HEIRS OF MAGDALENO YPON VS.

RICAFORTE

FACTS:

On July 29, 2010, heirs of Magdaleno Ypon, together with some of their cousins, filed a complaint for Cancellation of Title and
Reconveyance with Damages against Gaudioso Ricaforte, alleging that Magdaleno died intestate and childless, leaving 2 parcels of lots.
Claiming to be the sole heir of Magdaleno, Ricaforte executed an Affidavit of Self-Adjudication and caused the cancellation of title, leading
to their transfer in his name to the prejudice of petitioners who are Magdaleno’s collateral relatives and successors-in-interest.

In his Answer, Gaudioso alleged that he is the lawful son of Magdaleno. Further, by way of affirmative defense, he claimed that: (a)
petitioners have no cause of action against him; (b) the complaint fails to state a cause of action; and (c) the case is not prosecuted by
the real parties-in-interest, as there is no showing that the petitioners have been judicially declared as Magdaleno’s lawful heirs.

The RTC found that the complaint failed to state a cause of action against Gaudioso. It observed that while the plaintiffs therein had
established their relationship with Magdaleno in a previous special proceeding for the issuance of letters of administration, this did not
mean that they could already be considered as the decedent’s compulsory heirs.

ISSUE:
Whether or not the RTC’s dismissal of the case on the ground that the subject complaint failed to state a cause of action was proper.

RULING:

YES! Cause of action is defined as the act or omission by which a party violates a right of another.16 It is well-settled that the existence
of a cause of action is determined by the allegations in the complaint. In this relation, a complaint is said to assert a sufficient cause of
action if, admitting what appears solely on its face to be correct, the plaintiff would be entitled to the relief prayed for.18Accordingly, if the
allegations furnish sufficient basis by which the complaint can be maintained, the same should not be dismissed, regardless of the
defenses that may be averred by the defendants.

As stated in the subject complaint, petitioners, who were among the plaintiffs therein, alleged that they are the lawful heirs of Magdaleno
and based on the same, prayed that the Affidavit of Self-Adjudication executed by Gaudioso be declared null and void and that the
transfer certificates of title issued in the latter’s favor be cancelled. While the foregoing allegations, if admitted to be true, would
consequently warrant the reliefs sought for in the said complaint, the rule that the determination of a decedent’s lawful heirs should be
made in the corresponding special proceeding precludes the RTC, in an ordinary action for cancellation of title and reconveyance, from
granting the same.

In the case of Heirs of Teofilo Gabatan v. CA, the Court, citing several other precedents, held that the determination of who are the
decedent’s lawful heirs must be made in the proper special proceeding for such purpose, and not in an ordinary suit for recovery of
ownership and/or possession.

Jurisprudence dictates that the determination of who are the legal heirs of the deceased must be made in the proper special proceedings
in court, and not in an ordinary suit for recovery of ownership and possession of property. This must take precedence over the action for
recovery of possession and ownership. The Court has consistently ruled that the trial court cannot make a declaration of heirship in the
civil action for the reason that such a declaration can only be made in a special proceeding. Under Section 3, Rule 1 of the 1997 Revised
Rules of Court, a civil action is defined as one by which a party sues another for the enforcement or protection of a right, or the prevention
or redress of a wrong while a special proceeding is a remedy by which a party seeks to establish a status, a right, or a particular fact. It
is then decisively clear that the declaration of heirship can be made only in a special proceeding inasmuch as the petitioners here are
seeking the establishment of a status or right.

In the more recent case of Milagros Joaquino v. Lourdes Reyes, the Court reiterated its ruling that matters relating to the rights of filiation
and heirship must be ventilated in the proper probate court in a special proceeding instituted precisely for the purpose of determining
such rights. Citing the case of Agapay v. Palang, this Court held that the status of an illegitimate child who claimed to be an heir to a
decedent's estate could not be adjudicated in an ordinary civil action which, as in this case, was for the recovery of property.22 (Emphasis
and underscoring supplied; citations omitted)

By way of exception, the need to institute a separate special proceeding for the determination of heirship may be dispensed with for the
sake of practicality, as when the parties in the civil case had voluntarily submitted the issue to the trial court and already presented their
evidence regarding the issue of heirship, and the RTC had consequently rendered judgment thereon, or when a special proceeding had
been instituted but had been finally closed and terminated, and hence, cannot be re-opened.

In this case, none of the foregoing exceptions, or those of similar nature, appear to exist. Hence, there lies the need to institute the proper
special proceeding in order to determine the heirship of the parties involved.

Verily, while a court usually focuses on the complaint in determining whether the same fails to state a cause of action, a court cannot
disregard decisions material to the proper appreciation of the questions before it. Thus, concordant with applicable jurisprudence, since
a determination of heirship cannot be made in an ordinary action for recovery of ownership and/or possession, the dismissal of the case
was also proper. In this light, it must be pointed out that the RTC erred in ruling on Gaudioso’s heirship which should, as herein discussed,
be threshed out and determined in the proper special proceeding. As such, the foregoing pronouncement should therefore be devoid of
any legal effect.
 ZUÑIGA-SANTOS VS. SANTOS-GRAN

FACTS:

On January 9, 2006, Eliza Zuñiga-Santos, through Nympha Z. Sales, filed a Complaint for annulment of sale and revocation of title against
Divina Gracia Santos-Gran and the Register of Deeds-Marikina before the RTC.

Eliza alleged that: (a) she was the registered owner of 3 parcels of land located in Montalban, Rizal, prior to their transfer in the name of
Gran; (b) she has a second husband, Lamberto C. Santos, with whom she did not have any children; (c) she was forced to take care of
Lamberto’s daughter, Gran, whose birth certificate was forged to make it appear that she was Lamberto’s daughter; (d) pursuant to void
and voidable documents (Deed of Sale), Lamberto succeeded in transferring the properties to Gran; (e) despite diligent efforts, said Deed
of Sale could not be located; and (f) she discovered that the subject properties were transferred to Gran sometime in November 2005.

Gran filed a Motion to Dismiss alleging that (a) the action filed by petitioner had prescribed and (b) the Amended Complaint failed to state
a cause of action as the void and voidable documents sought to be nullified were not properly identified nor the substance thereof. RTC
dismissed the case for its failure to state a cause of action and prescription of the action. CA affirmed RTC’s ruling.

ISSUE:
Whether or not the dismissal of Eliza’s Amended Complaint should be sustained.

RULING:

YES! Failure to state a cause of action and lack of cause of action are distinct grounds to dismiss a particular action. The former refers
to the insufficiency of the allegations in the pleading, while the latter to the insufficiency of the factual basis for the action. Dismissal for
failure to state a cause of action may be raised at the earliest stages of the proceedings through a motion to dismiss under Rule16 of the
Rules of Court, while dismissal for lack of cause of action may be raised any time after the questions of fact have been resolved on the
basis of stipulations, admissions or evidence presented by the plaintiff.

x x x What is contemplated, therefore, is a failure to statea cause of action which is provided in Sec. 1(g) of Rule 16. This is a matter of
insufficiency of the pleading. Sec. 5 of Rule 10, which was also included as the last mode for raising the issue to the court, refers to the
situation where the evidence does not provea cause of action. This is, therefore, a matter of insufficiency of evidence. Failure to state a
cause of action is different from failure to prove a cause of action. The remedy in the first is to move for dismissal of the pleading, whilethe
remedy in the second is to demur to the evidence, hence reference to Sec. 5 of Rule 10 has been eliminated in this section. The procedure
would consequently be to require the pleading to state a cause of action, by timely objection to its deficiency; or, at the trial, to file a
demurrer to evidence, if such motion is warranted.28

In the case at bar, both the RTC and the CA were one in dismissing petitioner’s Amended Complaint, but varied on the grounds thereof
– that is, the RTC held that there was failure tostate a cause of action while the CA ruled that there was insufficiency of factual basis.

At once, it is apparent that the CA based its dismissal on an incorrect ground. From the preceding discussion, it is clear that "insufficiency
of factual basis" is not a ground for a motion to dismiss. Rather, it is a ground which becomes available only after the questions of fact
have been resolved on the basis of stipulations, admissions or evidence presented by the plaintiff. The procedural recourse to raise such
ground is a demurrer to evidence taken only after the plaintiff’s presentation of evidence. This parameter is clear under Rule 33 of the
Rules of Court: RULE 33

Demurrer to Evidence

Section 1. Demurrer to evidence. — After the plaintiff has completed the presentation of his evidence, the defendant may move for
dismissal on the ground that upon the facts and the law the plaintiff has shown no right to relief. If his motion isdenied he shall have the
right to present evidence. If the motion is granted but on appeal the order of dismissal is reversed he shall be deemed to have waived
the right to present evidence.

At the preliminary stages of the proceedings, without any presentation of evidence even conducted, it is perceptibly impossible to assess
the insufficiency of the factual basis on which the plaintiff asserts his cause of action, as in this case. Therefore, that ground could not be
the basis for the dismissal of the action.

