Gomeco Metal Corp. v. Court of Appeals

SPECIAL THIRD DIVISION

[G.R. No. 202531. December 5, 2018.]

GOMECO METAL CORPORATION, petitioner, vs.COURT OF APPEALS AND PANAMA ISLAND RESORT AND MARINA CLUB, INC., respondents.

NOTICE

Sirs/Mesdames :

Please take notice that the Court, Third Division, issued a Resolution dated December 5, 2018, which reads as follows:

"G.R. No. 202531 (Gomeco Metal Corporation v. Court of Appeals and Pamana Island Resort and Marina Club, Inc.). — The Court NOTES:

(1) private respondent's Motion (to Refer Instant Case to the En Banc) dated June 28, 2018;

(2) private respondent's Manifestation dated July 2, 2018, stating that its messenger inadvertently failed to include the attachments to its motion to refer the instant case to the Supreme Court En Banc and submitting the attached motion (to refer instant case to the En Banc) for re-filing, including its Annexes;

(3) said motion (to refer instant case to the En banc); and

(4) petitioner's Opposition to Motion to Refer Case to En Banc dated July 14, 2018.

This resolves the motion for reconsideration 1 dated September 27, 2016 of our Decision 2 dated August 17, 2016, which granted the petition for certiorari3 under Rule 65 of the Rules of Court and nullified the Decision 4 dated December 28, 2011 and the Resolution 5 dated June 28, 2012 of the Court of Appeals (CA) in CA-G.R. SP No. 119053 on the ground of grave abuse of discretion amounting to lack or excess of jurisdiction. Consequently, we reinstated the January 5, 2005 6 and March 3, 2011 7 Orders of Branch 75 of the Regional Trial Court (RTC) of Valenzuela City in Civil Case No. 4349-V-94, which granted Gomeco's motion for cancellation of title, and ordered the Register of Deeds (RD) of Iba, Zambales to cancel Pamana Island Resort and Marina Club, Inc.'s (Pamana) title over Pequeña Island and to issue a new title in the name of Gomeco Metal Corporation (Gomeco), 8 following a valid levy and auction of the property where Gomeco was the highest bidder. 9

In our Decision, we held that the CA committed grave abuse of discretion when it held that: (1) there was no valid levy on Pequeña Island; and (2) assuming there was a valid levy, the period of redemption in favor of Pamana has not begun to run in view of the registration of the sheriff's certificate of sale in the wrong registry. 10 cSEDTC

On the first, we emphasized that the January 16, 2003 Resolution 11 of the CA in CA-G.R. SP No. 62391 already held that there was a valid levy and auction of Pequeña Island. This Resolution became final and executory on February 10, 2003. 12 Thus, by ignoring and contradicting the final settlement in CA-G.R. SP No. 62391, the CA went beyond its jurisdiction and violated the principle of res judicata, particularly the conclusiveness of judgment rule. The CA cannot pass upon, and should not have passed upon, the issue pertaining to the validity of the levy on Pequeña Island. The issue was already settled in the final ruling in CA-G.R. SP No. 62391, and such settlement is conclusive upon both Pamana and Gomeco. It cannot be relitigated or redetermined, much less overturned, in any subsequent case between them. Thus, we concluded that the CA's finding in CA-G.R. SP No. 119053 that there was no valid levy on Pequeña Island must be stricken down. 13

In this regard, we struck down the September 17, 2004 Resolution 14 in CA-G.R. SP No. 62391. This Resolution was the CA's basis in declaring that there was no valid levy on Pequeña Island. We held that while it appeared to be affirmative of the January 16, 2003 Resolution in CA-G.R. SP No. 62391, the September 17, 2004 Resolution, in actuality and in effect, varied a very significant import of the former Resolution and of all other Resolutions in CA-G.R. SP No. 62391 — that the levy, the validity of which was sustained under the said case, had for its object no other property but the Pequeña Island itself. We held that the September 17, 2004 Resolution could never have validly altered, amended, nor modified the import of the January 16, 2003 Resolution in CA-G.R. SP No. 62391 in light of the doctrine of immutability of judgment which preserves the final ruling in CA-G.R. SP No. 62391, as embodied in the January 16, 2003 Resolution, from any alteration or modification. 15

