G.R. No. L-21224. September 27, 1966
REPUBLIC OF THE PHILIPPINES, PLAINTIFF AND APPELLANT, VS. CARMEN PLANAS, ET AL., DEFENDANTS AND APPELLEES.
BARRERA, J.:
has been brought to the attention of this Court. This concerns the tax
on war profits allegedly due from appellee Carmen Planas. The decision
appealed from dismissing the case on the ground that there was no cause
of action or that the same was barred by a former judgment, was based
on a stipulation of facts which establish the following:
On February 2, 1950, appellee Carmen Planas was assessed by
the Collector or Internal Revenue, war profit tax, including
surcharges, in the amount of P81,722.00. After two reinvestigations by
the revenue office, made at the request of the taxpayer, the assessment
was reduced, on May 16, 1951, to P47,847.15. Not satisfied with this
decision of the Collector, the taxpayer brought the case on review,
first to the Secretary of Finance and subsequently, to the Board of Tax
Appeals [1] (BTA Case No.
13), which rendered judgment on May 29, 1952, modifying the decision of
the Collector. The taxpayer elevated the case on appeal to the Supreme
Court (G.R. No. L-5866), wherein, on March 30, 1954, the appeal was
dismissed “without prejudice”, in view of the ruling of the Court
rendered in the case of U.S.T. v. Board of Tax Appeals, [2]
that the decisions of the Board of Tax Appeals are null and void for
lack of judicial authority to decide cases of this nature which come
within the jurisdiction of the regular courts.
On September 9, 1958, the Republic of the Philippines filed
in the newly-created Court of Tax Appeals a motion for execution of the
judgment rendered by the defunct Board of Tax Appeals in BTA Case No.
13. As this motion was granted despite objections of the taxpayer, and
the Court of Tax Appeals ordered the execution of such decision, Carmen
Planas filed a petition for review by certiorari in this Court, which
was docketed as G.R. No. L-15934. On October 31, 1961, this Court
rendered a decision in the case, annulling the disputed order of the
Court of Tax Appeals, on the ground that, having been previously held
in G.R. No. L-5866 (Planas v. Collector of Internal Revenue) that the
decision of the defunct Board of Tax Appeals was null and void, said
decision could not be executed.
On January 6, 1962, the Republic of the Philippines filed Civil Case
No. 49206 in the Court of First Instance of Manila, entitled Republic
of the Philippines versus Carmen Planas, “to enforce the collection of
the same war profits tax in the amount of P83,179.43”. However,
sustaining defendant’s contention that the complaint states no cause of
action and the cause of action, if any, has already prescribed, the
court dismissed the case on April 13, 1962, on the ground of
prescription. The Republic did not appeal from this order of dismissal,
and the same became final.
Then, on July 28, 1962, the Republic of the Philippines instituted
the present action, also in the Court of First Instance of Manila, this
time against Carmen Planas, as principal, and the Alto Surety &
Insurance Co., Inc., as surety (Civil Case No. 51090), alleging:
“2. That in an investigation conducted by agents of
the Bureau of Internal Revenue, it was ascertained that the defendant
Carmen Planas is liable to the Republic of the Philippines in the total
amount of P83,179.43, inclusive of surcharges and interests as of March
31, 1954, representing war profits tax computed as follows:
x x x
“3. That the said amount has been the subject of the
decision of the defunct Board of Tax Appeals in BTA Case No. 13,
entitled ‘Carmen Planas vs. The Collector of Internal Revenue, et al.’,
which affirmed the findings of the Bureau of Internal Revenue;“4.
That as a result of said decision of the defunct Board of Tax Appeals,
defendant Carmen Planas appealed to the Supreme Court in G.R. No.
L-5866;“5. That in order to guarantee the payment of the
aforementioned tax liability, defendants Carmen Planas, as principal,
and Alto Surety & Insurance Co., Inc., as surety, executed Alto
Bond No. IR-7093, dated March 15, 1954, whereby they bound themselves,
jointly and severally to pay the amount of P41,547.45, as war profits
tax plus 15% surcharge amounting to P5,232.12, 1% monthly interest from
March 31, 1947 to March 31, 1954, amounting to P34,899.85, and
compromise of P500.00 for violation of the war profits tax law or a
total of P83,179.43, as of March 31, 1954′, unto the Republic of the
Philippines; x x x;“6. That it is the condition of the bond
that the principal and Surety hereby obligate themselves to pay the
amount of the war profits tax, surcharge, interest and compromise, if
and when the decision of the Supreme Court (in G.R. No. L-5866) will be
adverse to the principal and upon, demand of the Collector of Internal
Revenue’;“7. That on March 30, 1954, the Supreme Court dismissed her appeal;
“8.