However, the Amended Complaint is still dismissible but on the ground of failure to state a cause of action, as correctly held by the RTC.
Said ground was properly raised by Granin a motion to dismiss pursuant to Section 1, Rule 16 of the Rules of Court:

RULE 16
Motion to Dismiss

Section 1. Grounds. — Within the time for but before filing the answer to the complaint or pleading asserting a claim, a motion to dismiss
may be made on any of the following grounds:

xxxx

(g) That the pleading asserting the claim states no cause of action;
xxxx

A complaint states a cause of action if it sufficiently avers the existence of the three (3) essential elements of a cause of action, namely:
(a) a right in favor of the plaintiff by whatever means and under whatever law it arises or is created; (b) an obligation on the part of the
named defendant to respect or not to violate such right; and (c) an act or omission on the part of the named defendant violative of the
right of the plaintiff or constituting a breach of the obligation of defendant tothe plaintiff for which the latter may maintain an action for
recovery of damages.29 If the allegations of the complaint do not state the concurrence of these elements, the complaint becomes
vulnerable to a motion to dismiss on the ground of failure to state a cause of action.30

It is well to point out that the plaintiff’s cause of action should not merely be "stated" but, importantly, the statement thereof should be
"sufficient." This is why the elementarytest in a motion to dismiss on such ground is whether or not the complaint alleges facts which if
true would justify the relief demanded.31 As a corollary, it has been held that only ultimate facts and not legal conclusions or evidentiary
facts are considered for purposes of applying the test.32 This is consistent with Section 1, Rule 8 of the Rules of Court which states that
the complaint need only allege the ultimate facts or the essential facts constituting the plaintiff’s cause of action. A fact is essential if they
cannot be stricken out without leaving the statement of the cause of action inadequate.33 Since the inquiry is into the sufficiency, not the
veracity, of the material allegations, it follows that the analysis should be confined to the four corners of the complaint, and no other.34

A judicious examination of petitioner’s Amended Complaint readily shows its failure to sufficiently state a cause of action. Contrary to the
findings of the CA, the allegations therein do not proffer ultimate facts which would warrant an action for nullification of the sale and
recovery of the properties in controversy, hence, rendering the same dismissible.

Aside from the insufficiency of petitioner’s allegations with respect to her right to the subject properties sought to be recovered, the
ultimate facts supposedly justifying the "annulment of sale," by which the reconveyance of the subject properties is sought, were also
insufficiently pleaded. The following averments in the Amended Complaint betray no more than an insufficient narration of facts:

A pleading should state the ultimate facts essential to the rights of action or defense asserted, as distinguished from mere conclusions of
fact, or conclusions of law. General allegations that a contract is valid or legal, or is just, fair, and reasonable, are mere conclusions of
law. Likewise, allegations that a contract is void, voidable, invalid, illegal, ultra vires, or against public policy, without stating facts showing
its invalidity, are mere conclusions of law.

In any event, the Court finds the Amended Complaint’s dismissal to be in order considering that petitioner’s cause of action had already
prescribed.

It is evident that Eliza ultimately seeks for the reconveyance to her of the properties through the nullification of their supposed sale to
Gran. An action for reconveyance is one that seeks to transfer property, wrongfully registered by another, to its rightful and legal owner.

ALMA JOSE VS. JAVELLANA

FACTS:

On September 8, 1979, Margarita Marquez Alma Jose (Margarita) sold for consideration of ₱160,000.00 to respondent Ramon Javellana
by deed of conditional sale two parcels of land with areas of 3,675 and 20,936 square meters located in Barangay Mallis, Guiguinto,
Bulacan. They agreed that Javellana would pay ₱80,000.00 upon the execution of the deed and the balance of ₱80,000.00 upon the
registration of the parcels of land under the Torrens System (the registration being undertaken by Margarita within a reasonable period
of time); and that should Margarita become incapacitated, her son and attorney-in-fact, Juvenal M. Alma Jose (Juvenal), and her daughter,
petitioner Priscilla M. Alma Jose, would receive the payment of the balance and proceed with the application for registration.3

After Margarita died and with Juvenal having predeceased Margarita without issue, the vendor’s undertaking fell on the shoulders of
Priscilla, being Margarita’s sole surviving heir. However, Priscilla did not comply with the undertaking to cause the registration of the
properties under the Torrens System, and, instead, began to improve the properties by dumping filling materials therein with the intention
of converting the parcels of land into a residential or industrial subdivision.4 Faced with Priscilla’s refusal to comply, Javellana commenced
on February 10, 1997 an action for specific performance, injunction, and damages against her in the Regional Trial Court in Malolos,
Bulacan (RTC), docketed as Civil Case No. 79-M-97 entitled Ramon C. Javellana, represented by Atty. Guillermo G. Blanco v. Priscilla
Alma Jose.

In Civil Case No. 79-M-97, Javellana averred that upon the execution of the deed of conditional sale, he had paid the initial amount of
₱80,000.00 and had taken possession of the parcels of land; that he had paid the balance of the purchase price to Juvenal on different
dates upon Juvenal’s representation that Margarita had needed funds for the expenses of registration and payment of real estate tax;
and that in 1996, Priscilla had called to inquire about the mortgage constituted on the parcels of land; and that he had told her then that
the parcels of land had not been mortgaged but had been sold to him.5

Javellana prayed for the issuance of a temporary restraining order or writ of preliminary injunction to restrain Priscilla from dumping filling
materials in the parcels of land; and that Priscilla be ordered to institute registration proceedings and then to execute a final deed of sale
in his favor.6

Priscilla filed a motion to dismiss, stating that the complaint was already barred by prescription; and that the complaint did not state a
cause of action.7
The RTC initially denied Priscilla’s motion to dismiss on February 4, 1998.8 However, upon her motion for reconsideration, th e RTC
reversed itself on June 24, 1999 and granted the motion to dismiss, opining that Javellana had no cause of action against her due to her
not being bound to comply with the terms of the deed of conditional sale for not being a party thereto; that there was no evidence showing
the payment of the balance; that he had never demanded the registration of the land from Margarita or Juvenal, or brought a suit for
specific performance against Margarita or Juvenal; and that his claim of paying the balance was not credible.9

Javellana moved for reconsideration, contending that the presentation of evidence of full payment was not necessary at that stage of the
proceedings; and that in resolving a motion to dismiss on the ground of failure to state a cause of action, the facts alleged in the complaint
were hypothetically admitted and only the allegations in the complaint should be considered in resolving the motion.10 Noneth eless, he
attached to the motion for reconsideration the receipts showing the payments made to Juvenal.11 Moreover, he maintained that Priscilla
could no longer succeed to any rights respecting the parcels of land because he had meanwhile acquired absolute ownership of them;
and that the only thing that she, as sole heir, had inherited from Margarita was the obligation to register them under the Torrens System.12

On June 21, 2000, the RTC denied the motion for reconsideration for lack of any reason to disturb the order of June 24, 1999.13

Accordingly, Javellana filed a notice of appeal from the June 21, 2000 order,14 which the RTC gave due course to, and the records were
elevated to the Court of Appeals (CA).

In his appeal (C.A.-G.R. CV No. 68259), Javellana submitted the following as errors of the RTC,15 to wit:

THE TRIAL COURT GRIEVOUSLY ERRED IN NOT CONSIDERING THE FACT THAT PLAINTIFF-APELLANT HAD LONG COMPLIED
WITH THE FULL PAYMENT OF THE CONSIDERATION OF THE SALE OF THE SUBJECT PROPERTY AND HAD IMMEDIATELY
TAKEN ACTUAL AND PHYSICAL POSSESSION OF SAID PROPERTY UPON THE SIGNING OF THE CONDITIONAL DEED OF SALE;

II

THE TRIAL COURT OBVIOUSLY ERRED IN MAKING TWO CONFLICTING INTERPRETATIONS OF THE PROVISION OF THE CIVIL
[CODE], PARTICULARLY ARTICLE 1911, IN THE LIGHT OF THE TERMS OF THE CONDITIONAL DEED OF SALE;

III

THE TRIAL COURT ERRED IN HOLDING THAT DEFENDANT-APPELLEE BEING NOT A PARTY TO THE CONDITIONAL DEED OF
SALE EXECUTED BY HER MOTHER IN FAVOR OF PLAINTFF-

APPELLANT IS NOT BOUND THEREBY AND CAN NOT BE COMPELLED TO DO THE ACT REQUIRED IN THE SAID DEED OF
CONDITIONAL SALE;

IV

THE TRIAL COURT ERRED IN DISMISSING THE AMENDED COMPLAINT WITHOUT HEARING THE CASE ON THE MERITS.

Priscilla countered that the June 21, 2000 order was not appealable; that the appeal was not perfected on time; and that Javellana was
guilty of forum shopping.16

It appears that pending the appeal, Javellana also filed a petition for certiorari in the CA to assail the June 24, 1999 and June 21, 2000
orders dismissing his complaint (C.A.-G.R. SP No. 60455). On August 6, 2001, however, the CA dismissed the petition for certiorari,17
finding that the RTC did not commit grave abuse of discretion in issuing the orders, and holding that it only committed, at most, an error
of judgment correctible by appeal in issuing the challenged orders.

