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ENRICO S. EULOGIO v. PATERNO C. BELL

FACTS:

The case involves a Petition for Review on Certiorari assailing the Court of Appeals (CA) Decision and Resolution which granted the Petition for Certiorari filed by respondents and enjoined the execution sale of their family home for the satisfaction of the money judgment awarded to petitioners in Civil Case No. 4581.

Respondents, who are the unmarried children of respondent Spouses Paterno C. Bell and Rogelia Calingasan-Bell, lodged a Complaint seeking the annulment of the contract of sale executed by their parents and the cancellation of the title obtained by petitioners.

The RTC ruled in favor of respondents, declaring the sale as an equitable mortgage and granting the annulment of the deed. The RTC also declared the house and lot as the family home of the respondents and ordered the cancellation of the title in the name of petitioners. Both parties appealed to the CA, but the trial court's decision was affirmed en toto.

Respondents' property was later levied on execution, but the writ of execution was lifted upon motion by respondents. Petitioners filed a Motion for Reconsideration, arguing that the current market value of the property exceeded the statutory limit for a family home.

The RTC set the case for hearing to determine the present value of the family home, but respondents sought reconsideration and asked the court to cite petitioners for contempt due to forum-shopping. The RTC denied respondents' motion and directed the valuation of the property.

Respondents then filed a Petition for Certiorari and Injunction before the CA, which eventually enjoined the execution sale. The CA ruled that there was no forum-shopping, but found that the trial court committed grave abuse of discretion in ordering the execution sale of the family home, as its present value exceeded the statutory limit.

The issues raised in the case include whether petitioners are guilty of forum-shopping, whether a hearing to determine the value of the family home is barred by res judicata, and whether the family home can be sold on execution.

ISSUES:

  1. Whether petitioners are guilty of forum shopping.

  2. Whether the re-litigation of the present value of the property in the execution proceedings is barred by res judicata.

  3. Whether or not a family home could be the subject of an execution sale.

  4. Whether the causes of action in the main proceedings and in the execution proceedings are identical.

  5. Whether or not the family home is exempt from execution, forced sale, or attachment.

  6. Whether or not the subsequent improvement or enlargement of the family home affects its exemption.

RULING:

  1. Petitioners are not guilty of forum shopping. Forum shopping can be committed in three ways: (1) by filing multiple cases based on the same cause of action and with the same prayer, the previous case not having been resolved yet; (2) by filing multiple cases based on the same cause of action and with the same prayer, the previous case having been finally resolved; and (3) by filing multiple cases based on the same cause of action but with different prayers, or by splitting of causes of action. The essence of forum shopping is the filing of multiple suits involving the same parties for the same cause of action, either simultaneously or successively, for the purpose of obtaining a favorable judgment through means other than by appeal or certiorari.

  2. The re-litigation of the present value of the property in the execution proceedings is barred by res judicata. Res judicata is a fundamental principle of law that precludes parties from re-litigating issues actually litigated and determined by a prior and final judgment. There are two aspects of res judicata: bar by prior judgment and conclusiveness of judgment. There is "bar by prior judgment" when there is an identity of parties, subject matter, and causes of action between the first case and the second case. On the other hand, there is "conclusiveness of judgment" when there is an identity of parties between the first and second cases, but no identity of causes of action. In this case, the trial court's final decision in Civil Case No. 4581 bars petitioners' move to have the property in dispute levied on execution.

  3. The family home cannot be the subject of an execution sale. The Court held that the property in dispute, which is acknowledged as a family home, is exempt from execution under Article 160 of the Family Code.

  4. The causes of action in the main proceedings and in the execution proceedings are identical. The Court applied the test to determine whether causes of action are identical, and found that the same evidence and facts essential to both actions were used by the parties. Thus, the judgment in the main proceedings bars the subsequent action under the principle of res judicata.

  5. The family home is exempt from execution, forced sale, or attachment, subject to certain limitations. The exemption is limited to P300,000 in urban areas and P200,000 in rural areas, unless adjusted by law. The present value of the exemption may be based on the most favorable value to the constitution of a family home.

  6. Any subsequent improvement or enlargement of the family home will still be exempt, provided that: (a) the value of the property at the time of its constitution is below the statutory limit, and (b) the improvement or enlargement does not result in an increase in value exceeding the statutory limit. Any amount above the statutory limit can be applied to the obligations specified in Articles 155 and 160.

PRINCIPLES:

  • Forum shopping involves the filing of multiple suits involving the same parties for the same cause of action, either simultaneously or successively, for the purpose of obtaining a favorable judgment through means other than by appeal or certiorari.

  • The essence of forum shopping does not apply to cases that arise from an initiatory or original action that has been elevated by way of appeal or certiorari to higher or appellate courts or authorities.

  • Res judicata refers to a fundamental principle of law that precludes parties from re-litigating issues actually litigated and determined by a prior and final judgment.

  • Bar by prior judgment occurs when there is an identity of parties, subject matter, and causes of action between the first case and the second case.

  • Conclusiveness of judgment occurs when there is an identity of parties between the first and second cases, but no identity of causes of action.

  • The same evidence and facts essential to the maintenance of two actions indicate identity of causes of action.

  • Res judicata applies when the parties are litigating over the same property and when the same contentions and evidence have already been used in the main proceedings.

  • The family home is exempt from execution under Article 160 of the Family Code.

  • The family home is exempt from execution as provided in Article 153 of the Family Code.

  • The family home is a real right that is gratuitous, inalienable, and free from attachment.

  • The protection of the family home is a great controlling purpose and policy of the Constitution.

  • The exemption of the family home is limited to the particular kind of property or specific articles prescribed by the statute.

  • Article 155 of the Family Code specifies the exceptions to the exemption of the family home.

  • Article 160 of the Family Code provides for the procedure when the actual value of the family home exceeds the maximum amount allowed by law.

  • Article 157 of the Family Code sets the maximum value of the family home at the time of its constitution.

  • The value of the family home exempted from execution shall be determined at the time of its constitution and shall not exceed the maximum amount fixed by law.

  • The value most favorable for the constitution of a family home shall be the basis of evaluation if the value of the currency changes.

  • The exemption of the family home from execution does not include the intent to enable debtors to avoid paying their creditors.

  • Those asserting the protection of an exception from an exemption must clearly meet the terms of the exception and satisfy any statutory requirement for its enforcement.

  • Grave abuse of discretion occurs when one acts in a capricious, whimsical, arbitrary, or despotic manner in the exercise of judgment.