Manalo vs. Court of Appeals

A prior dismissal that adjudicates the rights and liabilities of the parties on the disclosed facts constitutes a judgment on the merits for purposes of res judicata, even if it also cites procedural grounds such as failure to exhaust administrative remedies. Where the requisites of res judicata — finality, judgment on the merits, jurisdiction, and identity of parties, subject matter, and causes of action — are all present, a subsequent action on the same subject matter is barred.

Batas Pambansa Blg. 412, enacted on June 10, 1983, converted the Cebu School of Arts and Trade into the Cebu State College of Science and Technology (CSCST), with an extension system comprising several satellite schools including the Abellana National School in Cebu City. On May 26, 1988, Congress enacted Republic Act No. 6655, the "Free Public Secondary Education Act of 1988," vesting in the Department of Education, Culture and Sports (DECS) the establishment, administration, supervision, and control of all public secondary schools. Section 7 of RA 6655 mandated the nationalization and transfer of public secondary schools to DECS, while Section 11 contained a repealing clause declaring all inconsistent laws deemed repealed or modified. On January 16, 1989, DECS Secretary Lourdes R. Quisumbing issued DECS Order No. 5, Series 1989, setting forth implementation guidelines for Section 7. These statutory and regulatory measures generated repeated litigation among CSCST faculty and personnel contesting the transfer of the secondary education program.

On June 10, 1983, Congress enacted Batas Pambansa Blg. 412, converting the Cebu School of Arts and Trade into the Cebu State College of Science and Technology (CSCST), with an extension system that included several satellite schools such as the Abellana National School in Cebu City, the Danao Vocational School, the Tuburan Vocational School, and various schools of fisheries across Cebu province. Section 3 of BP 412 authorized CSCST to offer courses in higher technological education leading to degrees in engineering, forestry, fishery, nautical science, and other fields, in addition to its existing curricular offerings including a four-year secondary trade curriculum.

On May 26, 1988, Congress enacted Republic Act No. 6655, the "Free Public Secondary Education Act of 1988," vesting in the Department of Education, Culture and Sports (DECS) the establishment, renaming, conversion, integration, separation, administration, supervision, and control of all public secondary schools and public secondary teachers. Section 7 mandated the nationalization of public secondary schools and their transfer to DECS, while Section 11 contained a repealing clause declaring that all laws or parts thereof inconsistent with RA 6655 shall be deemed repealed or modified. On January 16, 1989, DECS Secretary Lourdes R. Quisumbing issued DECS Order No. 5, Series 1989, setting forth implementation guidelines for Section 7.

The implementation of RA 6655 provoked a series of lawsuits by CSCST faculty and personnel. Romeo Reyes filed the first complaint in RTC Branch 24, Cebu City (Civil Case No. CEB-7790), seeking to enjoin enforcement of DECS Order No. 5 and to declare it ultra vires; the court dismissed the complaint on July 20, 1992, finding that Reyes lacked personality to sue and that RA 6655's repealing clause effectively superseded inconsistent provisions of BP 412. Jesus Bonilla and other CSCST superintendents filed a second petition in RTC Branch 19 (Civil Case No. CEB-9594), arguing that RA 6655, as a general law, could not supersede BP 412, a special law; the court dismissed the petition on June 3, 1991, holding that the repealing clause in Section 11 of RA 6655 manifested clear legislative intent to repeal prior inconsistent laws regardless of their special character.

On February 14, 1992, DECS Regional Director Eladio C. Dioko and CSCST President Atanacio Elma entered into a Memorandum of Agreement (MOA) providing for the transfer of the secondary education program of the Abellana College of Arts and Trade (ACAT) and its personnel and facilities to DECS, along with the gradual phasing out or integration of college offerings into the main campus beginning school year 1992-1993. The MOA was conceived on the basis of Section 7 of RA 6655. Bienvenido Abucay and other CSCST faculty members filed a third petition in RTC Branch 10 (Civil Case No. CEB-11735), seeking to nullify the MOA and alleging that it had no legal or factual basis and violated their security of tenure; the court dismissed the petition on December 9, 1992, ruling on the merits that the MOA had legal and factual basis as an implementation of RA 6655, that RA 6655's repealing clause effectively repealed inconsistent provisions of BP 412, that the phasing-out clause was a legitimate administrative management decision, and that petitioners had failed to exhaust administrative remedies.