On November 20, 2002, the CA promulgated its decision in C.A.-G.R. CV No. 68259,18 reversing and setting aside the dismissal of Civil
Case No. 79-M-97, and remanding the records to the RTC "for further proceedings in accordance with law."19 The CA explained that the
complaint sufficiently stated a cause of action; that Priscilla, as sole heir, succeeded to the rights and obligations of Margarita with respect
to the parcels of land; that Margarita’s undertaking under the contract was not a purely personal obligation but was transmissible to
Priscilla, who was consequently bound to comply with the obligation; that the action had not yet prescribed due to its being actually one
for quieting of title that was imprescriptible brought by Javellana who had actual possession of the properties; and that based on the

complaint, Javellana had been in actual possession since 1979, and the cloud on his title had come about only when Priscilla had started
dumping filling materials on the premises.20

On May 9, 2003, the CA denied the motion for reconsideration, 21 stating that it decided to give due course to the appeal even if filed out
of time because Javellana had no intention to delay the proceedings, as in fact he did not even seek an extension of time to file his
appellant’s brief; that current jurisprudence afforded litigants the amplest opportunity to present their cases free from the constraints of
technicalities, such that even if an appeal was filed out of time, the appellate court was given the discretion to nonetheless allow the
appeal for justifiable reasons.

Issues
Priscilla then brought this appeal, averring that the CA thereby erred in not outrightly dismissing Javellana’s appeal because: (a) the June
21, 2000 RTC order was not appealable; (b) the notice of appeal had been filed belatedly by three days; and (c) Javellana was guilty of
forum shopping for filing in the CA a petition for certiorari to assail the orders of the RTC that were the subject matter of his appeal pending
in the CA. She posited that, even if the CA’s decision to entertain the appeal was affirmed, the RTC’s dismissal of the complaint should
nonetheless be upheld because the complaint stated no cause of action, and the action had already prescribed.

On his part, Javellana countered that the errors being assigned by Priscilla involved questions of fact not proper for the Court to review
through petition for review on certiorari; that the June 21, 2000 RTC order, being a final order, was appealable; that his appeal was
perfected on time; and that he was not guilty of forum shopping because at the time he filed the

petition for certiorari the CA had not yet rendered a decision in C.A.-G.R.

CV No. 68259, and because the issue of ownership raised in C.A.-G.R. CV No. 68259 was different from the issue of grave abuse of
discretion raised in C.A.-G.R. SP No. 60455.

Ruling

The petition for review has no merit.

Denial of the motion for reconsideration of the

order of dismissal was a final order and appealable

Priscilla submits that the order of June 21, 2000 was not the proper subject of an appeal considering that Section 1 of Rule 41 of the
Rules of Court provides that no appeal may be taken from an order denying a motion for reconsideration.

Priscilla’s submission is erroneous and cannot be sustained.

First of all, the denial of Javellana’s motion for reconsideration left nothing more to be done by the RTC because it confirmed the dismissal
of Civil Case No. 79-M-97. It was clearly a final order, not an interlocutory one. The Court has distinguished between final and interlocutory
orders in Pahila-Garrido v. Tortogo,22 thuswise:

The distinction between a final order and an interlocutory order is well known. The first disposes of the subject matter in its entirety or
terminates a particular proceeding or action, leaving nothing more to be done except to enforce by execution what the court has
determined, but the latter does not completely dispose of the case but leaves something else to be decided upon. An interlocutory order
deals with preliminary matters and the trial on the merits is yet to be held and the judgment rendered. The test to ascertain whether or
not an order or a judgment is

interlocutory or final is: does the order or judgment leave something to be done in the trial court with respect to the merits of the case? If
it does, the order or judgment is interlocutory; otherwise, it is final.

And, secondly, whether an order is final or interlocutory determines whether appeal is the correct remedy or not. A final order is
appealable, to accord with the final judgment rule enunciated in Section 1, Rule 41 of the Rules of Court to the effect that "appeal may
be taken from a judgment or final order that completely disposes of the case, or of a particular matter therein when declared by these
Rules to be appealable;"23 but the remedy from an interlocutory one is not an appeal but a special civil action for certiorari. The
explanation for the differentiation of remedies given in Pahila-Garrido v. Tortogo is apt:

xxx The reason for disallowing an appeal from an interlocutory order is to avoid multiplicity of appeals in a single action, which necessarily
suspends the hearing and decision on the merits of the action during the pendency of the appeals. Permitting multiple appeals will
necessarily delay the trial on the merits of the case for a considerable length of time, and will compel the adverse party to incur
unnecessary expenses, for one of the parties may interpose as many appeals as there are incidental questions raised by him and as
there are interlocutory orders rendered or issued by the lower court. An interlocutory order may be the subject of an appeal, but only after
a judgment has been rendered, with the ground for appealing the order being included in the appeal of the judgment itself.

The remedy against an interlocutory order not subject of an appeal is an appropriate special civil action under Rule 65, provided that the
interlocutory order is rendered without or in excess of jurisdiction or with grave abuse of discretion. Then is certiorari under Rule 65
allowed to be resorted to.

Indeed, the Court has held that an appeal from an order denying a motion for reconsideration of a final order or judgment is effectively
an appeal from the final order or judgment itself; and has expressly clarified that the prohibition against appealing an order denying a
motion for

reconsideration referred only to a denial of a motion for reconsideration of an interlocutory order.24

II

Appeal was made on time pursuant to Neypes v. CA

Priscilla insists that Javellana filed his notice of appeal out of time. She points out that he received a copy of the June 24, 1999 order on
July 9, 1999, and filed his motion for reconsideration on July 21, 1999 (or after the lapse of 12 days); that the RTC denied his motion for
reconsideration through the order of June 21, 2000, a copy of which he received on July 13, 2000; that he had only three days from July
13, 2000, or until July 16, 2000, within which to perfect an appeal; and that having filed his notice of appeal on July 19, 2000, his appeal
should have been dismissed for being tardy by three days beyond the expiration of the reglementary period.

Section 3 of Rule 41 of the Rules of Court provides:

Section 3. Period of ordinary appeal. — The appeal shall be taken within fifteen (15) days from notice of the judgment or final order
appealed from. Where a record on appeal is required, the appellant shall file a notice of appeal and a record on appeal within thirty (30)
days from notice of the judgment or final order.

The period of appeal shall be interrupted by a timely motion for new trial or reconsideration. No motion for extension of time to file a
motion for new trial or reconsideration shall be allowed. (n)

Under the rule, Javellana had only the balance of three days from July 13, 2000, or until July 16, 2000, within which to perfect an appeal
due to the timely filing of his motion for reconsideration interrupting the running of the period of appeal. As such, his filing of the notice of
appeal only on July 19, 2000 did not perfect his appeal on time, as Priscilla insists.

The seemingly correct insistence of Priscilla cannot be upheld, however, considering that the Court meanwhile adopted the fresh period
rule in Neypes v. Court of Appeals,25 by which an aggrieved party desirous of appealing an adverse judgment or final order is allowed a
fresh period of 15 days within which to file the notice of appeal in the RTC reckoned from receipt of the order denying a motion for a new
trial or motion for reconsideration, to wit:

The Supreme Court may promulgate procedural rules in all courts. It has the sole prerogative to amend, repeal or even establish new
rules for a more simplified and inexpensive process, and the speedy disposition of cases. In the rules governing appeals to it and to the
Court of Appeals, particularly Rules 42, 43 and 45, the Court allows extensions of time, based on justifiable and compelling reasons, for
parties to file their appeals. These extensions may consist of 15 days or more.

To standardize the appeal periods provided in the Rules and to afford litigants fair opportunity to appeal their cases, the Court deems it
practical to allow a fresh period of 15 days within which to file the notice of appeal in the Regional Trial Court, counted from receipt of the
order dismissing a motion for a new trial or motion for reconsideration.

Henceforth, this "fresh period rule" shall also apply to Rule 40 governing appeals from the Municipal Trial Courts to the Regional Trial
Courts; Rule 42 on petitions for review from the Regional Trial Courts to the Court of Appeals; Rule 43 on appeals from quasi-judicial
agencies to the Court of Appeals and Rule 45 governing appeals by certiorari to the Supreme Court. The new rule aims to regiment or
make the appeal period uniform, to be counted from receipt of the order denying the motion for new trial, motion for reconsideration
(whether full or partial) or any final order or resolution.26

The fresh period rule may be applied to this case, for the Court has already retroactively extended the fresh period rule to "actions pending
and undetermined at the time of their passage and this will not violate any right of a person who may feel that he is adversely affected,
inasmuch as there are no vested rights in rules of procedure."27 According to De los Santos v. Vda. de Mangubat:28

Procedural law refers to the adjective law which prescribes rules and forms of procedure in order that courts may be able to administer
justice. Procedural laws do not come within the legal conception of a retroactive law, or the general rule against the retroactive operation
of statues ― they may be given retroactive effect on actions pending and undetermined at the time of their passage and this will not
violate any right of a person who may feel that he is adversely affected, insomuch as there are no vested rights in rules of procedure.