That as a result of the dismissal of the appeal by the Supreme Court,
plaintiff, thru the Bureau of Internal Revenue, demanded of the herein
defendants payments of the sum of P41,547.45, exclusive of surcharges,
interests, and compromise penalties;“9. That notwithstanding
repeated demands, defendants failed and refused and still fail and
refuse to pay the said tax liability alleged in paragraph 8 hereof;”
Thus, it was prayed that the surety bond be declared forfeited in
favor of plaintiff, and defendants be ordered, jointly and severally,
to pay the total amount of P83,179.43, representing war profits taxes,
surcharges, compromise penalties and interests as of March 31, 1954,
due from the principal, and to pay the interests that had accrued from
April 1, 1954. Defendants answered the complaint averring (a) the
action was barred by a prior judgment, and (b) assuming that the
complaint is based on the surety bond, plaintiff had no cause of
action. As stated in the beginning of this opinion, the trial court
sustained the contentions of the defendants and dismissed the complaint.
In contesting the correctness of the decision now on appeal, that
the order of dismissal of Civil Case No. 49206 constitutes res judicata
to the present action, appellant claims lack of identity of parties and
of cause of action in the two cases. The first case, Civil Case No.
49206, it is argued, was instituted by the Republic of the Philippines
against Carmen Planas alone, whereas in Civil Case No. 51080, Carmen
Planas and the Alto Surety were named defendants. Also, it is contended
that when a taxpayer posts a bond to guarantee the payment of his tax
liability, he assumes another obligation separate and distinct from his
primary duty to pay the tax. In short, according to appellant, when a
bond is executed, as in this case, the government can avail of two
courses of action, to enforce the tax assessment, viz., by instituting
judicial or summary administrative proceeding against the taxpayer, and
by going against the bond. Appellant, therefore, argues that since
Civil Case No. 49206 was for the enforcement of the taxpayer’s
obligation to pay the tax, whereas Civil Case No. 51080 was for
foreclosure of the bond due to the taxpayer’s failure to comply with
her obligation thereunder, the final order of dismissal, issued in the
former case, does not operate to bar the cause of action in the latter
case. In support of this contention, appellant cites several cases. [3]
Appellant’s argument cannot be sustained. In the case of Republic of
the Philippines v. Araneta, supra., the condition of the bond was as
follows:
“WHEREAS, the Bureau of Internal Revenue has
required the above-bounden Principal (the taxpayer) to pay the amount
of P11,814.00, corresponding to the two (2%) per cent common carrier’s
tax and compensating tax on the aforementioned vessel, FS-158, for the
year 1958;“WHEREAS, the above-bounden Principal has
requested the Collector of Internal Revenue that it be allowed to pay
the above-stated amount of P11,814.00 in six (6) equal monthly
installments, commencing April 15, 1949;“WHEREAS, the
Collector of Internal Revenue is willing to grant the request of the
above-bounden Principal, provided that it files a bond in the amount of
ELEVEN THOUSAND EIGHT HUNDRED FOURTEEN (P11,814.00) PESOS, Philippine
Currency, to guarantee payment of said common carrier’s tax and
compensating tax;“NOW, THEREFORE, the condition of this
obligation is such that if the above-bounden Principal truly and
faithfully make a prompt and complete payment of the 2% common
carrier’s tax and compensating tax due on the above-mentioned vessel
for the year 1948, in six (6) equal monthly installments commencing on
April 15, 1949, as well as all fines and penalties imposed in
accordance with the National Internal Revenue Code, then the obligation
shall be null and void, x x x.”
In the case of Republic v. Xavier Gun Trading, supra., the principal and surety bound themselves to
pay the assessment tax due the Republic of the Philippines from the
principal for the period from 1948-1951, in the sum of P312.70 within
six months from the execution of the bond. This is also true in the
case of Republic v. Dorego, supra, where the principal and the sureties
bound themselves to “pay unto the Republic of the Philippines, the full sum of TWO THOUSAND SIX HUNDRED PESOS (P2,600.00), being the deficiency tax and penalties due the Republic from the principal”, said principal
and sureties promising to pay the tax obligation at the rate of P260.00
monthly, beginning July 16, 1951, until the whole amount is fully paid.
In other words, in all of these cases, there was no question as to the
taxpayer’s liability to pay the tax. The amount thereof has been
determined, the assessment already accepted by the taxpayer. The bonds
were merely posted to guarantee the payment of the tax already due from and acknowledged by
the principals. The obligation of the principals and the sureties to
pay the amounts stated in the surety bonds was absolute and subject to
no condition. Hence, the ruling of this Court that the parties to the
bond assumed an obligation separate and distinct from that to pay the
tax itself which, in effect, was extinguished and substituted by the
bond.
