* Stare DecisisEl Pueblo Filipinas vs. Marcaida [GR No. L-953, 09/18/47]Tala Realty vs. Banco Pilipinas [GR No. 137980, 06/20/00]Tan Chong vs. Secretary of Labor [79 Phil. 249 (1947)]

* Res JudicataAgilent Technologies vs. Integrated Silicon Technology [GR No. 154618, 04/14/04]Cayana vs. CA [GR No. 125607, 03/18/04]Urabana Velasco vs. Peoples Homesite [GR No. L-39674, 01/31/78]

* Law of the CaseArgel vs. Pascua [A.M. No. RTJ-94-1131, 08/20/01]Buaya vs. Stronghold [GR No. 139020, 10/11/00]Solid Manila Corporation vs. Bio Hong Trading [GR No. 90596, 04/08/91]JM Tuason vs. Mariano [GR No. L-33140, 10/23/78]Uy Lee vs. CA [68 SCRA 196, 11/28/75]

* Finality of Decisiono Echegaray vs. Secretary of Justice [301 SCRA 96, 01/19/99]o Buaya vs. Stronghold [GR No. 139020, 10/11/00]

Legal Case of Stare DecisisDoctrine or policy of following rules or principles laid down in previous judicial decisions unless they contravene the ordinary principles of justice

- let the decision stand- The policy of courts to abide by or adhere to principles established by decisions in earlier cases.- The principle of stare decisis was not always applied with uniform strictness. the principle of stare decisis has always been tempered with a conviction that prior decisions must comport with notions of good reason or they can be overruled by the highest court in the jurisdiction.

G.R. No. L-953 September 18, 1947EL PUEBLO DE FILIPINAS,querellante-apelado,vs.PEDRO MARCAIDA,acusado-apelante.D. Victoriano H. Endaya en representacion del apelante.El Procurador General Auxiliar Sr. Ruperto Kapunan,Jr., y el Procurador Sr.Esmeraldo Umali en representacion del Gobierno.(From Spanish to English) PABLO, J .: Satrata of an appeal by Peter Marcaidaque was sentenced for the crime of treasonafter LaVista corresponding to the penalty of reclusion perpetua with the accessorypenalties prescribed by law and to pay a fine of P10, 000 and the costs of Juico. Theappellant points out three errors incurred, according to him, the Court of Pueblo.1.oCITIZENSHIP Declaring loyalty and accused were sufficiently proven; 2D Givingcredit to the testimony of prosecution witnesses, and 3 . or Al convict the accused of the charge No. 3.

The defense contends that the evidence of record cuindadania not prove thedefendant's alliance and Philippine Commonwealth algobierno. The transcript of theshorthand notes Aue says the defendant is natural Lopez (a native of Lopez). Thedefense argues that the witness testified in Tagalog saying: "Taga Lopez" and said"ay sa panganak Lopez." Aperece No such thing on the record. If true, it is strange or that counsel did not request the Juzgadoque order the court reporter to do so statedin his notes. When a party is not satisfied with the traduction of a statement of awitness should be asked to enter in cars ne only translation but also translated theoriginal statement, failing, correct sepresumira official interpreter's translation.

But even admitting? says the defense? that the defendant was natural for Lopez,Quezon province, its cuidadaniafilipina not properly tested. In support of thiscontention invoked Article IV of the Constitution, which came into force on November 15, 1935. (Article XVI, Section 6, Constitution.) The hearing of this case took lugarelJuly 15, 1946. If the defendant was I born, for example, a day after the Constitutioncame into force on the day of the hearing was not more than ten years and eightmesesde age, and then committed the offense at the age of about nine to years now. Although the record shows sunacimiento date, however we are sure that it was achild? Or so old when I go into view. No querallado the prosecutor would have aserious crime. Certainly, not born before and after entering into force the Constitution.Can not be accepted, therefore, its provisions.

Article 2 of the Jones Act approved by Congress on August 29, 1916, provides asfollows: "That all the people of the Philippines that the April 11 of milochocientosninety-nine were Spanish subjects? Oles and then resided quea in these islands, andtheir children born after that date will be considered and taken as citizens of thePhilippine Islands, excepting those who have preferred to retain their loyalty tolaCorona of Espaa accordance with the provisions of the Peace Treaty between theUnited States and Espaa, signed in Paris on December 10 of 1898, and with theexception of those that after that date have been from another country CITIZENS: ....

Article 4 of the Constitutive Act of the Philippines dated 1 July 1902, reads as follows:"All inhabitants of the Philippines residing therein and deabril eleven of 1899 wereSpanish subjects? oles residents in these islands and their children born after thatdate, shall be deemed and held as citizens of the Philippines and as such conderechoto the protection of the United States, excepting those who have eligado retain their loyalty to the Crown of Spain accordance with the provisions of the Treaty of Peacebetween the United States and Espaa signed in Paris on December 10 of 1898.

The defendant is called Peter Marcaida. By its name, can be Filipino, both Spanishand South American. Nohay proof that a resident of the Philippines and subject bothSpanish on April 11, 1899. If I was a resident and was not subject both Spanish couldnot acquire Filipino because CITIZENSHIP would remain abroad.

If it was subject both Spanish and resided in the Philippine Islands on April 11, 1899,automatically became cuidadanofilipino unless CITIZENSHIP opted to retain bothSpanish, but since there is such evidence, the presumption is that the is Filipino.

If born after the April 11, 1899 to parents who were subjects both Spanish follow thenationality of those: both Spanish, if their parents have wanted to retain their loyaltywing Crown Espaa, and Filipino, if they chose to lose . No evidence presented inone way or another: can serentonces both Spanish and Filipino.If born after the April 11, 1899 of Filipino parents is Filipino.

It may happen that a descendant of a South American has been established in theprovince of Quezon after the signing of the Treaty of Paris, when his father refused touse the provisions of the naturalization law, then the defendant is abroad: seguenationality his father.

If a descendant of a cuidadano both Spanish has started to reside in the Philippinesafter the Treaty of Paris, would continue to be both Spanish unless you naturalized.Nor is there evidence to that effect, then it is both Spanish, abroad.

Paz Chua Uang by the mere fact of being born in the Philippines was declaredbecause it was sibdita Philippine espa? Ola or daughter of a subject both Spanish on April 11, 1899. (Chua v. Secretary of Labor, 68 Phil., 649.) This doctrine implicitlyrevoked Roa against Insular Collector of Customs (23 Phil., 321) and subsequent.(Va? Insularde Manager or against Customs, 23 Phil., 491, United States v. TianseOng, 29 Phil., 352; United States against Ang, 36 Phil., 915, Go Julian against theGovernment Philippine Islands, 45 Phil., 301; Haw against Insular Collector of Customs, 59 Phil., 646.) In the case of Torres and Gallofin against Tan Chim vezlaadopted another theory is sitting in the matter of Roa, but The Court was divided inthe ratio of four for three. Elactual Chief Justice and Judge Imperial were dissenters.The judge felt that the simple Villareal birth in the Philippines not cuidadano makesone Filipino, but concurred in part because of Roa ladoctrina was applying for more than 20 years. The principle of stare decisis is the main reason that prompted most tore-adopt the theory of Roa. In his dissent, the current President of the Court said:The Majority says nothing in support of the correctness of theRoa ruling, and seekssimply to justify its continued observance upon the fact That it "had been adhered toand accepted for more than 20 years before the adoption of the Constitution," andThat not " Also only this Court but lower courts had consistently and invariablyFollowed it, the executive and administrative agencies of theGovernment hadtheretofore abide by it, and the public generally had acquiesced in it. I do not yield tothis court policy. If we induced the Government and the public to follow and accept anerror for some time, it does not seem to be a good policy to continue inducing them tofollow and accept the same error discovered eleven. The rule of stare decisis doesnot apply to the Extent of perpetuating an Error (15 CJ, p. 918.) It is the duty of everycourt to review its own decisions without fear and reluctance to revise them (Baker vs.Lorillard, 4 NY, 257.) As was well said in a case, " I hold itto be the duty of this courtto examine its freely own decisions, and, When That It Has Fallen satisfied into amistake, to correct the error by overruling its own decision. An Acknowledged mistakemust be more venerable and more inveterate than it can be made by any singledecision before it can claim upon the principle of Impunity stare decisis. "(Vs. Leavitt.Blatchaford, 17 NY, 521, 523.)" Precedents are to Be Regarded As the greatstorehouse of experience, not always to be Followed, but to be looked to as beaconlights in the progress of judicial investigation. "(Per Bartley, CJ, in Leavitt vs. Morrow,6 Ohio St., 71, 78.) Their "authority must yield to the force Often of reason, and to theParamount Demands of justice as well as to the decencies of civilized society, andthe law ought to speak with a voice responsive to These demands." (Norton vs .Randolph, 176 Ala., 381, 383, 58 S. 283.) "(Torres and Gallofin against Tan Chim, 69Phil., 518.)

In matters of Tan Chong v. Secretary of Labor, p. 249, ante, and Lam Swee Sang v.Commonwealth of the Philippines, p. 249, ante, we have stated definitivelyabandoned this theory and adopted the deChua v. Secretary of Labor. The reason issimple. The theory of jus soli in America is absolute elsimple American birth According to its constitution and the decision in United States v.. Wong Kim Ark (169U. S., 649). The American Constitution never came into force in the Philippines. Thetheory of jus soli in the Philippines in accordance with the law of 1 July 1902, passedby the U.S. Congress that, under the Treaty of Paris, is one that has dedeterminar parole: that the Philippines-born Filipino citizen with esconsiderado if a resident andsubject both Spanish or child of a resident and subject both Spanish on April 11,1899. If a foreigner or child of an alien in aqeulla date can not be cuidadano Filipino.The defendant then, according to the evidence enautos may be Filipino or foreigner.