The "fresh period rule" is a procedural law as it prescribes a fresh period of 15 days within which an appeal may be made in the event
that the motion for reconsideration is denied by the lower court. Following the rule on retroactivity of procedural laws, the "fresh period
rule" should be applied to pending actions, such as the present case.

Also, to deny herein petitioners the benefit of the "fresh period rule" will amount to injustice, if not absurdity, since the subject notice of
judgment and final order were issued two years later or in the year 2000, as compared to the notice of judgment and final order in Neypes
which were issued in 1998. It will be incongruous and illogical that parties receiving notices of judgment and final orders issued in the
year 1998 will enjoy the benefit of the "fresh period rule" while those later rulings of the lower courts such as in the instant case, will not.29

Consequently, we rule that Javellana’s notice of appeal was timely filed pursuant to the fresh period rule.

III

No forum shopping was committed

Priscilla claims that Javellana engaged in forum shopping by filing a notice of appeal and a petition for certiorari against the same orders.
As earlier noted, he denies that his doing so violated the policy against forum shopping.

The Court expounded on the nature and purpose of forum shopping in In Re: Reconstitution of Transfer Certificates of Title Nos. 303168
and 303169 and Issuance of Owner’s Duplicate Certificates of Title In Lieu of Those Lost, Rolando Edward G. Lim, Petitioner:30
Forum shopping is the act of a party litigant against whom an adverse judgment has been rendered in one forum seeking and possibly
getting a favorable opinion in another forum, other than by appeal or the special civil action of certiorari, or the institution of two or more
actions or proceedings grounded on the same cause or supposition that one or the other court would make a favorable disposition. Forum
shopping happens when, in the two or more pending cases, there is identity of parties, identity of rights or causes of action, and identity
of reliefs sought. Where the elements of litis pendentia are present, and where a final judgment in one case will amount to res judicata in
the other, there is forum shopping. For litis pendentia to be a ground for the dismissal of an action, there must be: (a) identity of the parties
or at least such as to represent the same interest in both actions; (b) identity of rights asserted and relief prayed for, the relief being
founded on the same acts; and (c) the identity in the two cases should be such that the judgment which may be rendered in one would,
regardless of which party is successful, amount to res judicata in the other.

For forum shopping to exist, both actions must involve the same transaction, same essential facts and circumstances and must raise
identical causes of action, subject matter and issues. Clearly, it does not exist where different orders were questioned, two distinct causes
of action and issues were raised, and two objectives were sought.

Should Javellana’s present appeal now be held barred by his filing of the petition for certiorari in the CA when his appeal in that court was
yet pending?

We are aware that in Young v. Sy,31 in which the petitioner filed a notice of appeal to elevate the orders concerning the dismissal of her
case due to non-suit to the CA and a petition for certiorari in the CA assailing the same orders four months later, the Court ruled that the
successive filings of the notice of appeal and the petition for certiorari to attain the same objective of nullifying the trial court’s dismissal
orders constituted forum shopping that warranted the dismissal of both cases. The Court said:

Ineluctably, the petitioner, by filing an ordinary appeal and a petition for certiorari with the CA, engaged in forum shopping. When the
petitioner commenced the appeal, only four months had elapsed prior to her filing with the CA the Petition for Certiorari under Rule 65
and which eventually came up to this Court by way of the instant Petition (re: Non-Suit). The elements of litis pendentia are present
between the two suits. As the CA, through its Thirteenth Division, correctly noted, both suits are founded on exactly the same facts and
refer to the same subject matter—the RTC Orders which dismissed Civil Case No. SP-5703 (2000) for

failure to prosecute. In both cases, the petitioner is seeking the reversal of the RTC orders.1âwphi1 The parties, the rights asserted, the
issues professed, and the reliefs prayed for, are all the same. It is evident that the judgment of one forum may amount to res judicata in
the other.

xxxx

The remedies of appeal and certiorari under Rule 65 are mutually exclusive and not alternative or cumulative. This is a firm judicial policy.
The petitioner cannot hedge her case by wagering two or more appeals, and, in the event that the ordinary appeal lags significantly
behind the others, she cannot post facto validate this circumstance as a demonstration that the ordinary appeal had not been speedy or
adequate enough, in order to justify the recourse to Rule 65. This practice, if adopted, would sanction the filing of multiple suits in multiple
fora, where each one, as the petitioner couches it, becomes a "precautionary measure" for the rest, thereby increasing the chances of a
favorable decision. This is the very evil that the proscription on forum shopping seeks to put right. In Guaranteed Hotels, Inc. v. Baltao,
the Court stated that the grave evil sought to be avoided by the rule against forum shopping is the rendition by two competent tribunals
of two separate and contradictory decisions. Unscrupulous party litigants, taking advantage of a variety of competent tribunals, may
repeatedly try their luck in several different fora until a favorable result is reached. To avoid the resultant confusion, the Court adheres
strictly to the rules against forum shopping, and any violation of these rules results in the dismissal of the case.32

The same result was reached in Zosa v. Estrella,33 which likewise involved the successive filing of a notice of appeal and a petition for
certiorari to challenge the same orders, with the Court upholding the CA’s dismissals of the appeal and the petition for certiorari through
separate decisions.

Yet, the outcome in Young v. Sy and Zosa v. Estrella is unjust here even if the orders of the RTC being challenged through appeal and
the petition for certiorari were the same. The unjustness exists because the appeal and the petition for certiorari actually sought different
objectives. In his appeal in C.A.-G.R. CV No. 68259, Javellana aimed to undo the RTC’s erroneous dismissal of Civil Case No. 79-M-97
to clear the way for his judicial demand for specific performance to be tried and determined in due course by the RTC; but his petition for
certiorari had the ostensible objective "to prevent (Priscilla) from developing the subject property and from proceeding with the ejectment
case until his appeal is finally resolved," as the CA explicitly determined in its decision in C.A.-G.R. SP No. 60455.34

Nor were the dangers that the adoption of the judicial policy against forum shopping designed to prevent or to eliminate attendant. The
first danger, i.e., the multiplicity of suits upon one and the same cause of action, would not materialize considering that the appeal was a
continuity of Civil Case No. 79-M-97, whereas C.A.-G.R. SP No. 60455 dealt with an independent ground of alleged grave abuse of
discretion amounting to lack or excess of jurisdiction on the part of the RTC. The second danger, i.e., the unethical malpractice of shopping
for a friendly court or judge to ensure a favorable ruling or judgment after not getting it in the appeal, would not arise because the CA had
not yet decided C.A.-G.R. CV No. 68259 as of the filing of the petition for certiorari.

Instead, we see the situation of resorting to two inconsistent remedial approaches to be the result of the tactical misjudgment by
Javellana’s counsel on the efficacy of the appeal to stave off his caretaker’s eviction from the parcels of land and to prevent the
development of them into a residential or commercial subdivision pending the appeal. In the petition for certiorari, Javellana explicitly
averred that his appeal was "inadequate and not speedy to prevent private respondent Alma Jose and her transferee/assignee xxx from
developing and disposing of the subject property to other parties to the total deprivation of petitioner’s rights of possession and ownership
over the subject property," and that the dismissal by the RTC had "emboldened private respondents to fully develop the property and for
respondent Alma Jose to file an ejectment case against petitioner’s overseer xxx."35 Thereby, it became far-fetched that Javellana
brought the petition for certiorari in violation of the policy against forum shopping.

WHEREFORE, the Court DENIES the petition for review on certiorari; AFFIRMS the decision promulgated on November 20, 2002; and
ORDERS the petitioner to pay the costs of suit.

FELS ENERGY VS. PROVINCE OF BATANGAS

FACTS:

On January 18, 1993, NPC entered into a lease contract with Polar Energy, Inc. over 3x30 MW diesel engine power barges moored at
Balayan Bay in Calaca, Batangas. The contract, denominated as an Energy Conversion Agreement5 (Agreement), was for a period of
five years. Article 10 reads:

10.1 RESPONSIBILITY. NAPOCOR shall be responsible for the payment of (a) all taxes, import duties, fees, charges and other levies
imposed by the National Government of the Republic of the Philippines or any agency or instrumentality thereof to which POLAR may be
or become subject to or in relation to the performance of their obligations under this agreement (other than (i) taxes imposed or calculated
on the basis of the net income of POLAR and Personal Income Taxes of its employees and (ii) construction permit fees, environmental
permit fees and other similar fees and charges) and (b) all real estate taxes and assessments, rates and other charges in respect of the
Power Barges.6

Subsequently, Polar Energy, Inc. assigned its rights under the Agreement to FELS. The NPC initially opposed the assignment of rights,
citing paragraph 17.2 of Article 17 of the Agreement.

On August 7, 1995, FELS received an assessment of real property taxes on the power barges from Provincial Assessor Lauro C. Andaya
of Batangas City. The assessed tax, which likewise covered those due for 1994, amounted to ₱56,184,088.40 per annum. FELS referred
the matter to NPC, reminding it of its obligation under the Agreement to pay all real estate taxes. It then gave NPC the full power and
authority to represent it in any conference regarding the real property assessment of the Provincial Assessor.