On February 4, 1993, Norma Manalo and other faculty members, registrar, librarian, janitor, and other personnel of CSCST filed a fourth complaint in RTC Branch 22, Cebu City (Civil Case No. CEB-13562), seeking declaration of nullity of the same MOA with preliminary injunction. Respondent Marcelo M. Bacalso moved to dismiss on the ground of res judicata, asserting that the case repeated the same issue already decided three times by the RTC of Cebu. The trial court dismissed the case on May 31, 1993, finding that the case was an "outcrop of the same essential root and issue" already litigated, that RA 6655 enjoyed the constitutional presumption of validity, and that the constitutionality of a law could not be subject to collateral attack. The motion for reconsideration was denied on August 10, 1993. Petitioners appealed to the Court of Appeals, which affirmed the dismissal on February 21, 1996. The Supreme Court gave due course to the petition on August 23, 1999.

• Res Judicata Inapplicable: Petitioners contended that the order of dismissal in Civil Case No. CEB-11735 did not constitute res judicata because it was not an adjudication on the merits, having dismissed the complaint for failure to state a cause of action, failure to exhaust administrative remedies, and lack of jurisdiction.
• Unconstitutionality of RA 6655: Petitioners argued that if BP 412 were construed to have been repealed or amended by RA 6655, the latter would be unconstitutional for being repugnant to, or subverting, the policy announced in Section 9(1) of Article XV of the 1973 Constitution.

• Res Judicata: Respondent insisted that the case repeated the very same issue already decided three times by the Regional Trial Court of Cebu, and that the appeal to the Supreme Court from one of those decisions had been dismissed with finality.

• Res Judicata: Whether the case is barred by res judicata by virtue of the prior dismissal in Civil Case No. CEB-11735.

• Res Judicata: Yes. All four requisites of res judicata were present: the prior order was final, it was a judgment on the merits, it was rendered by a court with jurisdiction over the subject matter and parties, and there was identity of parties, subject matter, and causes of action between the first and second actions.

• Res Judicata: The Court applied the established four-part test for res judicata: (a) the former judgment must be final; (b) it must be a judgment on the merits; (c) it must have been rendered by a court with jurisdiction over the subject matter and parties; and (d) there must be identity of parties, subject matter, and causes of action. The parties in Civil Case No. CEB-11735 and Civil Case No. CEB-13562 were faculty members and personnel of CSCST representing the same interest — the nullity of the MOA. The appellate court found substantial identity in the cause of action and relief sought. Petitioners' contention that the order in CEB-11735 was not a judgment on the merits was rejected: a judgment is on the merits when it determines the rights and liabilities of the parties based on the disclosed facts, irrespective of formal, technical, or dilatory objections, and a trial is not necessary. The order in CEB-11735 ruled on the substantive issues — the validity of the MOA, the effect of RA 6655's repealing clause on BP 412, the legitimacy of the phasing-out provision, and the authority of the CSCST President to sign the MOA — and was therefore conclusive on the validity of the MOA, barring a subsequent action on the same subject matter. Allowing re-litigation would result in the re-litigation of the same cause involving the same issues, parties, and subject matter, contrary to the principle that there must be an end to litigation.

• Res Judicata — A matter adjudged; a thing judicially acted upon or decided; a thing or matter settled by judgment. The judgment in the first action is conclusive as to every matter offered and received therein, as to any other admissible matter which might have been offered for that purpose, and all other matters that could have been adjudged therein. Its requisites are: (a) the former judgment or order must be final; (b) the judgment or order must be one on the merits; (c) it must have been rendered by a court having jurisdiction over the subject matter and parties; (d) there must be between the first and second actions, identity of parties, of subject matter, and of causes of action. The Court found all four requisites present, as the parties in both cases were CSCST faculty and personnel representing the same interest in nullifying the MOA, with substantial identity in the cause of action and relief sought.