Under the Treason Act No. 292 of the Civil Commission, any resident in thePhilippines, owing allegiance to the UnitedStates or the Government of the PhilippineIslands, or war will formare heciere common cause with their enemies and helpingthem socorriendoles within or outside those Islands, the crime committed treason.The section 1 of the Act is unasimple transplantation over the provisions of theCriminal Code which reads as American FOLLOWING: "Whoever, Owing allegianceto the United States, levies war against them or adhere to Their enemies, giving themaid and comfort Within the United States or elsewhere, is guilty of treason. " (Sec. 1,Crim. Code: RS, sec. 5331; Mar. 4.1909, c. 321, sec. 1, 35 Stat., 1088.)

"Treason against the United States," says the American Constitution, "shall Consistonly in levying against them, or in adhering to Their Enemies, giving them aid andcomfort." (Section 3 [1], Article III.)

In both American and domestic extranjros can commit the crime of treason.Foreigners owe allegiance to the government of America during the time of hisresidence. (Carlisle vs. U.S., 21 Law. Ed., 426; Raditch vs. Hutchins, 24 Law. Ed.,409.) The British hold the same theory. (De Jager vs. Attorney General of Natal, 8 Ann. Cas., 76.) Need not be a U.S. Citizen for them to commit the crime of treason.But the Revised Penal Code have excluded the foreign nationals can only commit. Article 114 reads: "Whoever, owing allegiance to the United States or theGovernment of the Philippine Islands, sinser of foreign nationality, I do them formarewar or common cause with their enemies, helping or socorriendoles inside or outsidethese Islands shall be punished with the penalties of reclusion temporal to death anda fine not exceeding twenty thousand dollars. " Executive Order No.44, recognizingthat it was not possible under the Revised Penal Code punish for the crime of treasonagainst foreigners living in the Philippines who have helped the enemies, amended Section 114, are adding to a paragraph of tenor FOLLOWING: "Likewise, any alien,residing in the Philippine Islands, who commits acts of treason as defined inparagraph 1 of this article Shall be punished by prision mayor to death and Shall paya fine not to Exceed 20,000 pesos." (Executive Order No. 44, May 31, 1945.)

If the defendant is Filipino, owing allegiance to the Commonwealth Government andmust be condemned for treason, but sies abroad can not be punished for actscommitted prior to the amendment of Article 114 of the Revised CodigoPenal. Asevidence of unamanera not establish clear that the defendant is Filipino, can not becriminally responsible for the crime of treasonIt reverses the judgment appealed. He ordered his immediate release the costs of trade.

Case Digest onEl Pueblo Filipinas v MarcaidaF: Respondent appeals for the decision of lower court finding him guilty of treason. He was allegedly helping Japanese occupants in arresting Filipinos thought to be guerillas. He contends that he should not be tried by the court on account that his nationality and citizenship are undetermined, citing previous cases under the doctrine of stare decisis where a limitation on the application of jus soli for citizenship was established.

I: Whether stare decisis is applicable at the case at bar

R: No. The doctrine of stare decisis does not apply to the extent of perpetuating an error. The doctrine stands to be corrected once it was found out that a previous judgment was erroneous.

Case Digest onEl Pueblo Filipinas v MarcaidaF: Respondent appeals for the decision of lower court finding him guilty of treason. He was allegedly helping Japanese occupants in arresting Filipinos thought to be guerillas. He contends that he should not be tried by the court on account that his nationality and citizenship are undetermined, citing previous cases under the doctrine of stare decisis where a limitation on the application of jus soli for citizenship was established.

I: Whether stare decisis is applicable at the case at bar

R: No. The doctrine of stare decisis does not apply to the extent of perpetuating an error. The doctrine stands to be corrected once it was found out that a previous judgment was erroneous.

TALA REALTY SERVICES CORP., petitioner, vs. BANCO FILIPINO SAVINGS AND MORTGAGE BANK, respondent.D E C I S I O NYNARES-SANTIAGO, J.: Slxmis

The instant Petition presents a classic example where the application of the principle of stare decisis comes into play.

The facts may be summarized as follows:Sometime in 1979, respondent Banco Filipino Savings and Mortgage Bank faced a legal problem with respect to its branch site holdings. Republic Act No. 337, otherwise known as the General Banking Act, provides that banks may only invest in real estate up to fifty percent (50%) of their net worth.[1] This ceiling on real estate holdings posed a bar to respondents plans for expansion and to address the problem, its major stockholders agreed to set up an entity to which its existing branch sites may be unloaded. The said entity would also acquire new branch sites for it, with all such branch sites, including those unloaded, to be leased to respondent bank. It was thus that petitioner was organized, its name TALA being an acronym of four (4) of the major stockholders and directors of respondent, namely: Antonio Tiu, Tomas B. Aguirre, Nancy Lim Ty and Pedro B. Aguirre. Missdaa

On August 25, 1981, pursuant to the foregoing arrangement, respondent sold eleven (11) real estate properties housing its branch sites to petitioner, including the Davao branch site subject of the instant suit. Immediately following the sale, petitioner leased the same branch sites to respondent. According to respondent, petitioner was merely holding out such properties for it for a three percent (3%) per annum add-on to their carrying cost. Respondent further claims that it was part of their agreement that the said properties would be returned to it at its pleasure at the same transfer price.

At present, therefore, there stand pending cases filed by respondent against petitioner for reconveyance of all such branch sites held by petitioner on the ground that the latter is a mere trustee of respondent.

The present Petition, however, stems from an action for ejectment wherein the issue was which of two (2) different contracts of lease presented by each party governs them. For its part, petitioner presents an 11-year amended lease contract allegedly executed on August 25, 1981 before Notary Public Generoso Fulgencio. On the other hand, respondent presents a 20-year lease contract executed on the same date, August 25, 1981, but before Notary Public Jose Dimaisip.

The lease arrangement subject of this case also covered the other branch sites held by petitioner in other locations, i.e., Malabon, Sta. Cruz, R. Hidalgo, Paraaque, Marikina, Malolos, Cabanatuan, Lucena, Urdaneta, La Union, Iloilo and Cotabato. Aside from the present case, therefore, other similar cases for ejectment have been filed where, ultimately, the question of which among the two lease contracts is valid becomes an issue.

Under the terms of the eleven-year amended contract presented by petitioner, the lease expired on August 31, 1992. Petitioner claims that thereafter, the lease was extended on a month-to-month basis on the condition that whatever terms and conditions are agreed upon would retroact to September 1, 1992. The parties negotiations failed to yield any results, whereupon petitioner informed respondent that the rental rates shall be those it submitted to the latter, which were based on a study by the Asian Appraisal Co., Inc., retroactive to September 1, 1992. More particularly, rates were as follows: Two Hundred Thousand Eight Hundred Forty Pesos (P200,840.00) monthly with a rental escalation of ten percent (10%) per year, with four months deposit, four months advance deposit, and a Five Hundred Thousand Peso (P500,000.00) goodwill.

Respondent refused to comply with these terms. Instead, it continued to pay rent in the old monthly rate until March 31, 1994, when it totally ceased paying any rent. This prompted petitioner to demand from respondent, in a letter dated April 14, 1994, payment of its accrued rentals. Petitioner also gave notice to respondent that at the end of the month, the month-to-month lease over the premises would no longer be renewed. This was followed by a letter, dated May 2, 1994, demanding that respondent pay its obligations under the lease and vacate the premises. Sdaadsc

On March 27, 1995, petitioner instituted a Complaint for Ejectment against respondent before the Municipal Trial Court of Davao City, docketed as Civil Case No. 2109-95. On June 5, 1995, respondent filed its Answer. After the submission of the parties respective Position Papers, the court a quo rendered its Decision on July 20, 1995,[2] dismissing the Complaint on the ground of lack of jurisdiction, after finding that the real issue, i.e., which of the two contracts of lease was controlling, was not capable of pecuniary estimation.

On appeal, the Regional Trial Court of Davao City affirmed the decision in toto on June 13, 1996.[3] With the denial of its Motion for Reconsideration, petitioner filed a Petition for Review with the Court of Appeals,[4] docketed as CA-G.R. SP No. 48667.

On January 12, 1999, the Court of Appeals rendered its now questioned Decision,[5] holding that both lower courts erred in refusing to exercise jurisdiction over the case when the issue of validity of lease contract is intertwined with the issue of possession. However, it dismissed the Petition to maintain judicial stability and consistency, it appearing that in other similar ejectment suits brought before the Court of Appeals, the twenty-year lease contract presented by respondent had been upheld. Petitioners Motion for Reconsideration was granted in that respondent was ordered to pay unpaid rentals to petitioner.[6] Subsequently, however, on Motion for Reconsideration of respondent, the Court of Appeals reversed itself and revoked its order for payment of back rentals.[7]

Petitioner now seeks a reversal of the Decision of the Court of Appeals upon the following grounds

"I

THE HONORABLE COURT OF APPEALS ERRED IN CONSIDERING THE RULING OF THE COURT IN CA-G.R. NO. 39104 AS THE LAW OF THE CASE BETWEEN HEREIN PARTIES.