In a letter7 dated September 7, 1995, NPC sought reconsideration of the Provincial Assessor’s decision to assess real property taxes on
the power barges. However, the motion was denied on September 22, 1995, and the Provincial Assessor advised NPC to pay the
assessment.8 This prompted NPC to file a petition with the Local Board of Assessment Appeals (LBAA) for the setting aside of the
assessment and the declaration of the barges as non-taxable items; it also prayed that should LBAA find the barges to be taxable, the
Provincial Assessor be directed to make the necessary corrections.9

In its Answer to the petition, the Provincial Assessor averred that the barges were real property for purposes of taxation under Section
199(c) of Republic Act (R.A.) No. 7160.

Before the case was decided by the LBAA, NPC filed a Manifestation, informing the LBAA that the Department of Finance (DOF) had
rendered an opinion10 dated May 20, 1996, where it is clearly stated that power barges are not real property subject to real property
assessment.

On August 26, 1996, the LBAA rendered a Resolution11 denying the petition. The fallo reads:

WHEREFORE, the Petition is DENIED. FELS is hereby ordered to pay the real estate tax in the amount of ₱56,184,088.40, for the year
1994.

SO ORDERED.12

The LBAA ruled that the power plant facilities, while they may be classified as movable or personal property, are nevertheless considered
real property for taxation purposes because they are installed at a specific location with a character of permanency. The LBAA also
pointed out that the owner of the barges–FELS, a private corporation–is the one being taxed, not NPC. A mere agreement making NPC
responsible for the payment of all real estate taxes and assessments will not justify the exemption of FELS; such a privilege can only be
granted to NPC and cannot be extended to FELS. Finally, the LBAA also ruled that the petition was filed out of time.

Aggrieved, FELS appealed the LBAA’s ruling to the Central Board of Assessment Appeals (CBAA).

On August 28, 1996, the Provincial Treasurer of Batangas City issued a Notice of Levy and Warrant by Distraint13 over the power barges,
seeking to collect real property taxes amounting to ₱232,602,125.91 as of July 31, 1996. The notice and warrant was officially served to
FELS on November 8, 1996. It then filed a Motion to Lift Levy dated November 14, 1996, praying that the Provincial Assessor be further
restrained by the CBAA from enforcing the disputed assessment during the pendency of the appeal.

On November 15, 1996, the CBAA issued an Order14 lifting the levy and distraint on the properties of FELS in order not to preempt and
render ineffectual, nugatory and illusory any resolution or judgment which the Board would issue.

Meantime, the NPC filed a Motion for Intervention15 dated August 7, 1998 in the proceedings before the CBAA. This was approved by
the CBAA in an Order16 dated September 22, 1998.
During the pendency of the case, both FELS and NPC filed several motions to admit bond to guarantee the payment of real prope rty
taxes assessed by the Provincial Assessor (in the event that the judgment be unfavorable to them). The bonds were duly approved by
the CBAA.

On April 6, 2000, the CBAA rendered a Decision17 finding the power barges exempt from real property tax. The dispositive portion reads:

WHEREFORE, the Resolution of the Local Board of Assessment Appeals of the Province of Batangas is hereby reversed. Respondent-
appellee Provincial Assessor of the Province of Batangas is hereby ordered to drop subject property under ARP/Tax Declaration No. 018-
00958 from the List of Taxable Properties in the Assessment Roll. The Provincial Treasurer of Batangas is hereby directed to act
accordingly.

SO ORDERED.18

Ruling in favor of FELS and NPC, the CBAA reasoned that the power barges belong to NPC; since they are actually, directly and
exclusively used by it, the power barges are covered by the exemptions under Section 234(c) of R.A. No. 7160.19 As to the other
jurisdictional issue, the CBAA ruled that prescription did not preclude the NPC from pursuing its claim for tax exemption in accordance
with Section 206 of R.A. No. 7160. The Provincial Assessor filed a motion for reconsideration, which was opposed by FELS and NPC.

In a complete volte face, the CBAA issued a Resolution20 on July 31, 2001 reversing its earlier decision. The fallo of the resolution reads:

WHEREFORE, premises considered, it is the resolution of this Board that:

(a) The decision of the Board dated 6 April 2000 is hereby reversed.

(b) The petition of FELS, as well as the intervention of NPC, is dismissed.

(c) The resolution of the Local Board of Assessment Appeals of Batangas is hereby affirmed,

(d) The real property tax assessment on FELS by the Provincial Assessor of Batangas is likewise hereby affirmed.

SO ORDERED.21

FELS and NPC filed separate motions for reconsideration, which were timely opposed by the Provincial Assessor. The CBAA denied the
said motions in a Resolution22 dated October 19, 2001.

Dissatisfied, FELS filed a petition for review before the CA docketed as CA-G.R. SP No. 67490. Meanwhile, NPC filed a separate petition,
docketed as CA-G.R. SP No. 67491.

On January 17, 2002, NPC filed a Manifestation/Motion for Consolidation in CA-G.R. SP No. 67490 praying for the consolidation of its
petition with CA-G.R. SP No. 67491. In a Resolution23 dated February 12, 2002, the appellate court directed NPC to re-file its motion for
consolidation with CA-G.R. SP No. 67491, since it is the ponente of the latter petition who should resolve the request for reconsideration.

NPC failed to comply with the aforesaid resolution. On August 25, 2004, the Twelfth Division of the appellate court rendered judgment in
CA-G.R. SP No. 67490 denying the petition on the ground of prescription. The decretal portion of the decision reads:

WHEREFORE, the petition for review is DENIED for lack of merit and the assailed Resolutions dated July 31, 2001 and October 19, 2001
of the Central Board of Assessment Appeals are AFFIRMED.

SO ORDERED.24

On September 20, 2004, FELS timely filed a motion for reconsideration seeking the reversal of the appellate court’s decision in CA-G.R.
SP No. 67490.

Thereafter, NPC filed a petition for review dated October 19, 2004 before this Court, docketed as G.R. No. 165113, assailing the appellate
court’s decision in CA-G.R. SP No. 67490. The petition was, however, denied in this Court’s Resolution25 of November 8, 2004, for
NPC’s failure to sufficiently show that the CA committed any reversible error in the challenged decision. NPC filed a motion for
reconsideration, which the Court denied with finality in a Resolution26 dated January 19, 2005.

Meantime, the appellate court dismissed the petition in CA-G.R. SP No. 67491. It held that the right to question the assessment of the
Provincial Assessor had already prescribed upon the failure of FELS to appeal the disputed assessment to the LBAA within the period
prescribed by law. Since FELS had lost the right to question the assessment, the right of the Provincial Government to collect the tax was
already absolute.

NPC filed a motion for reconsideration dated March 8, 2005, seeking reconsideration of the February 5, 2005 ruling of the CA in CA-G.R.
SP No. 67491. The motion was denied in a Resolution27 dated November 23, 2005.

The motion for reconsideration filed by FELS in CA-G.R. SP No. 67490 had been earlier denied for lack of merit in a Resolution28 dated
June 20, 2005.
On August 3, 2005, FELS filed the petition docketed as G.R. No. 168557 before this Court, raising the following issues:

A.

Whether power barges, which are floating and movable, are personal properties and therefore, not subject to real property tax.

B.

Assuming that the subject power barges are real properties, whether they are exempt from real estate tax under Section 234 of the Local
Government Code ("LGC").

C.

Assuming arguendo that the subject power barges are subject to real estate tax, whether or not it should be NPC which should be made
to pay the same under the law.

D.

Assuming arguendo that the subject power barges are real properties, whether or not the same is subject to depreciation just like any
other personal properties.

E.

Whether the right of the petitioner to question the patently null and void real property tax assessment on the petitioner’s personal
properties is imprescriptible.29

On January 13, 2006, NPC filed its own petition for review before this Court (G.R. No. 170628), indicating the following errors committed
by the CA:

THE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT THE APPEAL TO THE LBAA WAS FILED OUT OF TIME.

II

THE COURT OF APPEALS GRAVELY ERRED IN NOT HOLDING THAT THE POWER BARGES ARE NOT SUBJECT TO REAL
PROPERTY TAXES.

III

THE COURT OF APPEALS GRAVELY ERRED IN NOT HOLDING THAT THE ASSESSMENT ON THE POWER BARGES WAS NOT
MADE IN ACCORDANCE WITH LAW.30

Considering that the factual antecedents of both cases are similar, the Court ordered the consolidation of the two cases in a Resolution31
dated March 8, 2006.1awphi1.net

In an earlier Resolution dated February 1, 2006, the Court had required the parties to submit their respective Memoranda within 30 days
from notice. Almost a year passed but the parties had not submitted their respective memoranda. Considering that taxes—the lifeblood
of our economy—are involved in the present controversy, the Court was prompted to dispense with the said pleadings, with the end view
of advancing the interests of justice and avoiding further delay.

In both petitions, FELS and NPC maintain that the appeal before the LBAA was not time-barred. FELS argues that when NPC moved to
have the assessment reconsidered on September 7, 1995, the running of the period to file an appeal with the LBAA was tolled. For its
part, NPC posits that the 60-day period for appealing to the LBAA should be reckoned from its receipt of the denial of its motion for
reconsideration.