On the second, we held that when real property is levied and sold on execution pursuant to a final judgment, the rules allow the judgment debtor (or a redemptioner) to redeem the property within one year from the date of the registration of the certificate of sale. "Registration of certificate of sale" means registration of such certificate with the RD. 16

In this case, there was wrongful registration of the certificate of sale. On March 28, 2001, the sheriff's certificate of sale was registered with the RD of Iba, Zambales under the Registry of Unregistered Properties even though Pequeña Island was registered under TCT No. T-38774 in the name of Pamana. The erroneous registration was a consequence of the following facts: (1) the notice of levy and the notice of sheriff's sale prepared by Sheriff Jaime T. Montes incorrectly depicted Pequeña Island as unregistered property; and (2) Pamana, which admitted owning Pequeña Island and was furnished with the notices, knowingly allowed the incorrect depiction of the status of the island to prevail by doing nothing to correct it. We concluded that the incorrect depiction of the sheriff, coupled with Pamana's bad faith, jointly contributed to the incorrect registration of the certificate of sale covering Pequeña Island in the RD.

The registration, under these facts, should be considered as substantially compliant and sufficient to commence the running of the period for redemption. Thus, the redemption period of Pamana began on March 28, 2001, the date of the registration of the certificate of sale, and expired one year later. Since Pamana never exercised its right of redemption within one year from March 28, 2001, the issuance of a sheriff's final deed of sale 17 over Pequeña Island in favor of Gomeco on January 29, 2003 is valid. SDAaTC

In its motion for reconsideration, 18 Pamana argues that we erred in declaring that the CA committed grave abuse of discretion amounting to lack or excess of jurisdiction. Pamana raises the following arguments: (1) while the Decision of the CA in CA-G.R. SP No. 62391 and the other related cases have attained finality and become immutable, these cases did not uphold the validity of the levy and sale of the entire Pequeña Island; (2) the value of Pequeña Island is way in excess of the judgment debt of P1,350,000.00. To sustain our Decision dated August 17, 2016 would constitute unjust enrichment on the part of Gomeco at Pamana's expense; and (3) to sustain our Decision dated August 17, 2016 is tantamount to countenancing the sheriff's gross misconduct and fraud. 19

We deny the motion for reconsideration.

For clarity, we quote the contents of the certificate of sale and the relevant rulings of the CA in CA-G.R. SP No. 62391.

The Certificate of Sale 20 dated March 22, 2001 reads:

xxx xxx xxx

That I, JAIME T. MONTES, Sheriff IV x x x, sell at public auction x x x to the highest bidder Gomeco Metal Corporation, x x x for the sum of P2,065,000.00 x x x, the described real property herein below, together with all the improvements existing thereon, to wit:

Pequeña Island (Snake Island), Brgy. Calapandayan, Subic Bay, Zambales

 

North:	Subic Bay (Sandy Shore)
East:	Subic Bay (Sandy Shore)
South:	Subic Bay (Sandy Shore)
West:	Subic Bay (Sandy Shore)

 

xxx xxx xxx

That the amount bid is TWO MILLION SIXTY-FIVE THOUSAND (P2,065,000.00) PESOS as purchase price of the property together with all the improvements existing has not been paid in CASH by herein buyer-judgment creditors Gomeco Metal Corporation for the reason that the said amount does not exceed with the total obligation of herein defendant-judgment debtor and is therefore credited only to the amount of indebtedness of the said defendant judgment debtor in this particular case.

NOW THEREFORE, for and in consideration of the above-stated real property together with all the improvements existing thereon, the undersigned Sheriff x x x has executed the Certificate of Sale of the real property together with all the improvements existing thereon, in favor of the plaintiff x x x. 21 (Emphasis supplied.)

On February 19, 2002, the CA issued its Decision 22 in favor of Pamana, nullifying the levy and sale of Pequeña Island on the ground that the provisions of Rule 39 of the Rules of Court were not complied with. Nevertheless, the CA held that execution proceedings may issue against Pamana until it discharges its indebtedness. The dispositive portion of the CA Decision reads:

WHEREFORE, premises considered, the Petition is GRANTED and the Sheriff's Notice of Sale and the Public Auction sale are declared NULL and VOID in so far as they are not in accordance with the provision of Rule 39 but execution proceedings may issue under the execution order of the Regional Trial Court of Valenzuela City, Branch 75 dated May 7, 1998 until Petitioner fully discharges its indebtedness.