II

THE HONORABLE COURT BELOW ERRED IN NOT EJECTING RESPONDENT FROM THE LEASED PREMISES."[8]

In its favor, respondent argues that "only decisions of the Supreme Court establish jurisprudence or doctrines." And that is exactly what we are faced with at present.

On February 17, 2000, the Second Division of this Court, through Mr. Justice Sabino R. De Leon, Jr., rendered a Decision in G.R. No. 129887 between the same parties, this time involving respondents Urdaneta, Pangasinan branch, finding the eleven-year lease contract presented by petitioner as a forgery and consequently upholding the validity of the twenty-year lease contract. Resolving this identical issue, the Decision states, to wit - Rtcspped

"Second. Petitioner Tala Realty insists that its eleven (11)-year lease contract controls. We agree with the MTC and the RTC, however, that the eleven (11)-year contract is a forgery because (1) Teodoro O. Arcenas, then Executive Vice-President of private respondent Banco Filipino, denied having signed the contract; (2) the records of the notary public who notarized the said contract, Atty. Generoso S. Fulgencio, Jr., do not include the said document; and (3) the said contract was never submitted to the Central Bank as required by the latters rules and regulations (Rollo, pp. 383-384.).

Clearly, the foregoing circumstances are badges of fraud and simulation that rightly make any court suspicious and wary of imputing any legitimacy and validity to the said lease contract.

Executive Vice-President Arcenas of private respondent Banco Filipino testified that he was responsible for the daily operations of said bank. He denied having signed the eleven (11)-year contract and reasoned that it was not in the interest of Banco Filipino to do so (Rollo, p. 384). That fact was corroborated by Josefina C. Salvador, typist of Banco Filipinos Legal Department, who allegedly witnessed the said contract and whose initials allegedly appear in all the pages thereof. She disowned the said marginal initials (Id., p. 385).

The Executive Judge of the RTC supervises a notary public by requiring submission to the Office of the Clerk of Court of his monthly notarial report with copies of acknowledged documents thereto attached. Under this procedure and requirement of the Notarial Law, failure to submit such notarial report and copies of acknowledged documents has dire consequences including the possible revocation of the notarys notarial commission. HTML

The fact that the notary public who notarized petitioner Tala Realtys alleged eleven (11)-year lease contract did not retain a copy thereof for submission to the Office of the Clerk of Court of the proper RTC militates against the use of said document as a basis to uphold petitioners claim. The said alleged eleven (11)-year lease contract was not submitted to the Central Bank whose strict documentation rules must be complied with by banks to ensure their continued good standing. On the contrary, what was submitted to the Central Bank was the twenty (20)-year lease contract.

Granting arguendo that private respondent Banco Filipino deliberately omitted to submit the eleven (11)-year contract to the Central Bank, we do not consider that fact as violative of the res inter alios acta aliis non nocet (Section 28, Rule 130, Revised Rules of Court provides, viz.: "Sec. 28. Admission by third party The rights of a party cannot be prejudiced by an act, declaration or omission of another, except as hereinafter provided."; Compania General de Tabacos v. Ganson, 13 Phil. 472, 477[1909]) rule in evidence. Rather, it is an indication of said contracts inexistence.

It is not the eleven (11)-year lease contract but the twenty (20)-year lease contract which is the real and genuine contract between petitioner Tala Realty and private respondent Banco Filipino. Considering that the twenty (20)-year lease contract is still subsisting and will expire in 2001 yet, Banco Filipino is entitled to the possession of the subject premises for as long as it pays the agreed rental and does not violate the other terms and conditions thereof (Art. 1673, New Civil Code)."

In light of the foregoing recent Decision of this Court, we have no option but to uphold the twenty-year lease contract over the eleven-year contract presented by petitioner. It is the better practice that when a court has laid down a principle of law as applicable to a certain state of facts, it will adhere to that principle and apply it to all future cases where the facts are substantially the same. "Stare decisis et non quieta movere."[9] katarungan

That the principle of stare decisis applies in the instant case, even though the subject property is different, may be gleaned from the pronouncement in Negros Navigation Co., Inc. vs. Court of Appeals,[10] to wit

"Petitioner criticizes the lower courts reliance on the Mecenas case, arguing that although this case arose out of the same incident as that involved in Mecenas, the parties are different and trial was conducted separately. Petitioner contends that the decision in this case should be based on the allegations and defenses pleaded and evidence adduced in it or, in short, on the record of this case.

The contention is without merit. What petitioner contends may be true with respect to the merits of the individual claims against petitioner but not as to the cause of the sinking of its ship on April 22, 1980 and its liability for such accident, of which there is only one truth. Otherwise, one would be subscribing to the sophistry: truth on one side of the Pyrenees, falsehood on the other!

Adherence to the Mecenas case is dictated by this Courts policy of maintaining stability in jurisprudence in accordance with the legal maxim "stare decisis et non quieta movere" (Follow past precedents and do not disturb what has been settled.) Where, as in this case, the same questions relating to the same event have been put forward by parties similarly situated as in a previous case litigated and decided by a competent court, the rule of stare decisis is a bar to any attempt to relitigate the same issue (J.M. Tuason & Corp. v. Mariano, 85 SCRA 644 [1978]). In Woulfe v. Associated Realties Corporation (130 N.J. Eq. 519, 23 A. 2d 399, 401 [1942]), the Supreme Court of New Jersey held that where substantially similar cases to the pending case were presented and applicable principles declared in prior decisions, the court was bound by the principle of stare decisis. Similarly, in State ex rel. Tollinger v. Gill (75 Ohio App., 62 N.E. 2d 760 [1944]), it was held that under the doctrine of stare decisis a ruling is final even as to parties who are strangers to the original proceeding and not bound by the judgment under the res judicata doctrine. The Philadelphia court expressed itself in this wise: "Stare decisis simply declares that, for the sake of certainty, a conclusion reached in one case should be applied to those which follow, if the facts are substantially the same, even though the parties may be different" (Heisler v. Thomas Colliery Co., 274 Pa. 448, 452, 118A, 394, 395 [1922]. Manogahela Street Ry, Co. v. Philadelphia Co., 350 Pa. 603, 39 A. 2d 909, 916 [1944]; In re Burtts Estate, 353 Pa. 217, 4 A. 2d 670, 677 [1945]). Thus, in J. M. Tuason v. Mariano, supra, this Court relied on its rulings in other cases involving different parties in sustaining the validity of a land title on the principle of "stare decisis et non quieta movere."

(underscoring, Ours) Kortex

Here, therefore, even if the property subject of the Decision of G.R. No. 129887 is located in Urdaneta, Pangasinan while that in the instant case is located in Davao, we can very well apply the conclusion in G.R. No. 129887 that it is the twenty-year lease contract which is controlling inasmuch as not only are the parties the same, but more importantly, the issue regarding its validity is one and the same and, hence, should no longer be relitigated.

Petitioner is even barred from questioning our adherence to the ruling in G.R. No. 129887 since it categorically declared in its Petition that the same was "likewise filed so that any favorable ruling in said petitions (referring to G.R. Nos. 129887 and 132051) may be extended or made to apply in the instant case."[11] Petitioner cannot now complain that the ruling in G.R. No. 129887 regarding the validity of the twenty-year lease contract is not binding in this case simply because the same is unfavorable to it.

Coming now to the issue of whether or not respondent should be ejected for non-payment of rentals, we do not agree with the ruling in G.R. No. 129887 that since the unpaid rentals demanded by petitioner were based on a new rate which it unilaterally imposed and to which respondent did not agree, there lies no ground for ejectment. In such a case, there could still be ground for ejectment based on non-payment of rentals. The recent case of T & C Development Corporation vs. Court of Appeals[12] is instructional on this point. It was there cautioned that --

"The trial court found that private respondent had failed to pay the monthly rental of P1,800.00 from November 1992 to February 16, 1993, despite demands to pay and to vacate the premises made by petitioner. Even if private respondent deposited the rents in arrears in the bank, this fact cannot alter the legal situation of private respondent since the account was opened in private respondents name. Clearly, there was cause for the ejectment of private respondent. Although the increase in monthly rentals from P700.00 to P1,800.00 was in excess of 20% allowed by B.P. Blg. 877, as amended by R.A. No. 6828, what private respondent could have done was to deposit the original rent of P700.00 either with the judicial authorities or in a bank in the name of, and with notice to, petitioner. As this Court held in Uy v. Court of Appeals (178 SCRA 671, 676 [1989]): Sclaw

The records reveal that the new rentals demanded since 1979 (P150.00 per month) exceed that allowed by law so refusal on the part of the lessor to accept was justified. However, what the lessee should have done was to deposit in 1979 the previous rent. This deposit in the Bank was made only in 1984 indicating a delay of more than four years.

