Case Digest (G.R. No. 24930)
Facts:
Petitioners Tan Pho and Tan U, as lessees, claimed that Zacarias Lichauco, who had been placed under guardianship, entered on July 7, 1913 into a preliminary arrangement, and that on October 14, 1913 his then guardian executed a twenty-year lease (Exhibit B) and a clarifying agreement (Exhibit C) for land in Manila, with judicial endorsements allegedly placed on the documents but without a court order approving the lease being entered of record. After a subsequent guardian instituted proceedings to declare the lease void for lack of judicial approval, the Supreme Court, in a prior case involving the same parties and subject-matter, declared the lease null and void as to Zacarias Lichauco for want of execution, with retroactive effects from September 17, 1920 (the filing of the complaint for nullity).
After the prior final judgment, petitioners sought in April 1925 the grant of the former guardian’s October 15, 1913 motion for court approval of Exhibits B and C, and requested that the lease be judicially approved as of that earlier date. The lower court granted the petition, effectively affirming and ratifying the lease, and Amparo Nable Jose, as guardian, appealed.
Issues:
- Whether the lower court erred in holding that the filing of the 1920 complaint seeking nullity did not withdraw or repudiate the October 15, 1913 motion for approval of the lease.
- Whether the lower court erred in granting judicial approval to Exhibits B and C notwithstanding the Supreme Court’s final ruling declaring the lease void for want of execution.
Ruling:
The Supreme Court held that the real question was the legal effect of its prior decision declaring the lease null and void, and it ruled that the 1920 nullity action necessarily set aside the earlier motion’s legal force. It further held that after a final decree declaring the lease void, the power to approve the lease based on the October 15, 1913 petition ceased to exist.
Accordingly, the Supreme Court reversed the lower court’s judgment and ordered costs in favor of the appellant.
Ratio:
The Court reasoned that the original controversy in the prior case concerned the validity of the same lease, and that the lease was adjudged void as of September 17, 1920 because the required judicial approval had not been obtained in time or properly. Thus, when the Supreme Court rendered its final decree, it revoked and rescinded the October 15, 1913 motion, leaving nothing legally before the trial court upon which it could grant approval after the final judgment.
The Court rejected petitioners’ attempt to avoid the effect of res judicata, emphasizing that no case was cited (and none was found) supporting the proposition that a lower court may validate a lease after the Supreme Court has already finally declared it void for lack of judicial approval required by Section 307 of the Code of Civil Procedure.
Doctrine:
- A lease of real property executed by a guardian on behalf of an incapacitated person requires the requisite court approval, and the absence of such approval renders the lease void as adjudged.
- A final Supreme Court judgment declaring the lease void for want of execution operates to revoke the legal efficacy of a pending or earlier motion for approval relied upon for validation after final adjudication.
- Under Section 307 of the Code of Civil Procedure, *res judicata* binds parties and matters actually adjudged or necessarily included in the former judgment, even if a party claims a “new legal situation” based on later events that are not sufficient to reopen the same validity issue already finally resolved.