisco Cristobal.

In July 1996, TSIEU withdrew eight of its pending labor cases from the legal representation of the FFW Legal Center.

On August 1996, the governing board of FFW held an emergency meeting to discuss the two TSIEU elections. It must be noted

at this juncture that Dimaano was a member of the governing board of FFW. Over the objections of Dimaano and on the ground

that the two elections resulted in a crisis of leadership in TSIEU, the FFW governing board decided to place TSIEU under its

receivership. Forthwith, Dimaano resigned from all her positions in the FFW.

Dimaano filed the instant case against FFW and the other private respondents before the NCR RD of BLR for Declaration of

Nullity of Receivership.

Ruling of the Regional Director: The RD held that FFW had no authority to put TSIEU under its receivership and granted the

petition for Declaration of Nullity of Receivership.

On the issue of legal personality, the RD ruled that the requirement of the signatures of 30% of the union membership

necessary to institute a complaint, as provided under Article 241 of the Labor Code, is not applicable since such requirement

refers to a violation involving rights and conditions of membership in labor organizations. What is applicable is the Art. 242 of

the Labor Code.

On the issue of confusion in leadership, FFW is estopped from questioning TSIEU-Dimaano as the VP for Political Affairs of FFW,

Cristobal, indorsed the election of the officers of the TSIEU-Dimaano faction, for which reason the BLR NCR Office issued a

certification attesting to the due election of Dimaano and others.

In fine, the RD held that if TSIEU were indeed guilty of untrustworthiness and disloyalty, as alleged by FFW, receivership is not

the proper remedy but expulsion from the federation after due process of law.

Private respondents appealed before the BLR the above decision of the NCR RD. The NCR RD affirmed the decision of the RD

and dismissed the appeal for lack of merit. Subsequently, the BLR rejected the motion for reconsideration. Order of the RD

became final and executory. RD then issued a Writ of Execution.

BLR Sheriffs issued notice of garnishment to several banks holding FFW accounts. BLR issued an Order at the same day directing

the sheriff to lift notice as there was a need for prior determination of the actual amounts due TSIEU.

TSIEU-Dimaano moved for the reconsideration. Private respondents filed their Motion to Quash Writ of Execution. TSIEU-Robles

likewise filed its Motion for Intervention and/or to Quash the Writ of Execution with Third Party Claim, alleging they had been

duly elected by the members of TSIEU to replace the group of Dimaano.

Ruling of the NCR Regional Director: MOTION FOR RECONSIDERATION is granted. MOTIONs TO QUASH filed by respondent are

dismissed for lack of merit. MOTION FOR INTERVENTION was also denied for lack of merit.

FFW and TSIEU-Robles filed their respective Memoranda of Appeal before the BLR, assailing the above Order of the NCR RD.

Ruling of the Bureau of Labor Relations: BLR reversed the decision of NCR RD, declared the writ of execution null and void.

Notices of garnishment are lifted. TSIEU-Robles appeal was denied for having become moot and academic.



BLR held that writ of execution was null and void as the final and executory order doesn’t enforce to include monetary

judgment. Declaration of nullity of receivership merely includes the turnover of several real and personal properties to TSIEU-

Dimaano. It was improper for the NCR RD to allow and for TSIEU-Dimaano to prove its claims in proceedings after the

declaration of nullity of the receivership became final and executory.TSIEU-Dimaano elevated to the CA.

Ruling of the CA: Petition is DENIED. The challenged resolutions of BLR are hereby AFFIRMED. The CA agreed with public

respondent's disquisition that the writ of execution went beyond the scope of Order.

Petitioners filed Petition for Review on Certiorari on the SC.

The core issue is whether the writ of execution granting the turnover of properties and remittance of monetary claims was

within the terms of the final and executor order sought to be enforced.

The Court's Ruling: It is no dispute that the declaration of receivership by FFW has been duly nullified. The bone of contention is

to what level does such declaration of nullity of receivership extend. Ratio decidendi did not include the issue of property and

monetary claims.

What had been granted was the nullification of the receivership of TSIEU by FFW, no more and no less. Ratio decidendi of the

Order--as distinguished from the fallo or dispositive portion--where the findings of fact and law, the reasons, and evidence to

support such findings including the discussions of the issues leading to their determination are drawn from, likewise obviously

did not include the claim for properties and the remittance of any monetary claim. TSIEU-Dimaano never raised the issue of any

monetary or property claims. They cannot now assert such claims in the enforcement of said final and executory order.

Axiom: "a decision that has acquired finality becomes immutable and unalterable”. A final judgment may no longer be modified

even if the modification is meant to correct erroneous conclusions of fact and law; and whether it is made by the court that

rendered it or by the highest court in the land. This principle extends not only extends to the lower courts but also, to all which

encompasses the judicial system.

The only exceptions to the rule on the immutability of a final judgment are: (1) the correction of clerical errors; (2) the so-

called nunc pro tunc entries which cause no prejudice to any party; (3) void judgments; and (4) whenever circumstances

transpire after the finality of the decision rendering its execution unjust and inequitable.

None of the exceptions obtain in this case. Much less do the nunc pro tunc entries apply to the instant case. Thus, we so hold

that the enforcement of the final and executory Order declaring the nullity of receivership cannot extend to the grant of money

and property claimed by TSIEU-Dimaano. We also agree with the appellate court that the proceedings conducted by the NCR RD

for TSIEU-Dimaano to prove its claims for properties and receivables are null and void as such proceedings do not partake of

the nature of nunc pro tunc entries which cause no prejudice to private respondents.

WHEREFORE, this petition is hereby DISMISSED for lack of merit. The October 30, 2002 Decision and October 22, 2003

Resolution of the CA in CA-G.R. SP No. 62587 are hereby AFFIRMED IN TOTO . Costs against petitioners.

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