From the foregoing facts, it is clear that the lessor was correct in asking for the ejectment of the delinquent lessee. Moreover, he should be granted not only the current rentals but also all the rentals in arrears. This is so even if the lessor himself did not appeal because as ruled by this Court, there have been instances when substantial justice demands the giving of the proper reliefs." (Underscoring, ours)

While advance rentals appear to have been made to be applied for the payment of rentals due from the eleventh year to the twentieth year of the lease, to wit

"3. That upon the signing and execution of this Contract, the LESSEE shall pay the LESSOR ONE MILLION TWENTY THOUSAND PESOS ONLY (P1,020,000.00) Philippine Currency representing advance rental to be applied on the monthly rental for the period from the eleventh to the twentieth year",[13]

the records show that such advance rental had already been applied for rent on the property for the period of August, 1985 to November, 1989.[14]

Thus, when respondent stopped paying any rent at all beginning April, 1994, it gave petitioner good ground for instituting ejectment proceedings.[15] We reiterate the ruling in T & C Development Corporation, supra, that if ever petitioner took exception to the unilateral or illegal increase in rental rate, it should not have completely stopped paying rent but should have deposited the original rent amount with the judicial authorities or in a bank in the name of, and with notice to, petitioner. This circumstance, i.e., respondents failure to pay the rent at the old rate, does not appear in G.R. No. 129887. Thus, while we are bound by the findings of this Courts Second Division in that case under the principle of stare decisis, the fact that respondents failure to pay any rentals beginning April 1994, which provided ground for its ejectment from the premises, justifies our departure from the outcome of G.R. No. 129887. In this case, we uphold petitioners right to eject respondent from the leased premises. Xlaw

WHEREFORE, for the reasons aforestated, the instant Petition is GRANTED. The Decision in CA-G.R. SP No. 48667 is SET ASIDE insofar as it denies the prayer for ejectment of petitioner.

Judgment is rendered ordering respondent to vacate the subject premises and to restore possession thereof to petitioner. Respondent is also ordered to pay rent in the amount of P20,500.00 per month computed from April, 1994 until such time as it vacates the subject property, with interest thereon at the legal rate.

No pronouncement as to costs.

SO ORDERED.

Davide, Jr., C.J., (Chairman), Puno, Kapunan, and Pardo, JJ., concur. Sclex

Tala Realty v Banco Pilipinas 6.20.00disagreement between parties on which lease contract should prevail

RULING: It is the policy of the court to maintain judicial stability in accordance to stare decisis. The case involves the same questions relating to similarly situated conditions which the court already litigated abd decided upon and the rule on stare decisis is a bar to attempt to relitigate the same issue (stare decisis et non quieta movere follow past precedents and do not disturb what has already been settled.) Stare decisis should apply if the facts are substantially the same even if the parties may be different.

G.R. No. 47616-September 16, 1947JOSE TAN CHONG, petitioner-appellee,vs.THE SECRETARY OF LABOR, respondent-appellant.

x---------------------------------------------------------x

G.R. No. 47623 September 16, 1947LAM SWEE SANG, petitioner-appellee,vs.THE COMMONWEALTH OF THE PHILIPPINES, oppositor-appellant.

First Assistance Solicitor General Jose B. L. Reyes and Solicitor Lucas Lacson for appellants.Antonio V. Raquiza for appellee.

PADILLA, J.:

On 15 October 1941, a decision was promulgated in thecase of Tan Chong vs. Secretary of Labor, G.R. No. 47616,whereby this Court affirmed the judgment of the Court of First Instance of Manila, which hAd granted the writ of habeas corpus applied for by tan Chong, on the ground that he, being a native of the Philippines, of a Chinese father and a Filipino mother, is a citizen of the Philippines.

On the same date, in the case of Lam Swee Sang vs. Commonwealth of the Philippines (G.R. No. 47623), this Court rendered a decision dismissing the petition of the applicant for naturalization filed in the Court of First Instance of Zamboanga, on the ground that the applicant, having been born in Sulu, Philippines, of a Chinese father and Filipino mother, is a citizen of the Philippines. The dismissal of the petition implies and means that there was no need of naturalization for the applicant who is aFilipino citizen.

On 21 October 1941, a motion for reconsideration was filed in both cases by the Solicitor General. The latter contends that even if the petitioner in the first case and the applicant in the second were born in the Philippines, of a Chines father and a Filipino mother, lawfully married, still they are not citizens of the Philippines under and pursuant to the laws in force at the time of their birth, and prays that both decisions be set aside and the judgments appealed from be reversed. This motion for reconsideration was pending in this Court when the Pacific was broke out. During the battle for liberation, the records of both cases were destroyed. Upon petition of the Assistant Solicitor General, Mr. Roberto A. Gianzon, therecords were reconstituted in accordance with the provisionsof Act. No. 3110. The record of the first case, G.R. No. 47616,was declared reconstituted on 5 June, and of the second case, G.R. No. 47623, on 28 June 1946. Upon these reconstituted records, we now proceed to dispose of the motion for reconsideration.

In a long line of decisions, this Court has held that the principle of jus soli applies in this jurisdiction. It is embodied in the Fourteenth Amendment to the Constitution of the United States which provides that "All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the state wherein they reside." In the case of U.S. vs. Wong Kim Ark, 169 U.S., 649, the SupremeCourt of the United States applying the principle of jus soli held that a person born in the United States of Chinese parents domiciled therein is a citizen of the United States. It further held that the Fourteenth Amendment was declaratory of the common law as existed in England and in the United States before and after the Declaration of independence. From that decision, Mr. Chief Justice Fuller, with whom concurred Mr. Justice Harlan, dissented. The principle of jus soli was the rule in this jurisdiction until the 30th of September, 1939, when in the case of Chua vs. Secretary of Labor (68 Phil., 649), this Court abandoned it and held that a person of Chinese parentage born in the Philippines in 1941 is not a citizen thereof, because she followed the citizenship of her Chinese parents and she is not a citizen of the Philippines under the provisions of section 2 of the Jones Law, the Act of Congress of 29 August 1916. But in the cases of Torres and Gallofin vs. Tan Chim (69 Phil., 518), decided on 3 February 1940 (69 Phil., 518), and Gallofin vs. Ordoez, decided on 27 June 1940 (70 Phil., 287), this Court reverted to the rule of jus soli laid down in the cases prior to the decisionin the case of Chua vs. Secretary of Labor, supra.

The Solicitor General heeding the opinions of the Assitant Secretary of State, Mr. G.S. Messermith, of 15 January 1938; of the Second Assistant Secretary of State, Mr. Alvey A. Adee, dated 12 September 1921, and of the Acting Secretary of State, Mr. Huntington Wilson, of 5April 1912, who held that a person born in the Philippines of alien parentage is not a citizen thereof, because the common law principle of jus soli or the Fourteenth Amendment to the Constitutiton of United States was not extended to the Philippines the same opinions upon which the Solicitor General had relied in the case of Chua vs. The Secretary of Labor, supra, in his contention that the rule applying the principle of jus soli in this jurisdiction should be abandoned urges upon this Court to reconsider its decisions in the cases under consideration.

In the case of Muoz vs. Collector of Customs, 20 Phil.,494, the Court applied the principle of jus soli to a person born in the Philippines of a Chinese father and a Filipino mother, and in so doing it cited the case of U.S. vs. Gosiaco, 12 Phil., 490 where, according to the Court, the principle had been applied. But nowhere in the decision of the last mentioned case was such principle applied, because the only question passed upon was whether a person detained for not having a certificate of registration, as required by Act 702, could be admitted to bail pending determination of his appeal by this Court as to whether he did come within the provisions of said Act.

In the case of Roa vs. Collector of Customs, 23 Phil.,315, this Court passed upon the question as to whether a person born in the Philippines of a Chinese father and a Filipino mother, legally married; is a citizen thereof. In this case this Court took into consideration the provisions of articles 17, 18 and 19 of the Civil Code in viewof the fact that the petitioner was born on 6 July 1889; the second paragraph of Article IX of the Treaty of Paris; section 4 of the Philippine Bill (Act of Congress of 1 July 1902) and the amendatory Act of Congress of 23 March 1912, these being the laws then applicable. Commenting on sec. 4 of the Philippine Bill, as amended, this Court said:

By section 4 the doctrine or principle of citizenship by place of birth which prevails in the United States was extended to the Philippine Islands, but with limitations. In the United States every person, which certain specific exceptions, born in the United States is a citizen of that country. Under section 4 every person born after the 11th of April, 1889, of parents who were Spanish subjects on that date and who continued to reside in this country are at themoment of their birth ipso facto citizens of the Philippine Islands. From the reading of section 4 and taking into consideration the Act of March 23, 1912, it is clear that Congress realized that there were inhabitants in the Philippine Islands who did not come within the provisions of said section, and also that Congress did not then by express legislation determine the political status of such persons. Therefore, the inquiry is Did Congress intend to say that all of the inhabitants who were not included in section 4 are to be "deemedand held to be" aliens to the Philippine islands? (Pp. 333-334.) (Emphasis supplied.)

In answering the question in the negative, this Court cited the case of an unmarried woman, a native of Porto Rico, 20 years of age, who arrived in New York by steamer from Porto Rico on 24 August 1902. She was detained at the Immigrant station, examined by a board of special inquiry, and excluded. The writ for habeas corpus having been denied by the Circuit Court, for the reason that she might become a public charge, she appealed to the Supreme Court of the United States which held that she was not an alien to the United States. But the decision of the Supreme Court of the United States in the case cited does not answer negatively the question asked by this Court, because it does not appear that she is of alien parentage and it appears that she was a resident of Porto Rico on11 April 1899. (192 U.S. 1.) Further commenting on section 4, this Court said:

This section declares that a certain class of inhabitants shall be citizens of the Philippine Islands. It does not declare that other inhabitants shall not be citizens. Neither does it declare that other inhabitants shall be deemed to be aliens to the Philippine Islands, and especially it does not declare that aperson situated as in the appellant shall not be nor shall not elect to be a citizen of the country on his birth. The appellant could, as we have said, elect to become a citizen of the United States had he been born in that country under the same circumstances which now surround him. All the laws and the rulings of the courts on the subject so declare, and this has been the declared policy of the United States. While it has been decided that the Constitution and acts of Congress do not apply ex proprio vigore to this country, but that they must be expressly entended by Congress, nevertheless, some of the basic principles upon which the government of the United States rests and the greater part of the Bill of Rights, which protects the citizens of that country, have been extended to the Philippine Islands by the instructions of the President to the first Philippine Commission and the Philippine Bill. (P. 339-340.)