Petitioners’ contentions are bereft of merit.

Section 226 of R.A. No. 7160, otherwise known as the Local Government Code of 1991, provides:

SECTION 226. Local Board of Assessment Appeals. – Any owner or person having legal interest in the property who is not satisfied with
the action of the provincial, city or municipal assessor in the assessment of his property may, within sixty (60) days from the date of
receipt of the written notice of assessment, appeal to the Board of Assessment Appeals of the province or city by filing a petition under
oath in the form prescribed for the purpose, together with copies of the tax declarations and such affidavits or documents submitted in
support of the appeal.

We note that the notice of assessment which the Provincial Assessor sent to FELS on August 7, 1995, contained the following statement:
If you are not satisfied with this assessment, you may, within sixty (60) days from the date of receipt hereof, appeal to the Board of
Assessment Appeals of the province by filing a petition under oath on the form prescribed for the purpose, together with copies of ARP/Tax
Declaration and such affidavits or documents submitted in support of the appeal.32

Instead of appealing to the Board of Assessment Appeals (as stated in the notice), NPC opted to file a motion for reconsideration of the
Provincial Assessor’s decision, a remedy not sanctioned by law.

The remedy of appeal to the LBAA is available from an adverse ruling or action of the provincial, city or municipal assessor in the
assessment of the property. It follows then that the determination made by the respondent Provincial Assessor with regard to the taxability
of the subject real properties falls within its power to assess properties for taxation purposes subject to appeal before the LBAA.33

We fully agree with the rationalization of the CA in both CA-G.R. SP No. 67490 and CA-G.R. SP No. 67491. The two divisions of the
appellate court cited the case of Callanta v. Office of the Ombudsman,34 where we ruled that under Section 226 of R.A. No 7160,35 the
last action of the local assessor on a particular assessment shall be the notice of assessment; it is this last action which gives the owner
of the property the right to appeal to the LBAA. The procedure likewise does not permit the property owner the remedy of filing a motion
for reconsideration before the local assessor. The pertinent holding of the Court in Callanta is as follows:

x x x [T]he same Code is equally clear that the aggrieved owners should have brought their appeals before the LBAA. Unfortunately,
despite the advice to this effect contained in their respective notices of assessment, the owners chose to bring their requests for a
review/readjustment before the city assessor, a remedy not sanctioned by the law. To allow this procedure would indeed invite corruption
in the system of appraisal and assessment. It conveniently courts a graft-prone situation where values of real property may be initially set
unreasonably high, and then subsequently reduced upon the request of a property owner. In the latter instance, allusions of a possible
covert, illicit trade-off cannot be avoided, and in fact can conveniently take place. Such occasion for mischief must be prevented and
excised from our system.36

For its part, the appellate court declared in CA-G.R. SP No. 67491:

x x x. The Court announces: Henceforth, whenever the local assessor sends a notice to the owner or lawful possessor of real property of
its revised assessed value, the former shall no longer have any jurisdiction to entertain any request for a review or readjustment. The
appropriate forum where the aggrieved party may bring his appeal is the LBAA as provided by law. It follows ineluctably that the 60-day
period for making the appeal to the LBAA runs without interruption. This is what We held in SP 67490 and reaffirm today in SP 67491.37

To reiterate, if the taxpayer fails to appeal in due course, the right of the local government to collect the taxes due with respect to the
taxpayer’s property becomes absolute upon the expiration of the period to appeal.38 It also bears stressing that the taxpayer’s failure to
question the assessment in the LBAA renders the assessment of the local assessor final, executory and demandable, thus, precluding
the taxpayer from questioning the correctness of the assessment, or from invoking any defense that would reopen the question of its
liability on the merits.39

In fine, the LBAA acted correctly when it dismissed the petitioners’ appeal for having been filed out of time; the CBAA and the appellate
court were likewise correct in affirming the dismissal. Elementary is the rule that the perfection of an appeal within the period therefor is
both mandatory and jurisdictional, and failure in this regard renders the decision final and executory.40

In the Comment filed by the Provincial Assessor, it is asserted that the instant petition is barred by res judicata; that the final and executory
judgment in G.R. No. 165113 (where there was a final determination on the issue of prescription), effectively precludes the claims herein;
and that the filing of the instant petition after an adverse judgment in G.R. No. 165113 constitutes forum shopping.

FELS maintains that the argument of the Provincial Assessor is completely misplaced since it was not a party to the erroneous petition
which the NPC filed in G.R. No. 165113. It avers that it did not participate in the aforesaid proceeding, and the Supreme Court never
acquired jurisdiction over it. As to the issue of forum shopping, petitioner claims that no forum shopping could have been committed since
the elements of litis pendentia or res judicata are not present.

We do not agree.

Res judicata pervades every organized system of jurisprudence and is founded upon two grounds embodied in various maxims of
common law, namely: (1) public policy and necessity, which makes it to the interest of the

State that there should be an end to litigation – republicae ut sit litium; and (2) the hardship on the individual of being vexed twice for the
same cause – nemo debet bis vexari et eadem causa. A conflicting doctrine would subject the public peace and quiet to the will and
dereliction of individuals and prefer the regalement of the litigious disposition on the part of suitors to the preservation of the public
tranquility and happiness.41 As we ruled in Heirs of Trinidad De Leon Vda. de Roxas v. Court of Appeals:42

x x x An existing final judgment or decree – rendered upon the merits, without fraud or collusion, by a court of competent jurisdiction
acting upon a matter within its authority – is conclusive on the rights of the parties and their privies. This ruling holds in all other actions
or suits, in the same or any other judicial tribunal of concurrent jurisdiction, touching on the points or matters in issue in the first suit.

xxx

Courts will simply refuse to reopen what has been decided. They will not allow the same parties or their privies to litigate anew a question
once it has been considered and decided with finality. Litigations must end and terminate sometime and somewhere. The effective and
efficient administration of justice requires that once a judgment has become final, the prevailing party should not be deprived of the fruits
of the verdict by subsequent suits on the same issues filed by the same parties.

This is in accordance with the doctrine of res judicata which has the following elements: (1) the former judgment must be final; (2) the
court which rendered it had jurisdiction over the subject matter and the parties; (3) the judgment must be on the merits; and (4) there
must be between the first and the second actions, identity of parties, subject matter and causes of action. The application of the doctrine
of res judicata does not require absolute identity of parties but merely substantial identity of parties. There is substantial identity of parties
when there is community of interest or privity of interest between a party in the first and a party in the second case even if the first case
did not implead the latter.43

To recall, FELS gave NPC the full power and authority to represent it in any proceeding regarding real property assessment. Therefore,
when petitioner NPC filed its petition for review docketed as G.R. No. 165113, it did so not only on its behalf but also on behalf of FELS.
Moreover, the assailed decision in the earlier petition for review filed in this Court was the decision of the appellate court in CA-G.R. SP
No. 67490, in which FELS was the petitioner. Thus, the decision in G.R. No. 165116 is binding on petitioner FELS under the principle of
privity of interest. In fine, FELS and NPC are substantially "identical parties" as to warrant the application of res judicata. FELS’s argument
that it is not bound by the erroneous petition filed by NPC is thus unavailing.

On the issue of forum shopping, we rule for the Provincial Assessor. Forum shopping exists when, as a result of an adverse judgment in
one forum, a party seeks another and possibly favorable judgment in another forum other than by appeal or special civil action or certiorari.
There is also forum shopping when a party institutes two or more actions or proceedings grounded on the same cause, on the gamble
that one or the other court would make a favorable disposition.44

Petitioner FELS alleges that there is no forum shopping since the elements of res judicata are not present in the cases at bar; however,
as already discussed, res judicata may be properly applied herein. Petitioners engaged in forum shopping when they filed G.R. Nos.
168557 and 170628 after the petition for review in G.R. No. 165116. Indeed, petitioners went from one court to another trying to get a
favorable decision from one of the tribunals which allowed them to pursue their cases.

It must be stressed that an important factor in determining the existence of forum shopping is the vexation caused to the courts and the
parties-litigants by the filing of similar cases to claim substantially the same reliefs.45 The rationale against forum shopping is that a party
should not be allowed to pursue simultaneous remedies in two different fora. Filing multiple petitions or complaints constitutes abuse of
court processes, which tends to degrade the administration of justice, wreaks havoc upon orderly judicial procedure, and adds to the
congestion of the heavily burdened dockets of the courts.46

Thus, there is forum shopping when there exist: (a) identity of parties, or at least such parties as represent the same interests in both
actions, (b) identity of rights asserted and relief prayed for, the relief being founded on the same facts, and (c) the identity of the two
preceding particulars is such that any judgment rendered in the pending case, regardless of which party is successful, would amount to
res judicata in the other.47

Having found that the elements of res judicata and forum shopping are present in the consolidated cases, a discussion of the other issues
is no longer necessary. Nevertheless, for the peace and contentment of petitioners, we shall shed light on the merits of the case.