SO ORDERED. 23

The CA granted Gomeco's motion for reconsideration via its Resolution dated July 9, 2002. 24 It declared that the levy and sale of the property is valid to the extent of P1,350,000.00, plus legal interest of 12% per annum counted from the date of the compromise agreement on January 9, 1997 plus other lawful fees and other valid expenses in the implementation of the levy and sale of the property. Pertinent portions of the Resolution read:

The sheriff's error in the computation of the levied amount of P2,065,000.00 instead of P1,350,000.00 plus legal interest is not capricious or whimsical as the same was done in good faith. What he did was to record the bid price of P2,065,000.00 made by petitioner as the highest bidder and the amount of P1,800,000.00 made by JVC Justo and Company [pursuant] to the Notice of Levy.

Secondly, to nullify altogether the levy and sale on execution would render all efforts of [Gomeco] to recover the just and valid indebtedness of [Pamana] from [Gomeco]. This Court, in the exercise of its sound judicial discretion and in the interest of substantial justice, reduces the amount levied upon from P2,065,000.00 to P1,350,000.00 plus legal interest and other lawful fees and expenses in the levy and sale of the subject property, the lawful amount indicated in the decision of the trial court, x x x

The sheriff is directed to submit to the court a quo, furnishing thereto the petitioner, the computation of the 12% per annum interest and other lawful and legal expenses in the sale and levy of the property. The excess of P1,350,000.00 plus legal interest of 12% per annum, other lawful fees and other valid expenses from the levied amount of P2,065,000.00 is set aside and declared null and void. acEHCD

WHEREFORE, premises considered, the decision of this Court dated 19 February 2002 is hereby MODIFIED. The levy and sale of the subject property is hereby declared valid to the extent of P1,350,000.00 plus legal interest of 12% per annum counted from the date of the compromise agreement on January 9, 1997, other lawful fees[, and] other valid expenses in the implementation of the levy and sale of the subject property. 25 (Emphasis supplied.)

On January 16, 2003, the CA issued its Resolution 26 deleting the 12% legal interest awarded to Gomeco. All the other aspects of the CA's Decision dated July 9, 2002 were affirmed.

Pamana did not move to reconsider nor appeal these issuances. Consequently, on February 10, 2003, an Entry of Judgment 27 was issued.

Thus, and contrary to Pamana's arguments, it is clear from the CA's pronouncements that what was levied and sold during the auction sale was the entire Pequeña Island, and not just personal properties found in the island. The certificate of sale also clearly indicates that it was the entire Pequeña Island, including all the improvements thereon, which was levied and sold. Save for the levied amount, which was modified from P2,065,000.00 to P1,350,000.00, the CA sustained the validity of the levy and auction sale as well as the certificate of sale which was executed as a result thereof. This finding has become final and executory.

It is too late in the day for Pamana to assail the validity of the levy and sale of the entire Pequeña Island and contend that only the personal properties inside the island were levied and sold. The doctrine of res judicata, particularly the principle of conclusiveness of judgment, bars the relitigation of this issue. In Tala Realty Services, Corp., Inc. v. Banco Filipino Savings & Mortgage Bank, 28 we explained:

[T]he doctrine of [conclusiveness] of judgment, otherwise known as "preclusion of issues" or "collateral estoppel," x x x is embodied in the third paragraph of Rule 39, Section 47 of the Rules of Civil Procedure:

Section 47. Effect of judgments or final orders. — The effect of a judgment or final order rendered by a court of the Philippines, having jurisdiction to pronounce the judgment or final order, may be as follows:

xxx xxx xxx

(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 or final order which appears upon its face to have been so adjudged, or which was actually and necessarily included therein or necessary thereto. (Emphasis supplied.)