The declaration that a certain class of inhabitants shall be citizens of the Philippines is tantamount or equivalent to declaring that those who do not belong to that class shall not be. Realizing the weakness of the position taken, in view of the express provisions of section 4 of the Philippine Bill, as amended, and of the fact that the Constitution of the United States and Acts of Congress do not apply ex proprio vigore to the Philippines, the Court hastened to add another ground in support of the pronouncement that petitioner Roa is a Filipino citizen, and for that reason entitled to land and reside in the Philippines. The additional ground is that the petitioner's father having died in China in 1900, his mother reacquired her Filipino citizenship which he being under age followed upon the death of his father. The concluding pronouncement in the decisionof the case is, as follows:

The nationality of the appellant having followed that of his mother, he was therefore a citizen of the Philippine Islands on July 1, 1902, and never having expatriated himself, he still remains a citizen of this country.

If all the native inhabitants residing in the Philippines on the 11th day of April 1899, regardless of their alien parentage, are citizens thereof, the amendatory Act of Congress of 23 March 1912 empowering the Philippine Legislature to provide by legislation for the acquisition of Filipino citizenship by those natives excluded from such citizenship by the original section 4 of the Philippine Bill, would be meaningless.

We are not unmindful of the importance of the question submitted to us for decision. We know that the decision upon the motion for reconsideration in these cases is momentous. We have given the time and the thought demanded by its importance. While birth is an important element of citizenship, it alone does not make a person a citizen of the country of his birth. Youth spent in the country; intimate and endearing association with the citizens among whom he lives; knowledge and pride of the country's past; belief in the greatness and security of its institutions, in the loftiness of its ideals, and in the ability of the country's government to protect him, his children, and his earthly possessions against perils from within and from without; and his readiness to defend the country against such perils, are some of the important elements that would make a person living in a country its citizen. Citizenship is a political status. The citizen must be proud of his citizenship. He should treasure and cherish it. In the language of Mr. Chief Justice Fuller, "the question of citizenship in a nation is of the most vital importance. It is a precious heritage, as well as an inestimable acquisition." (U.S. vs. Wong Kim Ark, supra.) Citizenship, the main integrate element of which is allegiance, must not be taken lightly. Dual allegiance must be discouraged and prevented. But the application of the principle of jus soli to persons born in this country of alien parentage would encourage dual allegiance which in the long run would be detrimental to both countries of which such persons might claim to be citizens.

The pinciple of stare decisis does not mean blind adherence to precedents. The doctrines or rule laid down, which has been followed for years, no matter how sound it may be, if found to be contrary to law, must be abandoned. The principleof stare decisis does not and should not apply when there is conflict between the precedent and the law. The duty of this Court is to forsake and abandon any doctrine or rule found to be in violation of the law in force.

It appears that the petitioner in the first case was born in San Pablo, Laguna, in July 1915, of a Chinese father and a Filipino mother, lawfully married, left for China in 1925, and returned to the Philippines on 25 January1940. The applicant in the second case was born in Jolo, Sulu, on 8 May 1900, of a Chinese father and a Filipino mother. It does not appear whether they were legally married, so in the absence of proof to the contrary they are presumed to be lawfully married. From the date of his birth up to 16 November 1938, the date of filing of his application for naturalization, and up to the date of hearing, he had been residing in the Philippines. He is married to a Filipino woman and has three children by her. He speaks the local dialect and the Spanish and English languages.

Considering that the common law principle or rule of jus soli obtaining in England and in the United States, as embodied in the Fourteenth Amendment to the Constitution of the United States, has never been entended to this jurisdiction (section 1, Act of 1 July 1902; sec. 5, Actof 29 August 1916); considering that the law in force and applicable to the petitioner and the applicant in the two cases at the time of their birth is sec. 4 of the Philippine Bill (Act of 1 July 1902), as amended by Act of 23 March 1912, which provides that only those "inhabitants of the Philippine Islands continuing to reside therein who were Spanish subjects on the 11th day of April, 1899, and then resided in said Islands, and their children born subsequent thereto, shall be deemed and held to be citizens of the Philippine Islands," we are of the opinion and so hold that the petitioner in the first case and the applicant in the second case, who were born of alien parentage, were not and are not, under saidsection, citizens of the Philippine Islands.

Needless to say, this decision is not intended or designed to deprive, as it cannot divest, of their Filipino citizenship, those who had been declared to be Filipino citizens, or upon whom such citizenship had been conferred, by the courts because of the doctrine or principle of res adjudicata.

Accordingly, the decision of this Court in the first case confirming the lower court's judgment is set aside; the judgment of the Court of First Instance of Manila appealed from is reversed; the petitioner is recommitted to the custody of the Commissioner of Immigration to be dealt with in accordance with law; and the decision of this Court in the second case is set aside; the decree of theCourt of First Instance of Zamboanga appealed from granting the applicant's peition for naturalization filed on16 November 1938 is affirmed, for the applicant comes under section 1 (a), Act 2927, as amended by Act 3448, and possesses the qualifications required by setion 3 of the same Act, as amended, which was the law in force at the time of the filing of the petition for naturalization. No costs shall be taxed in both cases.

Moran, C. J., Paras, Feria, Pablo, Perfecto, Bengzon, Briones, and Hontiveros, JJ., concur.

Separate Opinions

HILADO, J., concurring:

I concur in the entire majority opinion. I concur inthe revocation of the doctrine of jus soli enunciated, among other cases, in Roa vs. Insular Collector of Customs, 23 Phil., 315. Besides, the ruling in that case can not be invoked in favor of the petitioner in G.R. No. 47616 nor of the applicant in G.R. No. 47623 for the reason that, while Tranquilino Roa in that case was born in the Philippines in theyear 1889, when articles 17 et seq. of the Civil Code were yet in force here and made him a Spanish subject, the said petitioner and applicant in the instant cases were born, although also in the Philippines, 1915 and 1900, respectively, i. e., after the abrogation of said articles, due to their political character, upon the changeof sovereignty following the treaty of Paris ending theSpanish-American war (Roa vs. Insular Collector of Customs, 23 Phil., 315, 330; Halleck's International Law, Chapter 34, par. 14; American and Ocean Insurance Companies vs. 356 Bales of Cotton, 1 Pet. [26 U.S.], 511 542, 7 Law.ed., 242). As declared in the majority opinion, the citizenship of said petitioner and applicant should be determined as of the dates of their respective births.

At the time the petitioner in G.R. No. 47616 was born (1915) the law on Philippine citizenship was contained in the Philippine Bill, section 4, as amended by the Act of Congress of March 23, 1912. Under this provision said petitioner could not be a Filipino citizen upon the date of his birth because his father, who was legally married to his mother, was a Chinese citizen and not a subject of Spain. If his father had been a subject of Spain on April 11, 1899, like his mother, who was a native Filipina, before their marriage and in that case, after said marriage, she would have acquired the citizenship of her husband even if she had been a foreigner then under section 4 of thePhilippine Bill, as amended, said parents of said petitioner would have become citizens of the Philippines unless they should have elected to preserve their allegiance to Spain in the manner and within the period therein prescribed; and then, too, the petitioner upon being born in 1915 would automatically have acquired Philippine citizenship. But such was not the case.

The applicant in G.R. No. 47623 could not possibly be a Filipino citizen upon his birth (1900) because, aside from the fact that his father, who is presumed to have been legally married to his mother, was a Chinese subject, there was no law on Philippine citizenship at that time, because, firstly, even the aforecited articles of the Civil Code had previously been abrogated, as already stated by the change of sovereignty in the Philippines following the Spanish-American war, secondly, said articles at any rate did not regulate Philippine citizenship nor did they make said applicant's father a Spanish subject, and, thirdly, the Philippine Bill was not enacted until July 1, 1902.

In the case of the applicant in G.R. No. 47623, his father was a Chinese subject on April 11, 1899. And his mother, upon her marriage with her Chinese husband, acquired his nationality. So that when said applicant was born in 1900 his parents were Chinese subjects. When the Philippine Bill was enacted on July 1, 1902, therefore, said applicant and his parents were not subjects of Spain and consequently could not have acquired Philippine citizenship by virtue of section 4 thereof. It was only after the Philippine Naturalization Law was enacted, pursuant to the Act of Congress of August 29, 1916 (Jones Law), that the said applicant had his first opportunity to become a naturalized citizen of this country.

Consequently, I reach the same conclusion as the majority.

