REPUBLIC OF THE PHILIPPINES, PETITIONER, VS. JUAN C. TUVERA, VICTOR P. TUVERA AND TWIN PEAKS DEVELOPMENT CORPORATION, RESPONDENTS.

Republic versus Tuvera

The Case

This is a petition brought by the Republic of the Philippines against Juan Tuvera, his son Victor Tuvera, and Twin Peaks Development Corporation. The Republic seeks to recover alleged ill-gotten wealth and damages arising from the grant of a timber license agreement to Twin Peaks during the Marcos administration. The case matters because it tests the proper use of a demurrer to evidence and the correct application of the doctrine of res judicata — the rule that a matter once finally adjudicated may not be litigated again.

Procedural History

The Republic filed a civil complaint for restitution and damages before the Sandiganbayan against Ferdinand Marcos, Juan Tuvera, Victor Tuvera, and Twin Peaks. Trial against the Tuveras proceeded separately. After the Republic rested its case, the Tuveras filed a demurrer to evidence. In a Resolution dated 23 May 2001, the Sandiganbayan sustained the demurrer, relying on the earlier Supreme Court decision in the Ysmael case and holding that res judicata barred the Republic from questioning the validity of the timber license agreement. The Republic then elevated the matter to the Supreme Court by petition for review.

Facts

Twin Peaks Development Corporation was organized in March 1984 to engage in real estate, with Victor Tuvera holding forty-eight percent of its shares. Victor was the son of Juan Tuvera, then Presidential Executive Assistant to President Marcos. Acting on a letter from Twin Peaks' vice president and treasurer, President Marcos awarded Timber License Agreement Number 356 to Twin Peaks, covering twenty-six thousand hectares of forest land with an annual allowable cut of sixty thousand cubic meters and authority to export ten thousand cubic meters of mahogany of the narra species. Twin Peaks then engaged in logging operations.

After President Marcos was ousted in February 1986, President Corazon Aquino established the Presidential Commission on Good Government, tasked with recovering ill-gotten wealth. In June 1988 the Commission issued a Writ of Sequestration over all assets and shares of Twin Peaks, followed by a Mission Order. In December 1988 the Commission, on behalf of the Republic, filed the complaint, alleging that Juan Tuvera used his influence to secure the license despite laws prohibiting the export of narra mahogany and despite Twin Peaks' lack of logging equipment, and that respondents earned about forty-five million pesos. The Republic prayed for reversion or cancellation of the license and forty-eight million pesos in actual damages, plus other damages.

Respondents denied the allegations and raised counterclaims. After protracted proceedings, the Sandiganbayan allowed a separate trial from Marcos. The Republic presented three witnesses and rested its case. Respondents then filed a demurrer to evidence, arguing that the Republic's evidence was insufficient. The Sandiganbayan sustained the demurrer, holding that the validity of the license had already been settled in the Ysmael case and was now barred by res judicata.

Issues

• Whether or not a demurrer to evidence may be granted on the ground of res judicata rather than on the insufficiency of the plaintiff's evidence.
• Whether or not the Sandiganbayan correctly applied the doctrine of res judicata in barring the Republic's action.

Applicable Provisions

Rule 33, Section 1 of the Rules of Court, as discussed in the decision, provides:

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.

This provision governs a demurrer to evidence, which is resolved solely on the basis of the evidence the plaintiff has presented.

Rule 16, Section 1 of the Rules of Court, as cited in the decision, provides:

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.

This provision governs a motion to dismiss based on preliminary objections, which is a different remedy from a demurrer to evidence.

Ruling

On the first issue, the Court held that the Sandiganbayan erred in justifying the demurrer with res judicata. Res judicata is a proper ground for a motion to dismiss, not for a demurrer to evidence. A demurrer may be granted only if, after the presentation of the plaintiff's evidence, it appears upon the facts and the law that the plaintiff has shown no right to relief. The Court explained that res judicata presents itself even before the presentation of evidence, and should be invoked at that stage. Properly speaking, a movant for demurral who wishes to rely on a settled case should invoke the ground of stare decisis — the rule that settled precedents should be followed — instead of res judicata.

On the second issue, the Court held that res judicata did not apply. For res judicata to serve as an absolute bar, the following requisites must concur: the former judgment must be final; it must be on the merits; it must have been rendered by a court having jurisdiction over the subject matter and parties; and there must be identity of parties, of subject matter, and of causes of action between the first and second actions. The Court found no identity of parties between the Ysmael case and the present action, since the present case was initiated by the Republic through the Office of the Solicitor General. Hence, the Sandiganbayan's reliance on res judicata was misplaced.

Doctrine

A demurrer to evidence under Rule 33 is resolved solely on the basis of the evidence the plaintiff has presented, and may be granted only if upon the facts and the law the plaintiff has shown no right to relief. Res judicata is not a proper ground for a demurrer to evidence; it is a ground for a motion to dismiss, and a party relying on a settled precedent in a demurrer should invoke stare decisis instead. For res judicata to bar a subsequent action, there must be identity of parties, of subject matter, and of causes of action, among the other requisites.

Disposition

The Supreme Court granted the petition, set aside the Sandiganbayan's Resolution sustaining the demurrer, and remanded the case for further proceedings.

Remember This

Memorize this line: res judicata is a ground for a motion to dismiss, not for a demurrer to evidence, and a demurrer is resolved only on the plaintiff's evidence. Examiners use this case to test the distinction between a motion to dismiss and a demurrer to evidence, and the requisites of res judicata.