G.R. No. 181369 - Tala Realty Services Corp., Inc. vs. Banco Filipino Savings and Mortgage Bank

On September 5, 1995, Banco Filipino Savings & Mortgage Bank ("Banco Filipino") filed a complaint with the Regional Trial Court (RTC) of Manila against Tala Realty Services Corporation, Inc. ("Tala Realty") and several individual petitioners.
The complaint was one among seventeen reconveyance cases instituted by Banco Filipino against Tala Realty concerning various real properties across the Philippines.
Central to the complaint was a trust agreement, which was essentially a sale and lease-back arrangement:

Banco Filipino sold various properties, including the disputed property in Sta. Cruz, Manila, to Tala Realty.
Concurrently, Tala Realty leased the same property back to Banco Filipino for a 20-year term, renewable for another 20 years at Banco Filipino’s option.

Banco Filipino admitted that the trust agreement was devised to allow greater flexibility in opening branches and to help the bank acquire new branch sites while staying within the 50% capital asset threshold mandated by the General Banking Act.

In August 1992, Tala Realty claimed the disputed property for itself and threatened to eject Banco Filipino, thereby sparking the reconveyance action.
In response to these developments, petitioners moved to dismiss the complaint based on several grounds:

The RTC initially denied the motion to dismiss but later reversed its position by ordering:

Dismissal of the complaint as it pertained to the petitioners other than Tala Realty.
Suspension of the proceedings in view of the pending decision in G.R. No. 137533.

The CA held that the RTC should have hypothetically admitted the truth of all factual allegations in the complaint, including the validity of the trust agreement, when ruling on the motion to dismiss.
It further ruled that suspending the proceedings was unnecessary because the matter in G.R. No. 137533, which arose from an ejectment suit, was distinct from the present reconveyance action.

Petitioners then argued, on appeal under Rule 45, that Banco Filipino’s reconveyance action was barred:

By the doctrine of stare decisis and the conclusiveness of judgment, referencing the en banc decision in G.R. No. 137533 and subsequent consolidated decisions.
On the ground that Banco Filipino had availed itself of the incorrect remedy by filing a petition for certiorari with the CA instead of an ordinary appeal.

It had utilized the proper mode of review.
The decision in G.R. No. 137533 could not apply since that case involved an ejectment suit—a different action from the present reconveyance case.

Whether Banco Filipino’s reconveyance complaint based on the trust agreement is precluded by:

The doctrine of stare decisis, which mandates adherence to established judicial precedents.
The doctrine of conclusiveness of judgment (collateral estoppel), which bars the re-litigation of issues that have already been finally settled.

Whether the trust agreement, previously declared void in G.R. No. 137533 and subsequent consolidated decisions, can be enforced in the present reconveyance proceedings.
Whether Banco Filipino’s choice of remedy (petition for certiorari with the Court of Appeals) was appropriate given the nature of the dispute.