Case Digest on JOSE TAN CHONG VS. SECRETARY OF LABOR GR 47616 SEPTEMBER 16, 1947LAM SWEE SANG VS. THE COMMONWEALTH OF THE PHILS.GR 47623 SEPTEMBER 16, 1947FACTS:Petitioners in the two cases are both of born of a Chinese fatherand a Filipino mother. The first petitioner was granted writ of habeascorpus since he was declared to be a Filipino citizen due to the doctrineof jus soli, which says that when one is born in a country, he acquiresthe citizenship of that country. Such has been said to be the samewith the second petitioner. Second petitioners petition fornaturalization was dismissed since he no longer needed to benaturalized. The Solicitor General opposed such decision, saying thatthe two are not citizens of the Philippines pursuant to the laws existingduring their time of birth.Before this, the Court, with regard to cases like this, used theprinciple of jus soli, adopted from the US Constitution, which says thatall those born and naturalized in the US and placed under its jurisdiction is a citizen of the US.The Solicitor General mentioned that the principle of jus soliwasnt extended to the Philippines. In a previous case wherein jus soliwas used was based in a prior case, which mentioned the principle of jus soli but wasnt actually the issue at hand. Furthermore, if ever theprinciple of jus soli was extended, it had its limitations. The law thatprevailed then mentioned that if one was born after a certain date andin accordance with other conditions, which would only be the timewhen one is considered a citizen. Otherwise, they are not to beconsidered citizens.

ISSUE:Whether or not precedents regarding citizenship should beupheld, following the principle of stare decisis?

HELD:No, the principle of stare decisis doesnt mean being blindadherence to precedents. Even if the doctrines laid down have beenfollowed for years, if it has been found to be contrary to law, it shouldbe abandoned or reconsidered. Principle of stare decisis shouldnt beapplied if there is conflict between law and precedent.Given that the law enforced during the time of birth of twopetitioners doesnt allow them to be citizens of the Philippines, even if precedence tells that they be allowed to be citizens of the Philippines,cannot be declared Filipino citizens.

Res JudicataRes judicata denotes an important legal doctrine that generally means that once a matter is judicially decided, it is finally decided. The doctrine bars re-litigation of matters that have already been determined in adjudication. Broadly, res judicata bars the reconsideration of settled civil matters. Specifically, res judicata precludes only subsequent suits on the same cause of action between the same parties after a final judgment on the merits.

Res judicata can also mean the judged matter itself. In other words, a matter that is final such as a claim or cause of action that is settled or a judgment, award, or other determination that is considered final and bars re-litigation of the same matter.

The defendant initially responded with a motion to dismiss on res judicata grounds.

AGILENT TECHNOLOGIES SINGAPORE (PTE) LTD., petitioner, vs. INTEGRATED SILICON TECHNOLOGY PHILIPPINES CORPORATION, TEOH KIANG HONG, TEOH KIANG SENG, ANTHONY CHOO, JOANNE KATE M. DELA CRUZ, JEAN KAY M. DELA CRUZ and ROLANDO T. NACILLA, respondents.D E C I S I O NYNARES-SANTIAGO, J.:

This petition for review assails the Decision dated August 12, 2002 of the Court of Appeals in CA-G.R. SP No. 66574, which dismissed Civil Case No. 3123-2001-C and annulled and set aside the Order dated September 4, 2001 issued by the Regional Trial Court of Calamba, Laguna, Branch 92.

Petitioner Agilent Technologies Singapore (Pte.), Ltd. (Agilent) is a foreign corporation, which, by its own admission, is not licensed to do business in the Philippines.[1] Respondent Integrated Silicon Technology Philippines Corporation (Integrated Silicon) is a private domestic corporation, 100% foreign owned, which is engaged in the business of manufacturing and assembling electronics components.[2] Respondents Teoh Kiang Hong, Teoh Kiang Seng and Anthony Choo, Malaysian nationals, are current members of Integrated Silicons board of directors, while Joanne Kate M. dela Cruz, Jean Kay M. dela Cruz, and Rolando T. Nacilla are its former members.[3]

The juridical relation among the various parties in this case can be traced to a 5-year Value Added Assembly Services Agreement (VAASA), entered into on April 2, 1996 between Integrated Silicon and the Hewlett-Packard Singapore (Pte.) Ltd., Singapore Components Operation (HP-Singapore).[4] Under the terms of the VAASA, Integrated Silicon was to locally manufacture and assemble fiber optics for export to HP-Singapore. HP-Singapore, for its part, was to consign raw materials to Integrated Silicon; transport machinery to the plant of Integrated Silicon; and pay Integrated Silicon the purchase price of the finished products.[5] The VAASA had a five-year term, beginning on April 2, 1996, with a provision for annual renewal by mutual written consent.[6] On September 19, 1999, with the consent of Integrated Silicon,[7] HP-Singapore assigned all its rights and obligations in the VAASA to Agilent.[8]

On May 25, 2001, Integrated Silicon filed a complaint for Specific Performance and Damages against Agilent and its officers Tan Bian Ee, Lim Chin Hong, Tey Boon Teck and Francis Khor, docketed as Civil Case No. 3110-01-C. It alleged that Agilent breached the parties oral agreement to extend the VAASA. Integrated Silicon thus prayed that defendant be ordered to execute a written extension of the VAASA for a period of five years as earlier assured and promised; to comply with the extended VAASA; and to pay actual, moral, exemplary damages and attorneys fees.[9]

On June 1, 2001, summons and a copy of the complaint were served on Atty. Ramon Quisumbing, who returned these processes on the claim that he was not the registered agent of Agilent. Later, he entered a special appearance to assail the courts jurisdiction over the person of Agilent.

On July 2, 2001, Agilent filed a separate complaint against Integrated Silicon, Teoh Kang Seng, Teoh Kiang Gong, Anthony Choo, Joanne Kate M. dela Cruz, Jean Kay M. dela Cruz and Rolando T. Nacilla,[10] for Specific Performance, Recovery of Possession, and Sum of Money with Replevin, Preliminary Mandatory Injunction, and Damages, before the Regional Trial Court, Calamba, Laguna, Branch 92, docketed as Civil Case No. 3123-2001-C. Agilent prayed that a writ of replevin or, in the alternative, a writ of preliminary mandatory injunction, be issued ordering defendants to immediately return and deliver to plaintiff its equipment, machineries and the materials to be used for fiber-optic components which were left in the plant of Integrated Silicon. It further prayed that defendants be ordered to pay actual and exemplary damages and attorneys fees.[11]

Respondents filed a Motion to Dismiss in Civil Case No. 3123-2001-C,[12] on the grounds of lack of Agilents legal capacity to sue;[13] litis pendentia;[14] forum shopping;[15] and failure to state a cause of action.[16]

On September 4, 2001, the trial court denied the Motion to Dismiss and granted petitioner Agilents application for a writ of replevin.[17]

Without filing a motion for reconsideration, respondents filed a petition for certiorari with the Court of Appeals.[18]

In the meantime, upon motion filed by respondents, Judge Antonio S. Pozas of Branch 92 voluntarily inhibited himself in Civil Case No. 3123-2001-C. The case was re-raffled and assigned to Branch 35, the same branch where Civil Case No. 3110-2001-C is pending.

On August 12, 2002, the Court of Appeals granted respondents petition for certiorari, set aside the assailed Order of the trial court dated September 4, 2001, and ordered the dismissal of Civil Case No. 3123-2001-C.

Hence, the instant petition raising the following errors:

I.

THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN NOT DISMISSING RESPONDENTS PETITION FOR CERTIORARI FOR RESPONDENTS FAILURE TO FILE A MOTION FOR RECONSIDERATION BEFORE RESORTING TO THE REMEDY OF CERTIORARI.

II.

THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN ANNULLING AND SETTING ASIDE THE TRIAL COURTS ORDER DATED 4 SEPTEMBER 2001 AND ORDERING THE DISMISSAL OF CIVIL CASE NO. 3123-2001-C BELOW ON THE GROUND OF LITIS PENDENTIA, ON ACCOUNT OF THE PENDENCY OF CIVIL CASE NO. 3110-2001-C.

III.

THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN ANNULLING AND SETTING ASIDE THE TRIAL COURTS ORDER DATED 4 SEPTEMBER 2001 AND ORDERING THE DISMISSAL OF CIVIL CASE NO. 3123-2001-C BELOW ON THE GROUND OF FORUM SHOPPING, ON ACCOUNT OF THE PENDENCY OF CIVIL CASE NO. 3110-2001-C.

IV.

THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN ORDERING THE DISMISSAL OF CIVIL CASE NO. 323-2001-C BELOW INSTEAD OF ORDERING IT CONSOLIDATED WITH CIVIL CASE NO. 3110-2001-C.[19]

The two primary issues raised in this petition: (1) whether or not the Court of Appeals committed reversible error in giving due course to respondents petition, notwithstanding the failure to file a Motion for Reconsideration of the September 4, 2001 Order; and (2) whether or not the Court of Appeals committed reversible error in dismissing Civil Case No. 3123-2001-C.

We find merit in the petition.

The Court of Appeals, citing the case of Malayang Manggagawa sa ESSO v. ESSO Standard Eastern, Inc.,[20] held that the lower court had no jurisdiction over Civil Case No. 3123-2001-C because of the pendency of Civil Case No. 3110-2001-C and, therefore, a motion for reconsideration was not necessary before resort to a petition for certiorari. This was error.

Jurisdiction is fixed by law. Batas Pambansa Blg. 129 vests jurisdiction over the subject matter of Civil Case No. 3123-2001-C in the RTC.[21]

The Court of Appeals ruling that the assailed Order issued by the RTC of Calamba, Branch 92, was a nullity for lack of jurisdiction due to litis pendentia and forum shopping, has no legal basis. The pendency of another action does not strip a court of the jurisdiction granted by law.