Conclusiveness of judgment is a species of res judicata and it applies where there is identity of parties in the first and second cases, but there is no identity of causes of action. Any right, fact, or matter in issue directly adjudicated or necessarily involved in the determination of an action before a competent court in which judgment is rendered on the merits is conclusively settled by the judgment therein, and cannot again be litigated between the parties and their privies whether or not the claim, demand, purpose, or subject matter of the two actions is the same. Thus, if a particular point or question is in issue in the second action, and the judgment will depend on the determination of that particular point or question, a former judgment between the same parties or their privies will be final and conclusive in the second if that same point or question was in issue and adjudicated in the first suit. Identity of cause of action is not required but merely identity of issue. 29

While conclusiveness of judgment does not have the same barring effect as that of a bar by former judgment that proscribes subsequent actions, it, nonetheless, estops the parties from raising in a later case the issues or points that were raised and controverted, and were determinative of the ruling, in the earlier case. In other words, the dictum laid down in the earlier final judgment or order becomes conclusive and continues to be binding between the same parties, their privies, and successors-in-interest, as long as the facts on which that judgment was predicated continue to be the facts of the case or incident before the court in a later case; the binding effect and enforceability of that earlier dictum can no longer be relitigated in a later case since the issue has already been resolved and finally laid to rest in the earlier case. 30 SDHTEC

In this light, we affirm our pronouncement in our Decision dated August 17, 2016. The CA's disposition in CA-G.R. SP No. 62391 should have had a preclusive effect on the subsequent case, CA-G.R. SP No. 119053, as to all matters settled in the said Resolution, including the validity of the levy on Pequeña Island. In other words, the question on the validity of the levy and sale of the entire Pequeña Island has been finally and conclusively settled. Hence, this question cannot be raised again even in a different proceeding involving the same parties. Although the action instituted in this case (one for nullification of the RTC's Orders directing the issuance of a new title in the name of Gomeco) is technically different from the action for nullification of the levy and auction sale instituted by Pamana in CA-G.R. SP No. 62391, as we held in Tala Realty Services Corp., Inc.31 and Tan v. Court of Appeals, 32 "the concept of conclusiveness of judgment still applies because under this principle, identity of causes of action is not required but merely identity of issues. Simply put, conclusiveness of judgment bars the relitigation of particular facts or issues in another litigation between the same parties on a different claim or cause of action." 33

As Pamana's other arguments are anchored on its position that the validity of the levy and sale of the entire Pequeña Island can still be assailed, there is no more need to rule on them.

WHEREFORE, the instant motion for reconsideration is DENIED for lack of merit.

SO ORDERED."

Very truly yours,

(SGD.) WILFREDO V. LAPITAN

Division Clerk of Court

 

Footnotes

1.Rollo, pp. 598-621.

2.Id. at 570-595; penned by Associate Justice Jose Portugal Perez and concurred in by Associate Justices Presbitero J. Velasco, Jr., Diosdado M. Peralta, Bienvenido L. Reyes, and Francis H. Jardeleza.

3.Id. at 188-220.

4.Id. at 56-74; penned by Associate Justice Samuel H. Gaerlan and concurred in by Associate Justices Amelita G. Tolentino and Ramon R. Garcia.

5.Id. at 102.

6.Id. at 472; rendered by Acting Presiding Judge Dionisio C. Sison.

7.Id. at 173-187; rendered by Acting Presiding Judge Jose C. Fortuno.

8.Id. at 186, 472.

9.Id. at 174.

10.Id. at 580-592.

11.Id. at 111-112.

12.Id. at 132.

13.Id. at 580-585.

14.Id. at 113-115.

15.Id. at 584-587.

16. Id. at 588-589.

17. Id. at 127-128.

18. Supra note 1.

19. Rollo, pp. 599-601.

20. Id. at 107.

21. Id.

22. Rollo, pp. 343-348. Penned by Associate Justice Eugenio S. Labitoria and concurred in by Associate Justices Teodoro P. Regino and Rebecca De Guia-Salvador.

23. Id. at 348.

24. Id. at 350-352.

25. Id. at 351-352.

26. Supra note 11.

27. Rollo, p. 132.

28. G.R. No. 181369, June 22, 2016, 794 SCRA 252.

29. Id. at 262-263. Citations omitted.

30. Degayo v. Magbanua-Dinglasan, G.R. No. 173148, April 6, 2015, 755 SCRA 1, 12-13.

31. Tala Realty Services Corp., Inc. v. Banco Filipino Savings & Mortgage Bank, supra note 28.

32. G.R. No. 142401, August 20, 2001, 363 SCRA 444.

33. Id. at 450, (Citation omitted.); Tala Realty Services Corp., Inc. v. Banco Filipino Savings & Mortgage Bank, supra note 28 at 265.