As found by the appellate court, the CBAA and LBAA power barges are real property and are thus subject to real property tax. This is
also the inevitable conclusion, considering that G.R. No. 165113 was dismissed for failure to sufficiently show any reversible error. Tax
assessments by tax examiners are presumed correct and made in good faith, with the taxpayer having the burden of proving otherwise.48
Besides, factual findings of administrative bodies, which have acquired expertise in their field, are generally binding and conclusive upon
the Court; we will not assume to interfere with the sensible exercise of the judgment of men especially trained in appraising property.
Where the judicial mind is left in doubt, it is a sound policy to leave the assessment undisturbed.49 We find no reason to depart from this
rule in this case.

In Consolidated Edison Company of New York, Inc., et al. v. The City of New York, et al.,50 a power company brought an action to review
property tax assessment. On the city’s motion to dismiss, the Supreme Court of New York held that the barges on which were mounted
gas turbine power plants designated to generate electrical power, the fuel oil barges which supplied fuel oil to the power plant barges,
and the accessory equipment mounted on the barges were subject to real property taxation.

Moreover, Article 415 (9) of the New Civil Code provides that "[d]ocks and structures which, though floating, are intended by their nature
and object to remain at a fixed place on a river, lake, or coast" are considered immovable property. Thus, power barges are categorized
as immovable property by destination, being in the nature of machinery and other implements intended by the owner for an industry or
work which may be carried on in a building or on a piece of land and which tend directly to meet the needs of said industry or work.51

Petitioners maintain nevertheless that the power barges are exempt from real estate tax under Section 234 (c) of R.A. No. 7160 because
they are actually, directly and exclusively used by petitioner NPC, a government- owned and controlled corporation engaged in the supply,
generation, and transmission of electric power.

We affirm the findings of the LBAA and CBAA that the owner of the taxable properties is petitioner FELS, which in fine, is the entity being
taxed by the local government. As stipulated under Section 2.11, Article 2 of the Agreement:

OWNERSHIP OF POWER BARGES. POLAR shall own the Power Barges and all the fixtures, fittings, machinery and equipment on the
Site used in connection with the Power Barges which have been supplied by it at its own cost. POLAR shall operate, manage and maintain
the Power Barges for the purpose of converting Fuel of NAPOCOR into electricity.52
It follows then that FELS cannot escape liability from the payment of realty taxes by invoking its exemption in Section 234 (c) of R.A. No.
7160, which reads:

SECTION 234. Exemptions from Real Property Tax. – The following are exempted from payment of the real property tax:

xxx

(c) All machineries and equipment that are actually, directly and exclusively used by local water districts and government-owned or
controlled corporations engaged in the supply and distribution of water and/or generation and transmission of electric power; x x x

Indeed, the law states that the machinery must be actually, directly and exclusively used by the government owned or controlled
corporation; nevertheless, petitioner FELS still cannot find solace in this provision because Section 5.5, Article 5 of the Agreement
provides:

OPERATION. POLAR undertakes that until the end of the Lease Period, subject to the supply of the necessary Fuel pursuant to Article
6 and to the other provisions hereof, it will operate the Power Barges to convert such Fuel into electricity in accordance with Part A of
Article 7.53

It is a basic rule that obligations arising from a contract have the force of law between the parties. Not being contrary to law, morals, good
customs, public order or public policy, the parties to the contract are bound by its terms and conditions.54

Time and again, the Supreme Court has stated that taxation is the rule and exemption is the exception.55 The law does not l ook with
favor on tax exemptions and the entity that would seek to be thus privileged must justify it by words too plain to be mistaken and too
categorical to be misinterpreted.56 Thus, applying the rule of strict construction of laws granting tax exemptions, and the rule that doubts
should be resolved in favor of provincial corporations, we hold that FELS is considered a taxable entity.

The mere undertaking of petitioner NPC under Section 10.1 of the Agreement, that it shall be responsible for the payment of all real estate
taxes and assessments, does not justify the exemption. The privilege granted to petitioner NPC cannot be extended to FELS. The
covenant is between FELS and NPC and does not bind a third person not privy thereto, in this case, the Province of Batangas.

It must be pointed out that the protracted and circuitous litigation has seriously resulted in the local government’s deprivation of revenues.
The power to tax is an incident of sovereignty and is unlimited in its magnitude, acknowledging in its very nature no perimeter so that
security against its abuse is to be found only in the responsibility of the legislature which imposes the tax on the constituency who are to
pay for it.57 The right of local government units to collect taxes due must always be upheld to avoid severe tax erosion. This consideration
is consistent with the State policy to guarantee the autonomy of local governments58 and the objective of the Local Government Code
that they enjoy genuine and meaningful local autonomy to empower them to achieve their fullest development as self-reliant communities
and make them effective partners in the attainment of national goals.59

In conclusion, we reiterate that the power to tax is the most potent instrument to raise the needed revenues to finance and support myriad
activities of the local government units for the delivery of basic services essential to the promotion of the general welfare and the
enhancement of peace, progress, and prosperity of the people.60

WHEREFORE, the Petitions are DENIED and the assailed Decisions and Resolutions AFFIRMED.

SO ORDERED.

PINEDA VS. HEIRS OF ELISEO GUEVARRA

FACTS:

On appeal by way of certiorari under Rule 45 of the 1997 Rules of Civil Procedure are the Decision1 and Resolution of the Court of
Appeals in CA-G.R. CV No. 54074. The Decision reversed the order of dismissal of the Regional Trial Court (RTC), Branch 273,
Marikina, and directed the court a quo to conduct trial on the merits, while the Resolution denied petitioner Pineda’s motion for
reconsideration.

As borne out by the records, the following are the factual antecedents.

On 7 September 1995, respondents Eliseo Guevara, Jr., Zenaida G. Sapalicio, Dante G. Guevara and Isagani S. Guevara, collectively
referred hereinafter as the Guevara heirs, filed an action for the nullification of the certificates of title of a parcel of land measuring
approximately 2,304 hectares situated in Marikina.

Named defendants were the estate of the late Pedro Gonzales, Virginia Perez, Crisanta Perez, Jose Perez, Roy Guadalupe, Lino
Bucad and Florentino Pineda. The complaint, docketed as Civil Case No. 95-171-MK, was raffled to Branch 273 of the RTC of Marikina.

The Guevara heirs alleged in the complaint that they were the co-owners of a property originally covered by Original Certificate of Title
(OCT) No. 386 issued on 7 December 1910 in favor of the spouses Emiliano Guevara and Matilde Crimen. The couple’s son, and the
Guevara heirs’ predecessor-in-interest, Eliseo Guevara, allegedly purchased the property on 1 January 1932 and had exercised
ownership over the property since then by selling and donating portions thereof to third persons. The Guevara heirs averred that the
sale of the property to Eliseo Guevara was annotated at the back of OCT No. 386.

According to the Guevara heirs, the defendants illegally claimed ownership and possession over a certain portion of the property,
particularly that area covered by Transfer Certificate of Title (TCT) No. 223361 issued to the estate of Pedro C. Gonzales. TCT No.
223361 was derived from OCT No. 629, which the Guevara heirs described as fake, having been issued only on 26 January 1912 or
subsequent to the issuance of OCT No. 386. Hence, the Guevara heirs prayed that OCT No. 629 and its derivative titles, to wit, TCT
Nos. 223361, 244447, 244448, 244449 be cancelled, that the Guevara heirs be declared owners of the property and that a new
certificate of title be issued in their names.

Defendant Pineda filed an answer with counterclaim, raising the defenses of lack of cause of action, prescription, laches and estoppel.
He averred that he was a buyer in good faith and had been in actual possession of the land since 1970 initially as a lessor and
subsequently as an owner. He registered the property in his name and was issued TCT No. 257272.

Defendants Virginia, Crisanta, and Jose, all surnamed Perez, filed an answer with compulsory counterclaim and averred that their
father, Marcos Perez, purchased the property from the late Pedro Gonzales and had it declared in Perez’s name for taxation purposes.
According to them, they had been in actual possession of a lot measuring 375 square meters before 1958 and had been regularly
paying the property taxes thereon.

The rest of the defendants, including the estate of Pedro Gonzales, also filed an answer with counterclaim, raising the same defenses
of laches and prescription and res judicata. They claimed that OCT No. 629 was issued to the Municipality of Marikina in 1912 and that
the late Pedro Gonzales and his family started occupying the property as early as 1950 as lessees thereon. The late Pedro Gonzales
allegedly bought the property from the Municipality of Marikina in a public bidding on 25 April 1966 and had allowed defendants to
occupy the property. They asserted that the Guevara heirs never actually occupied the property.

On 4 December 1995, the RTC set the case for hearing as if a motion to dismiss had been filed. During the hearing, the parties
presented oral arguments and were directed to file their memoranda.

After submission of memoranda, the RTC issued an Order dated 7 May 1996, dismissing the action on the ground of laches. The
Guevara heirs appealed the order of dismissal, claiming the denial of their right to due process.

On 23 August 1999, the Court of Appeals promulgated the assailed Decision, which set aside the RTC’s order of dismissal and directed
the reinstatement of Civil Case No. 95-171-MK. The appellate court ruled that a complaint cannot be dismissed under Rule

16, Section 12 of the Rules of Court based on laches since laches is not one of the grounds enumerated under said provision. Although
the RTC order of dismissal did not rule on the other affirmative defenses raised by petitioners in the answer, such as lack of cause of
action, prescription and res judicata, the Court of Appeals discussed them and ruled that none of these affirmative defenses raised
were present to warrant the dismissal of the action.