The Court of Appeals further ruled that a Motion for Reconsideration was not necessary in view of the urgent necessity in this case. We are not convinced. In the case of Bache and Co. (Phils.), Inc. v. Ruiz,[22] relied on by the Court of Appeals, it was held that time is of the essence in view of the tax assessments sought to be enforced by respondent officers of the Bureau of Internal Revenue against petitioner corporation, on account of which immediate and more direct action becomes necessary. Tax assessments in that case were based on documents seized by virtue of an illegal search, and the deprivation of the right to due process tainted the entire proceedings with illegality. Hence, the urgent necessity of preventing the enforcement of the tax assessments was patent. Respondents, on the other hand, cite the case of Geronimo v. Commission on Elections,[23] where the urgent necessity of resolving a disqualification case for a position in local government warranted the expeditious resort to certiorari. In the case at bar, there is no analogously urgent circumstance which would necessitate the relaxation of the rule on a Motion for Reconsideration.

Indeed, none of the exceptions for dispensing with a Motion for Reconsideration is present here. None of the following cases cited by respondents serves as adequate basis for their procedural lapse.

In Vigan Electric Light Co., Inc. v. Public Service Commission,[24] the questioned order was null and void for failure of respondent tribunal to comply with due process requirements; in Matanguihan v. Tengco,[25] the questioned order was a patent nullity for failure to acquire jurisdiction over the defendants, which fact the records plainly disclosed; and in National Electrification Administration v. Court of Appeals,[26] the questioned orders were void for vagueness. No such patent nullity is evident in the Order issued by the trial court in this case. Finally, while urgency may be a ground for dispensing with a Motion for Reconsideration, in the case of Vivo v. Cloribel,[27] cited by respondents, the slow progress of the case would have rendered the issues moot had a motion for reconsideration been availed of. We find no such urgent circumstance in the case at bar.

Respondents, therefore, availed of a premature remedy when they immediately raised the matter to the Court of Appeals on certiorari; and the appellate court committed reversible error when it took cognizance of respondents petition instead of dismissing the same outright.

We come now to the substantive issues of the petition.

Litis pendentia is a Latin term which literally means a pending suit. It is variously referred to in some decisions as lis pendens and auter action pendant. While it is normally connected with the control which the court has on a property involved in a suit during the continuance proceedings, it is more interposed as a ground for the dismissal of a civil action pending in court.

Litis pendentia as a ground for the dismissal of a civil action refers to that situation wherein another action is pending between the same parties for the same cause of action, such that the second action becomes unnecessary and vexatious. For litis pendentia to be invoked, 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 reliefs prayed for, the reliefs 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.[28]

The Court of Appeals correctly appreciated the identity of parties in Civil Cases No. 3123-2001-C and 3110-2001-C. Well-settled is the rule that lis pendens requires only substantial, and not absolute, identity of parties.[29] There is substantial identity of parties when there is a community of interest between a party in the first case and a party in the second case, even if the latter was not impleaded in the first case.[30] The parties in these cases are vying over the interests of the two opposing corporations; the individuals are only incidentally impleaded, being the natural persons purportedly accused of violating these corporations rights.

Likewise, the fact that the positions of the parties are reversed, i.e., the plaintiffs in the first case are the defendants in the second case or vice versa, does not negate the identity of parties for purposes of determining whether the case is dismissible on the ground of litis pendentia.[31]

The identity of parties notwithstanding, litis pendentia does not obtain in this case because of the absence of the second and third requisites. The rights asserted in each of the cases involved are separate and distinct; there are two subjects of controversy presented for adjudication; and two causes of action are clearly involved. The fact that respondents instituted a prior action for Specific Performance and Damages is not a ground for defeating the petitioners action for Specific Performance, Recovery of Possession, and Sum of Money with Replevin, Preliminary Mandatory Injunction, and Damages.

In Civil Case No. 3110-2001-C filed by respondents, the issue is whether or not there was a breach of an oral promise to renew of the VAASA. The issue in Civil Case No. 3123-2001-C, filed by petitioner, is whether petitioner has the right to take possession of the subject properties. Petitioners right of possession is founded on the ownership of the subject goods, which ownership is not disputed and is not contingent on the extension or non-extension of the VAASA. Hence, the replevin suit can validly be tried even while the prior suit is being litigated in the Regional Trial Court.

Possession of the subject properties is not an issue in Civil Case No. 3110-2001-C. The reliefs sought by respondent Integrated Silicon therein are as follows: (1) execution of a written extension or renewal of the VAASA; (2) compliance with the extended VAASA; and (3) payment of overdue accounts, damages, and attorneys fees. The reliefs sought by petitioner Agilent in Civil Case No. 3123-2001-C, on the other hand, are as follows: (1) issuance of a Writ of Replevin or Writ of Preliminary Mandatory Injunction; (2) recovery of possession of the subject properties; (3) damages and attorneys fees.

Concededly, some items or pieces of evidence may be admissible in both actions. It cannot be said, however, that exactly the same evidence will support the decisions in both, since the legally significant and controlling facts in each case are entirely different. Although the VAASA figures prominently in both suits, Civil Case No. 3110-2001-C is premised on a purported breach of an oral obligation to extend the VAASA, and damages arising out of Agilents alleged failure to comply with such purported extension. Civil Case No. 3123-2001-C, on the other hand, is premised on a breach of the VAASA itself, and damages arising to Agilent out of that purported breach.

It necessarily follows that the third requisite for litis pendentia is also absent. The following are the elements of res judicata:

(a) The former judgment must be final;

(b) The court which rendered judgment must have jurisdiction over the parties and the subject matter;

(c) It must be a judgment on the merits; and

(d) There must be between the first and second actions identity of parties, subject matter, and cause of action.[32]

In this case, any judgment rendered in one of the actions will not amount to res judicata in the other action. There being different causes of action, the decision in one case will not constitute res judicata as to the other.

Of course, a decision in one case may, to a certain extent, affect the other case. This, however, is not the test to determine the identity of the causes of action. Whatever difficulties or inconvenience may be entailed if both causes of action are pursued on separate remedies, the proper solution is not the dismissal order of the Court of Appeals. The possible consolidation of said cases, as well as stipulations and appropriate modes of discovery, may well be considered by the court below to subserve not only procedural expedience but, more important, the ends of justice.[33]

We now proceed to the issue of forum shopping.

The test for determining whether a party violated the rule against forum-shopping was laid down in the case of Buan v. Lopez.[34] Forum shopping exists where the elements of litis pendentia are present, or where a final judgment in one case will amount to res judicata in the final other. There being no litis pendentia in this case, a judgment in the said case will not amount to res judicata in Civil Case No. 3110-2001-C, and respondents contention on forum shopping must likewise fail.

We are not unmindful of the afflictive consequences that may be suffered by both petitioner and respondents if replevin is granted by the trial court in Civil Case No. 3123-2001-C. If respondent Integrated Silicon eventually wins Civil Case No. 3110-2001-C, and the VAASAs terms are extended, petitioner corporation will have to comply with its obligations thereunder, which would include the consignment of properties similar to those it may recover by way of replevin in Civil Case No. 3123-2001-C. However, petitioner will also suffer an injustice if denied the remedy of replevin, resort to which is not only allowed but encouraged by law.

Respondents argue that since Agilent is an unlicensed foreign corporation doing business in the Philippines, it lacks the legal capacity to file suit.[35] The assailed acts of petitioner Agilent, purportedly in the nature of doing business in the Philippines, are the following: (1) mere entering into the VAASA, which is a service contract;[36] (2) appointment of a full-time representative in Integrated Silicon, to oversee and supervise the production of Agilents products;[37] (3) the appointment by Agilent of six full-time staff members, who were permanently stationed at Integrated Silicons facilities in order to inspect the finished goods for Agilent;[38] and (4) Agilents participation in the management, supervision and control of Integrated Silicon,[39] including instructing Integrated Silicon to hire more employees to meet Agilents increasing production needs,[40] regularly performing quality audit, evaluation and supervision of Integrated Silicons employees,[41] regularly performing inventory audit of raw materials to be used by Integrated Silicon, which was also required to provide weekly inventory updates to Agilent,[42] and providing and dictating Integrated Silicon on the daily production schedule, volume and models of the products to manufacture and ship for Agilent.[43]

A foreign corporation without a license is not ipso facto incapacitated from bringing an action in Philippine courts. A license is necessary only if a foreign corporation is transacting or doing business in the country. The Corporation Code provides:

Sec. 133. Doing business without a license. No foreign corporation transacting business in the Philippines without a license, or its successors or assigns, shall be permitted to maintain or intervene in any action, suit or proceeding in any court or administrative agency of the Philippines; but such corporation may be sued or proceeded against before Philippine courts or administrative tribunals on any valid cause of action recognized under Philippine laws.

The aforementioned provision prevents an unlicensed foreign corporation doing business in the Philippines from accessing our courts.