Differently in the present case, the bond recognized in express
terms that there was a pending controversy in the Supreme Court with
respect to the liability of the taxpayer and that in the very words of
the bond, the “Principal and the Surety Company hereby obligate
themselves to pay the amount of war profits tax, surcharge, interest
and compromise, if and when the decision of the Supreme Court will be
adverse to the Principal and upon demand of the Collector of Internal
Revenue.” As heretofore stated, the appeal (G.R. No. L-5866) was
dismissed by the Supreme Court “without prejudice” and without this
Court making a declaration or finding on the liability of herein
appellee Planas for such war profits tax. In fact, as also already
mentioned, this Court, in G.R. No. L-15934, categorically ruled that
the decision of the Board of Tax Appeals finding Planas liable to pay
war profits tax, was null and void. It is clear, therefore, that the
condition of the bond was never fulfilled and the obligation assumed by
the Principal and the Surety did not attach. It was perhaps because of
this resulting situation that the Republic later filed again another
action in the Court of First Instance of Manila (Civil Case No. 49206)
for the collection of the same tax, but which, as heretofore stated,
was dismissed on the ground of prescription, from which the Republic
did not appeal.
From what has been stated, it is clear that the herein appellees did
not assume a separate and different obligation from that of the direct
liability of the taxpayer when they executed the bond herein sued upon.
In fact, the complaint in this case has been filed, admittedly, for the
purpose of enforcing the “collection of the same alleged war profits
tax of defendant Carmen Planas in the amount of P83,179.43”. (No. 19,
Stipulation of Facts). But, as we have seen, the right of the
government to collect those war profits tax, surcharges, penalties, and
interests was already declared to have been lost by prescription, by
final order in Civil Case No. 49206. And yet, this is the very same
purpose for which this Civil Case No. 51080 was instituted. Certainly,
this procedure cannot be allowed under the doctrine of bar by prior
judgment.
The fact that the forms of the two actions, as well as the relief
prayed for may not be the same, does not preclude the operation of the
principle of res judicata, where it clearly appears, as it is in this
case, that the parties are actually litigating the same thing. A party
cannot, by varying the form of action or malting a different
presentation of his case, be allowed to escape the application of the
rule that one and the same cause of action shall not be twice
litigated. [4]
The inclusion of the surety as party defendant in Civil Case No.
51080, where it is not so named in Civil Case No. 49206, cannot be
invoked to nullify the effect on the former case of the dismissal-order
issued in the latter proceeding. It has been ruled that where the one
who is offering a judgment as an estoppel and the party against whom it
is being offered were both parties to the action, in which such
judgment was rendered, it is no objection that the action included some
additional parties who are joined in the second case. [5]
Conversely, the operation of the final judgment or order in a previous
case is not altered by the fact that somebody who was not a party in
that first action has been impleaded in the second case. Otherwise,
litigants can always renew any litigation by the mere expediency of
including new parties. [6]
WHEREFORE, finding no error in the decision appealed from, the same is hereby affirmed, without costs.
SO ORDERED.
Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Bengzon, J.P., Zaldivar, Sanchez, and Ruiz Castro, JJ., concur.
Regala, J., on leave, no part.
[1] Created by Executive Order No. 401-A, and organized on February 7, 1951.
[2] G.R. No. L-5701, June 23, 1953.
[3] Republic of the
Philippines v. Xavier Gun Trading, G.R. No. L-17325, April 26, 1962;
Republic of the Philippines v. Dorego, G.R. No. L-16594, April 26,
1962; Republic of the Philippines v. Araneta, G.R. No. L-14142, May 30,
1961.
[4] Francisco v. Blas,
G.R. No. L-5078, May 4, 1953; Valenzuela v. Court of Appeals, G.R. No.
L-12645, Sept. 15, 1960; Lewin v. Galang, G.R. No. L-15253, Oct. 31,
1960; Ipekdjian Merchandising Co., Inc. v. Court of Tax Appeals, G.R.
No. L-15430, Sept. 30, 1963.
[5] Aquino v. Sanvictores, G.R. No. L-3397, July 27, 1951.
[6] Alsua v. Johnson, 21
Phil. 308; Aquino v. Sanvictores, supra.; Samahang Magsasaka v. Chua
Guan, G.R. No. L-7252, Feb. 25, 1955; Suarez v. Giok Hong Que, G.R. No.
L-7927, Nov. 18, 1955.