Only Pineda sought reconsideration. In its 3 May 2000 Resolution, the Court of Appeals denied Pineda’s motion. Hence, the instant
petition, attributing the following errors to the Court of Appeals:

THE COURT OF APPEALS ERRED IN TAKING COGNIZANCE OF THE APPEAL OF RESPONDENTS WHICH RAISED ONLY
PURELY QUESTIONS OF LAW; AND, THEREFORE, IT ACTED WITHOUT JURISDICTION IN HEARING AND DECIDING THE SAID
APPEALED CASE.

THE COURT OF APPEALS ERRED IN NOT CONSIDERING THE AFFIRMATIVE DEFENSE OF LACHES AS ANALOGOUS TO
PRESCRIPTION.

THE COURT OF APPEALS ERRED IN HOLDING THAT THE TRIAL COURT’S DISMISSAL OF THE RESPONDENTS’ COMPLAINT
IS ERRONEOUS FOR THE REASON THAT THE AFFIRMATIVE DEFENSE OF LACHES IS NOT AMONG THE GROUNDS FOR A
MOTION TO DISMISS UNDER THE RULES, WHICH MAY BE ALLEGED AS AFFIRMATIVE DEFENSE TO BE PROVED DURING
THE TRIAL.

AS A COROLLARY TO THE THIRD ASSIGNED ERROR ABOVE, THE COURT OF APPEALS ERRED IN NOT TREATING THE
ASSAILED ORDER OF DISMISSAL OF RESPONDENTS’ COMPLAINT BY THE TRIAL COURT AS A SUMMARY JUDGMENT, TO
AVOID PROTRACTED LITIGATION.

THE COURT OF APPEALS ERRED IN NOT HOLDING THAT WHILE PRESCRIPTION IN DEROGATION OF THE TITLE TO
REGISTERED OWNERS WILL NOT LIE, LACHES WILL.3

Counsel for the estate of Pedro Gonzales filed a Comment/Manifestation,4 stating that her clients have adopted and joined Pineda’s
petition praying for the reinstatement of the trial court’s order of dismissal.

At bottom, the petition raises two main issues, to wit: (1) whether or not the appeal of the heirs of Guevara was improperly elevated to
the Court of Appeals since, according to them, it raised a pure question of law; and (2) whether or not the trial court correctly dismissed
the action on the ground of laches without conducting trial on the merits.
Petitioner Pineda had ample opportunity to raise before the Court of Appeals the objection on the improper mode of appeal taken by the
heirs of Guevara. This, he failed to do. The issue of improper appeal was raised only in Pineda’s motion for reconsideration of the Court
of Appeals’ Decision. Hence, this Court cannot now, for the first time on appeal, pass upon this issue. For an issue cannot be raised for
the first time on appeal.5 In any case, the appeal by the heirs of Guevara also raised the issue regarding the existence of laches on the
part of petitioners as defendants, which is factual in nature as discussed below.

Now, did the trial court correctly order the dismissal of the complaint based on laches without conducting trial on the merits? The Court
of Appeals disagreed, holding that under Rule 16, Section 16 of the Rules of Court, laches is not enumerated under said provision,
hence, it must be proved during trial. On the other hand, petitioner Pineda asserts that laches is analogous to prescription and,
therefore, can be a ground of dismissing a complaint as though a motion to dismiss is filed.

Well-settled is the rule that the elements of laches must be proved positively. Laches is evidentiary in nature which could not be
established by mere allegations in the pleadings and can not be resolved in a motion to dismiss. At this stage therefore, the dismissal of
the complaint on the ground of laches is premature.7 Those issues must be resolved at the trial of the case on the merits wherein both
parties will be given ample opportunity to prove their respective claims and defenses.8

The elements of laches are: (1) conduct on the part of the defendant, or of one under whom he claims, giving rise to the situation of
which the complaint seeks a remedy; (2) delay in asserting the complainant’s rights, the complainant having had knowledge or notice of
the defendant’s conduct as having been afforded an opportunity to institute a suit; (3) lack of knowledge or notice on the part of the
defendant that the complainant would assert the right in which he bases his suit; and (4) injury or prejudice to the defendant in the event
relief is accorded to the complainant, or the suit is not held barred.9

Whether or not the elements of laches are present is a question involving a factual determination by the trial court. There is no absolute
rule as to what constitutes laches or staleness of demand; each case is to be determined according to its particular circumstances.10
Laches is not concerned with the mere lapse of time, rather, the party must have been afforded an opportunity to pursue his claim in
order that the delay may sufficiently constitute laches.11 Without prejudging the instant case, an apparent delay in the enforcement of
one’s claim does not automatically constitute laches. The party charged with negligence or omission in invoking his right must be
afforded the opportunity to raise his defenses, which can be accommodated only in a contentious proceeding.

In reversing the RTC’s order of dismissal, the Court of Appeals held that "laches could not be a ground to dismiss the complaint as it is
not enumerated under Rule 16, Section 1."12 This is not entirely correct. Under paragraph (h) thereof, where a claim or demand set
forth in the plaintiff’s pleading has been paid, waived, abandoned, or otherwise extinguished, the same may be raised in a motion to
dismiss. The language of the rule, particularly on the relation of the words "abandoned" and "otherwise extinguished" to the phrase
"claim or demand deemed set forth in the plaintiff’s pleading" is broad enough to include within its ambit the defense of bar by laches.
However, when a party moves for the dismissal of the complaint based on laches, the trial court must set a hearing on the motion
where the parties shall submit not only their arguments on the questions of law but also their evidence on the questions of fact
involved.13 Thus, being factual in nature, the elements of laches must be proved or disproved through the presentation of evidence by
the parties. As discussed above, an apparent delay in the filing of a complaint as shown in a pleading does not automatically warrant
the dismissal of the complaint on the ground of laches.

In the case at bar, while the trial court correctly set the case for hearing as though a motion to dismiss had been filed, the records do
not reveal that it extended to the parties the opportunity to present evidence. For instance, counsel for the heirs of Guevara filed and
served written interrogatories14 on one of the defendants but the trial court held in abeyance the resolution of the motion to order the
defendant to submit answers to the written interrogatories.15 The trial court likewise denied the Ex Parte Motion To Set Trial filed by the
heirs of Guevara.16 These were the instances which would have enabled the trial court to receive evidence on which to anchor its
factual findings. Although the trial court heard oral arguments and required the parties to submit their respective memoranda, the
presentation of evidence on the defenses which are grounds for a motion to dismiss was not held at all. Otherwise, the oral arguments
and memoranda submitted by the parties would have enabled this Court to review the trial court’s factual finding of laches instead of
remanding the case for trial on the merits. A perusal of the records precludes this Court from making a categorical declaration on
whether the heirs of Guevara were guilty of laches.

Neither does the affirmative defense of prescription alleged in an answer automatically warrant the dismissal of the complaint under
Rule 16. An allegation of prescription can effectively be used in a motion to dismiss only when the complaint on its face shows that
indeed the action has already prescribed.17 Otherwise, the issue of prescription is one involving evidentiary matters requiring a full-
blown trial on the merits and cannot be determined in a mere motion to dismiss.18 Pineda’s theory that the defense of laches should be
treated as an affirmative defense of prescription warranting the dismissal of the complaint is erroneous.1awphi1.net

There is also no basis in procedural law to treat the RTC’s order of dismissal as a summary judgment. The trial court cannot motu
proprio decide that summary judgment on an action is in order. Under the applicable provisions of Rule 35, the defending party or the
claimant, as the case may be, must invoke the rule on summary judgment by filing a motion.19 The adverse party must be notified of
the motion for summary judgment20 and furnished with supporting affidavits, depositions or admissions before hearing is conducted.21
More importantly, a summary judgment is permitted only if there is no genuine issue as to any material fact and a moving party is
entitled to a judgment as a matter of law.22

Based on the parties’ allegations in the complaint and answer, the issues in the case at bar are far from settled. For instance, both
petitioner and respondents claim their ownership rights over the same property based on two different original certificates of title.
Respondents charge petitioner of illegal occupation while the latter invokes good faith in the acquisition of the property. Clearly, these
are factual matters which can be best ventilated in a full-blown proceeding before the trial court, especially when what are involved
appear to be sizeable parcels of land covered by two certificates of title.
Except for Pineda, the other defendants did not elevate the Court of Appeals’ Decision to this Court. With respect to them, the appellate
court’s Decision has already become final and conclusive, notwithstanding their adoption23 of Pineda’s petition.

WHEREFORE, the instant petition for review on certiorari is DENIED and the Decision and Resolution of the Court of Appeals in CA-
G.R. CV No. 54074 are AFFIRMED. Let the records of the case be remanded for further proceedings to the Regional Trial Court of
Marikina City, which is hereby ORDERED to try and decide the case with deliberate speed.

SO ORDERED.