Case Digest (G.R. No. 45843)
Facts:
Reynaldo Labayen and Teodoro Labayen v. Talisay-Silay Milling Co., G.R. No. 45843, June 30, 1939, the Supreme Court En Banc, Imperial, J., writing for the Court. The plaintiffs, brothers Reynaldo and Teodoro Labayen, sued the Talisay-Silay Milling Co. after the Court of First Instance of Occidental Negros sustained a demurrer to their amended complaint (order dated June 12, 1937) and gave them ten days to amend, with notice that failure to do so would result in dismissal with costs. The present appeal challenges that order.The background begins with the Labayens’ ownership of the hacienda known as Dos Hermanos (lots Nos. 1229 and 1327 of the Talisay cadastre). Under a milling contract entered into with the Talisay-Silay Milling Co., the central agreed, among other obligations, to construct and operate a railroad to serve planters, receive and transport properly prepared cane free of charge, and to mill and extract sugar at guaranteed averages; the planters agreed to deliver all cane from their lands for a thirty-year period. Pursuant to the agreement the plaintiffs planted cane in the 1920–1921 and 1921–1922 crop years expecting milling by the central.
When the central did not construct the promised railway to a convenient point on Dos Hermanos, the plaintiffs alleged that their cane could not be delivered and milled, causing them loss; they sued in Civil Case No. 3789 before the Court of First Instance. The trial court ruled for the defendant and, on its counterclaim, awarded the defendant P12,114 against the plaintiffs. The plaintiffs appealed (reported here as Labayen v. Talisay-Silay Milling Co., G.R. No. 29298, 52 Phil. 440), and this Court affirmed that judgment. Execution on the judgment led to foreclosure of the mortgage on Dos Hermanos and a sheriff’s sale under which the defendant became the adjudicated purchaser.
After acquiring title, the defendant constructed the railway that it had earlier contended was materially impossible to build because of the hacienda’s curves and grades. The plaintiffs then filed an amended complaint alleging two causes of action: (1) that the earlier judgments were obtained by fraud — specifically by perjured testimony that the railway could not be constructed — and seeking annulment of the prior judgments, damages (P70,000) and return of the hacienda (subject to payment of any indebtedness); and (2) that by false representations the defendant procured a loan secured by mortgage on Dos Hermanos and, after the mortgage was discharged, refused to pay a promised bonus to the plaintiffs. The defendant demurred to the amended complaint, asserting that the first cause was barred by res judicata and that the second cause failed to state a cause of action.
The Court of First Instance sustained the demurre...(Subscriber-Only)
Issues:
- Was the first cause of action, which seeks annulment of prior judgments on the ground of alleged perjury and fraud, barred by res judicata or otherwise insufficient to annul the earlier judgments?
- Did the second cause of action, alleging that the defendant procured a mortgage and later refused to pay a promised bonus, state a sufficient cause of action or was the demurrer properly s...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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