In a number of cases, however, we have held that an unlicensed foreign corporation doing business in the Philippines may bring suit in Philippine courts against a Philippine citizen or entity who had contracted with and benefited from said corporation.[44] Such a suit is premised on the doctrine of estoppel. A party is estopped from challenging the personality of a corporation after having acknowledged the same by entering into a contract with it. This doctrine of estoppel to deny corporate existence and capacity applies to foreign as well as domestic corporations.[45] The application of this principle prevents a person contracting with a foreign corporation from later taking advantage of its noncompliance with the statutes chiefly in cases where such person has received the benefits of the contract.[46]

The principles regarding the right of a foreign corporation to bring suit in Philippine courts may thus be condensed in four statements: (1) if a foreign corporation does business in the Philippines without a license, it cannot sue before the Philippine courts;[47] (2) if a foreign corporation is not doing business in the Philippines, it needs no license to sue before Philippine courts on an isolated transaction or on a cause of action entirely independent of any business transaction[48]; (3) if a foreign corporation does business in the Philippines without a license, a Philippine citizen or entity which has contracted with said corporation may be estopped from challenging the foreign corporations corporate personality in a suit brought before Philippine courts;[49] and (4) if a foreign corporation does business in the Philippines with the required license, it can sue before Philippine courts on any transaction.

The challenge to Agilents legal capacity to file suit hinges on whether or not it is doing business in the Philippines. However, there is no definitive rule on what constitutes doing, engaging in, or transacting business in the Philippines, as this Court observed in the case of Mentholatum v. Mangaliman.[50] The Corporation Code itself is silent as to what acts constitute doing or transacting business in the Philippines.

Jurisprudence has it, however, that the term implies a continuity of commercial dealings and arrangements, and contemplates, to that extent, the performance of acts or works or the exercise of some of the functions normally incident to or in progressive prosecution of the purpose and subject of its organization.[51]

In Mentholatum,[52] this Court discoursed on the two general tests to determine whether or not a foreign corporation can be considered as doing business in the Philippines. The first of these is the substance test, thus:[53]

The true test [for doing business], however, seems to be whether the foreign corporation is continuing the body of the business or enterprise for which it was organized or whether it has substantially retired from it and turned it over to another.

The second test is the continuity test, expressed thus:[54]

The term [doing business] implies a continuity of commercial dealings and arrangements, and contemplates, to that extent, the performance of acts or works or the exercise of some of the functions normally incident to, and in the progressive prosecution of, the purpose and object of its organization.

Although each case must be judged in light of its attendant circumstances, jurisprudence has evolved several guiding principles for the application of these tests. For instance, considering that it transacted with its Philippine counterpart for seven years, engaging in futures contracts, this Court concluded that the foreign corporation in Merrill Lynch Futures, Inc. v. Court of Appeals and Spouses Lara,[55] was doing business in the Philippines. In Commissioner of Internal Revenue v. Japan Airlines (JAL),[56] the Court held that JAL was doing business in the Philippines, i.e., its commercial dealings in the country were continuous despite the fact that no JAL aircraft landed in the country as it sold tickets in the Philippines through a general sales agent, and opened a promotions office here as well.

In General Corp. of the Phils. v. Union Insurance Society of Canton and Firemans Fund Insurance,[57] a foreign insurance corporation was held to be doing business in the Philippines, as it appointed a settling agent here, and issued 12 marine insurance policies. We held that these transactions were not isolated or casual, but manifested the continuity of the foreign corporations conduct and its intent to establish a continuous business in the country. In Eriks PTE Ltd. v. Court of Appeals and Enriquez,[58] the foreign corporation sold its products to a Filipino buyer who ordered the goods 16 times within an eight-month period. Accordingly, this Court ruled that the corporation was doing business in the Philippines, as there was a clear intention on its part to continue the body of its business here, despite the relatively short span of time involved. Communication Materials and Design, Inc., et al. v. Court of Appeals, ITEC, et al.[59] and Top-Weld Manufacturing v. ECED, IRTI, et al.[60] both involved the License and Technical Agreement and Distributor Agreement of foreign corporations with their respective local counterparts that were the primary bases for the Courts ruling that the foreign corporations were doing business in the Philippines.[61] In particular, the Court cited the highly restrictive nature of certain provisions in the agreements involved, such that, as stated in Communication Materials, the Philippine entity is reduced to a mere extension or instrument of the foreign corporation. For example, in Communication Materials, the Court deemed the No Competing Product provision of the Representative Agreement therein restrictive.[62]

The case law definition has evolved into a statutory definition, having been adopted with some qualifications in various pieces of legislation. The Foreign Investments Act of 1991 (the FIA; Republic Act No. 7042, as amended), defines doing business as follows:

Sec. 3, par. (d). The phrase doing business shall include soliciting orders, service contracts, opening offices, whether called liaison offices or branches; appointing representatives or distributors domiciled in the Philippines or who in any calendar year stay in the country for a period or periods totaling one hundred eighty (180) days or more; participating in the management, supervision or control of any domestic business, firm, entity, or corporation in the Philippines; and any other act or acts that imply a continuity of commercial dealings or arrangements, and contemplate to that extent the performance of acts or works, or the exercise of some of the functions normally incident to, and in the progressive prosecution of, commercial gain or of the purpose and object of the business organization.

An analysis of the relevant case law, in conjunction with Section 1 of the Implementing Rules and Regulations of the FIA (as amended by Republic Act No. 8179), would demonstrate that the acts enumerated in the VAASA do not constitute doing business in the Philippines.

Section 1 of the Implementing Rules and Regulations of the FIA (as amended by Republic Act No. 8179) provides that the following shall not be deemed doing business:

(1) Mere investment as a shareholder by a foreign entity in domestic corporations duly registered to do business, and/or the exercise of rights as such investor;

(2) Having a nominee director or officer to represent its interest in such corporation;

(3) Appointing a representative or distributor domiciled in the Philippines which transacts business in the representatives or distributors own name and account;

(4) The publication of a general advertisement through any print or broadcast media;

(5) Maintaining a stock of goods in the Philippines solely for the purpose of having the same processed by another entity in the Philippines;

(6) Consignment by a foreign entity of equipment with a local company to be used in the processing of products for export;

(7) Collecting information in the Philippines; and

(8) Performing services auxiliary to an existing isolated contract of sale which are not on a continuing basis, such as installing in the Philippines machinery it has manufactured or exported to the Philippines, servicing the same, training domestic workers to operate it, and similar incidental services.

By and large, to constitute doing business, the activity to be undertaken in the Philippines is one that is for profit-making.[63]

By the clear terms of the VAASA, Agilents activities in the Philippines were confined to (1) maintaining a stock of goods in the Philippines solely for the purpose of having the same processed by Integrated Silicon; and (2) consignment of equipment with Integrated Silicon to be used in the processing of products for export. As such, we hold that, based on the evidence presented thus far, Agilent cannot be deemed to be doing business in the Philippines. Respondents contention that Agilent lacks the legal capacity to file suit is therefore devoid of merit. As a foreign corporation not doing business in the Philippines, it needed no license before it can sue before our courts.

Finally, as to Agilents purported failure to state a cause of action against the individual respondents, we likewise rule in favor of petitioner. A Motion to Dismiss hypothetically admits all the allegations in the Complaint, which plainly alleges that these individual respondents had committed or permitted the commission of acts prejudicial to Agilent. Whether or not these individuals had divested themselves of their interests in Integrated Silicon, or are no longer members of Integrated Silicons Board of Directors, is a matter of defense best threshed out during trial.

WHEREFORE, PREMISES CONSIDERED, the petition is GRANTED. The Decision of the Court of Appeals in CA-G.R. SP No. 66574 dated August 12, 2002, which dismissed Civil Case No. 3123-2001-C, is REVERSED and SET ASIDE. The Order dated September 4, 2001 issued by the Regional Trial Court of Calamba, Laguna, Branch 92, in Civil Case No. 3123-2001-C, is REINSTATED. Agilents application for a Writ of Replevin is GRANTED.

No pronouncement as to costs.

SO ORDERED.Davide, Jr., C.J., (Chairman), Panganiban, Carpio, and Azcuna, JJ., concur.

Case Digest Agilent Technologies Singapore vs. Integrated Silicon Techngology Philippines Corp.[GR 154618, 14 April 2004]

Facts: Agilent Technologies Singapore (Pte.), Ltd. is a foreign corporation, which, by its own admission, is not licensed to do business in the Philippines. Integrated Silicon Technology Philippines Corporation is a private domestic corporation, 100% foreign owned, which is engaged in the business of manufacturing and assembling electronics components. Teoh Kiang Hong, Teoh Kiang Seng and Anthony Choo, Malaysian nationals, are current members of Integrated Silicons board of directors, while Joanne Kate M. dela Cruz, Jean Kay M. dela Cruz, and Rolando T. Nacilla are its former members. The juridical relation among the various parties in the case can be traced to a 5-year Value Added Assembly Services Agreement (VAASA), entered into on 2 April 1996 between Integrated Silicon and the Hewlett-Packard Singapore (Pte.) Ltd., Singapore Components Operation (HP-Singapore). Under the terms of the VAASA, Integrated Silicon was to locally manufacture and assemble fiber optics for export to HP-Singapore.

HP-Singapore, for its part, was to consign raw materials to Integrated Silicon; transport machinery to the plant of Integrated Silicon; and pay Integrated Silicon the purchase price of the finished products. The VAASA had a five-year term, beginning on 2 April 1996, with a provision for annual renewal by mutual written consent. On 19 September 1999, with the consent of Integrated Silicon, HP-Singapore assigned all its rights and obligations in the VAASA to Agilent. On 25 May 2001, Integrated Silicon filed a complaint for Specific Performance and Damages against Agilent and its officers Tan Bian Ee, Lim Chin Hong, Tey Boon Teck and Francis Khor (Civil Case 3110-01-C), alleging that Agilent breached the parties oral agreement to extend the VAASA. Integrated Silicon thus prayed that Agilent be ordered to execute a written extension of the VAASA for a period of