• Judgment on the Merits — A judgment is on the merits when it determines the rights and liabilities of the parties based on the disclosed facts, irrespective of formal, technical, or dilatory objections. It is not necessary that there be a trial. The Court applied this doctrine to hold that the order in CEB-11735 — which ruled on the validity of the MOA, the effect of RA 6655's repealing clause, and the authority of the CSCST President — constituted a judgment on the merits despite its additional citation of failure to exhaust administrative remedies.

• Statutory Repeal — General vs. Special Law — As a rule, a later general law cannot repeal an earlier special law (generalia specialibus non derogant). However, when the later general law contains a repealing clause indicating clear legislative intent to repeal all prior inconsistent laws on the subject matter, the rule no longer applies. Section 11 of RA 6655 contained such a repealing clause, categorically declaring that all laws inconsistent with RA 6655 shall be deemed repealed or modified, thereby repealing inconsistent provisions of BP 412.

• "A judgment is on the merits when it determined the rights and liabilities of the parties based on the disclosed facts, irrespective of formal, technical or dilatory objections. It is not necessary, however, that there be a trial." — This passage defines the controlling standard for determining whether a dismissal constitutes a judgment on the merits for res judicata purposes, resolving the petitioners' central argument that the prior dismissal was merely procedural.

• "Under the principle of res judicata, the Court and the parties are bound by such final decision, otherwise, there will be no end to litigation. It is to the interest of the public that there should be an end to litigation by the parties over a subject fully and fairly adjudicated, and an individual should not be vexed twice for the same cause." — This articulates the public-policy rationale underlying res judicata, emphasizing finality of adjudication and protection against vexatious re-litigation.

• "Sec. 11 of RA No. 6655 contains a repealing clause, categorically declaring that all laws or parts thereof inconsistent with any provision of RA No. 6655 shall be deemed repealed. A fortiori, any provision of BP Blg. 412 which is inconsistent and irreconcilable with RA No. 6655, specifically Sec. 7 thereof, is deemed repealed or modified." — This passage, drawn from the prior order in CEB-11735 and quoted by the Supreme Court, states the ratio on statutory repeal that the Court found conclusive under res judicata.

• Mirpuri vs. Court of Appeals, 318 SCRA 516 (1999) — Cited as authority for the definition and requisites of res judicata, providing the four-element test applied by the Court.
• Mendiola vs. Court of Appeals, 327 Phil. 1156 (1996) — Cited for the proposition that a judgment on the merits is one that determines the rights and liabilities of the parties based on disclosed facts, irrespective of formal or technical objections, and that a trial is not necessary.
• Quinsay vs. Court of Appeals, G.R. No. 127058, August 31, 2000 — Cited for the principle that where a litigant sues the same party for the alleged violation of the same right and enforcement of the same relief, the defense of litis pendentia in one case bars the other, and a final judgment in one constitutes res judicata causing dismissal of the rest.
• Calusin vs. Court of Appeals, G.R. No. 128405, June 21, 2000 — Cited for the public-policy rationale of res judicata: that there should be an end to litigation and an individual should not be vexed twice for the same cause.

• Section 7, Republic Act No. 6655 (Free Public Secondary Education Act of 1988) — Mandated the nationalization of public secondary schools and their transfer to DECS. The Court found this provision, as implemented through the MOA, to be valid and enforceable.
• Section 11, Republic Act No. 6655 — Contained the repealing clause declaring that all laws or parts thereof inconsistent with RA 6655 shall be deemed repealed or modified. The Court relied on this clause to uphold the repeal of inconsistent provisions of BP 412.
• Section 3, Batas Pambansa Blg. 412 — Defined the curricular offerings of CSCST, including a four-year secondary trade curriculum. The Court found provisions of BP 412 inconsistent with RA 6655 to have been repealed or modified by virtue of RA 6655's repealing clause.
• Section 6, Batas Pambansa Blg. 412 — Enumerated the powers and duties of the CSCST Board of Trustees. The prior order in CEB-11735 found that this section did not require Board authorization as a condition sine qua non before the CSCST President could sign an agreement complying with DECS Orders.

Davide, Jr., Puno, Santiago-Kapunan, and Ynares-Santiago, JJ., concurred.