MARTA MENDOZA AND HILARIO NONATO, PETITIONERS, VS. FELISA DIAZ AND DAVID LIWANAG, RESPONDENTS.

Mendoza versus Diaz

The Case

This is a civil action for the collection of unpaid rentals, the return of possession of several parcels of land, the cancellation of tax declarations, and the annulment of certain sales. Felisa Diaz, joined by her second husband David Liwanag, sued the spouses Marta Mendoza and Hilario Nonato, together with the buyers to whom those spouses had sold portions of the land. The case matters because it shows how the Supreme Court treats findings already made in an earlier appeal, and how a party's own admissions in the pleadings can close the door on defenses raised much later.

Procedural History

The dispute began in the Justice of the Peace Court of Pasig, Rizal, where Felisa Diaz sued for rentals and cancellation of the lease and won. On appeal, the Court of First Instance dismissed the suit on the ground that the inferior court had no jurisdiction, but that dismissal was itself appealed and was never finally decided because the records were lost during the battle of liberation.

Felisa Diaz then filed the present action in the Court of First Instance of Rizal. After trial, that court dismissed the complaint and ordered the plaintiffs to pay the spouses four thousand pesos and nine hundred pesos for taxes. The plaintiffs appealed to the Court of Appeals, which found that the nine parcels in the spouses' affidavit were exactly the same parcels leased to Santos Solapco, rejected the defense of prescription, and remanded the case for a new trial to fix the true value of the recovered lot and the annual rentals from 1940 to 1954.

After the new trial, the Court of First Instance rendered judgment for the plaintiffs, later amended to include a tenth parcel. The spouses appealed again to the Court of Appeals, which affirmed the trial court's judgment with costs. The spouses then appealed to the Supreme Court, which decided the case in September 1966.

Facts

In the settlement of the estate of Felix Enriquez, his widow Felisa Diaz received seventeen parcels of land in usufruct. In May 1933 she exchanged properties with Santos Solapco, an heir of the decedent, acquiring usufruct over one half of three parcels and over all of a fourth. In June 1933 she leased to Solapco almost all of her seventeen parcels together with those she had just acquired in usufruct.

In November 1933 the Roman Catholic Archbishop of Manila recovered from Solapco a lot that Solapco had obtained in the exchange, and Felisa was held liable to Solapco for its value, four thousand pesos. Solapco died in 1934. His widow Marta Mendoza continued the lease, and she later married Hilario Nonato.

After the war, in August 1946, the spouses executed an affidavit declaring themselves the true and exclusive owners of nine parcels and obtained new tax declarations in their names. They later sold one lot to the spouses Antonia Manalo and Basilio Unsay, and five parcels to the sisters Asuncion and Margarita Tuason. Felisa Diaz then sued in September 1954 for rentals, recovery of possession, cancellation of the tax declarations, and annulment of the sales.

Issues

• Whether or not the parcels described in the complaint are the same parcels over which Felisa Diaz held a usufruct and which she leased to Santos Solapco.
• Whether or not the defense of prescription may still be raised in the second appeal.
• Whether or not the plaintiffs should pay the spouses four thousand nine hundred pesos.

Applicable Provisions

The decision does not quote any statutory provision. It rests on the procedural rule of the law of the case and on the rule that judicial admissions bind the party who makes them, applied to the following allegation of the amended complaint, which the spouses admitted in their answer:

That all the above described properties formed parts of the original seventeen (17) parcels of land constituting this plaintiff's usufruct, and that the first eight in the list given above were among the parcels of land leased to Santos Solapco, deceased husband of defendant Marta Mendoza, in accordance with a contract of lease executed on June 15, 1933, copy of which is hereto attached and made part hereof as Annex 'A'.

This admission established the identity of the lots and removed that question from dispute.

Ruling

On the first issue, the Court held that the identity of the parcels had already been passed upon and resolved in the first appeal to the Court of Appeals, which found that the properties leased to Solapco were exactly the same as those in the spouses' affidavit. This is already the law of the case and cannot be re-litigated in the second appeal. Independently, the spouses had admitted the allegation quoted above in their answer, and had thereby admitted the identity of the lots.

On the second issue, the Court held that prescription had likewise been resolved in the first appeal and could not be raised anew. The remand had been ordered precisely to determine the annual rentals and the true value of the recovered lot, in order to implement the finding that the right to recover the rentals had not prescribed.

On the third issue, the Court held that the four thousand nine hundred pesos represents the four thousand pesos owed to Solapco and nine hundred pesos for taxes he paid, and that this amount had already been deducted by the trial court from the rentals due. The plaintiffs should not pay the same debt twice.

Doctrine

A question finally determined in an earlier appeal in the same case becomes the law of the case and may not be relitigated in a later appeal. A fact admitted in a party's answer is a judicial admission that binds that party and dispenses with further proof. And a debtor may not be compelled to pay the same obligation twice.

Disposition

The Supreme Court affirmed the decision of the Court of Appeals, with costs against the spouses Marta Mendoza and Hilario Nonato.

Remember This

Memorize this line: what the Court of Appeals has settled in a first appeal is the law of the case and cannot be reopened in a second appeal. Examiners use this case to test the law of the case and judicial admissions in the pleadings.