STARE DECISIS

Principle of Stare Decisis

The principle of stare decisis enjoins adherence by lower courts to doctrinal rules established by this
Court in its final decisions. It is based on the principle that once a question of law has been examined
and decided, it should be deemed settled and closed to further argument. Basically, it is a bar to any
attempt to relitigate the same issues, necessary for two simple reasons: economy and stability. In
our jurisdiction, the principle is entrenched in Article 8 of the Civil Code.

This doctrine of adherence to precedents or stare decisis was applied by the English courts and was
later adopted by the United States. Associate Justice (now Chief Justice) Reynato S. Puno’s
discussion on the historical development of this legal principle in his dissenting opinion in Lambino v.
Commission on Elections is enlightening:

The latin phrase stare decisis et non quieta movere means “stand by the thing and do not disturb the
calm.” The doctrine started with the English Courts. Blackstone observed that at the beginning of
the 18th century, “it is an established rule to abide by former precedents where the same points
come again in litigation.” As the rule evolved, early limits to its application were recognized: (1) it
would not be followed if it were “plainly unreasonable”; (2) where courts of equal authority
developed conflicting decisions; and, (3) the binding force of the decision was the “actual principle
or principles necessary for the decision; not the words or reasoning used to reach the decision.”

The doctrine migrated to theUnited States. It was recognized by the framers of the U.S. Constitution.
According toHamilton, “strict rules and precedents” are necessary to prevent “arbitrary discretion in
the courts.”Madisonagreed but stressed that “x x x once the precedent ventures into the realm of
altering or repealing the law, it should be rejected.” Prof. Consovoy well noted that Hamilton and
Madison “disagree about the countervailing policy considerations that would allow a judge to
abandon a precedent.” He added that their ideas “reveal a deep internal conflict between the
concreteness required by the rule of law and the flexibility demanded in error correction. It is this
internal conflict that the Supreme Court has attempted to deal with for over two centuries.”

Indeed, two centuries of American case law will confirm Prof. Consovoy’s observation although stare
decisis developed its own life in the United States. Two strains of stare decisis have been isolated by
legal scholars. The first, known as vertical stare decisisdeals with the duty of lower courts to apply
the decisions of the higher courts to cases involving the same facts. The second, known
as horizontal stare decisis requires that high courts must follow its own precedents. Prof. Consovoy
correctly observes that verticalstare decisis has been viewed as an obligation, while horizontal stare
decisis, has been viewed as a policy, imposing choice but not a command. Indeed, stare decisis is not
one of the precepts set in stone in our Constitution.

It is also instructive to distinguish the two kinds of horizontal stare decisis — constitutionalstare
decisis and statutory stare decisis. Constitutional stare decisis involves judicial interpretations of the
Constitution while statutory stare decisis involves interpretations of statutes. The distinction is
important for courts enjoy more flexibility in refusing to apply stare decisis in constitutional
litigations. Justice Brandeis’ view on the binding effect of the doctrine in constitutional litigations still
holds sway today. In soothing prose, Brandeis stated: “Stare decisis is not . . . a universal and
inexorable command. The rule of stare decisis is not inflexible. Whether it shall be followed or
departed from, is a question entirely within the discretion of the court, which is again called upon to
consider a question once decided.” In the same vein, the venerable Justice Frankfurter opined: “the
ultimate touchstone of constitutionality is the Constitution itself and not what we have said about
it.” In contrast, the application of stare decisis on judicial interpretation of statutes is more inflexible.
As Justice Stevens explains: “after a statute has been construed, either by this Court or by a
consistent course of decision by other federal judges and agencies, it acquires a meaning that should
be as clear as if the judicial gloss had been drafted by the Congress itself.” This stance reflects both
respect for Congress’ role and the need to preserve the courts’ limited resources.

In general, courts follow the stare decisis rule for an ensemble of reasons, viz.:
(1) it legitimizes judicial institutions;
(2) it promotes judicial economy; and,
(3) it allows for predictability.

Contrariwise, courts refuse to be bound by the stare decisis rule where

(1) its application perpetuates illegitimate and unconstitutional holdings;
(2) it cannot accommodate changing social and political understandings;
(3) it leaves the power to overturn bad constitutional law solely in the hands of Congress; and, (4)
activist judges can dictate the policy for future courts while judges that respect stare decisis are stuck
agreeing with them.

In its 200-year history, the U.S. Supreme Court has refused to follow the stare decisis rule and
reversed its decisions in 192 cases. The most famous of these reversals is Brown v. Board of
Education which junked Plessy v. Ferguson’s “separate but equal doctrine.” Plessy upheld as
constitutional a state law requirement that races be segregated on public transportation. In Brown,
the U.S. Supreme Court, unanimously held that “separate . . . is inherently unequal.” Thus, by freeing
itself from the shackles of stare decisis, the U.S. Supreme Court freed the colored Americans from
the chains of inequality. In the Philippine setting, this Court has likewise refused to be straitjacketed
by the stare decisis rule in order to promote public welfare. In La Bugal-B’laan Tribal Association, Inc. v.
Ramos, we reversed our original ruling that certain provisions of the Mining Law are unconstitutional.
Similarly, in Secretary of Justice v. Lantion, we overturned our first ruling and held, on motion for
reconsideration, that a private respondent is bereft of the right to notice and hearing during the
evaluation stage of the extradition process.

An examination of decisions on stare decisis in major countries will show that courts are agreed on
the factors that should be considered before overturning prior rulings. These are workability,
reliance, intervening developments in the law and changes in fact. In addition, courts put in the
balance the following determinants: closeness of the voting, age of the prior decision and its merits.

The leading case in deciding whether a court should follow the stare decisis rule in constitutional
litigations is Planned Parenthood v. Casey. It established a 4-pronged test. The court should (1)
determine whether the rule has proved to be intolerable simply in defying practical workability; (2)
consider whether the rule is subject to a kind of reliance that would lend a special hardship to the
consequences of overruling and add inequity to the cost of repudiation; (3) determine whether
related principles of law have so far developed as to have the old rule no more than a remnant of an
abandoned doctrine; and, (4) find out whether facts have so changed or come to be seen differently,
as to have robbed the old rule of significant application or justification.
To be forthright, respondent’s argument that the doctrinal guidelines prescribed
inSantos and Molina should not be applied retroactively for being contrary to the principle ofstare
decisis is no longer new. The same argument was also raised but was struck down in Pesca v. Pesca,
and again in Antonio v. Reyes. In these cases, we explained that the interpretation or construction of
a law by courts constitutes a part of the law as of the date the statute is enacted. It is only when a
prior ruling of this Court is overruled, and a different view is adopted, that the new doctrine may
have to be applied prospectively in favor of parties who have relied on the old doctrine and have
acted in good faith, in accordance therewith under the familiar rule of “lex prospicit, non respicit.”

http://sc.judiciary.gov.ph/jurisprudence/2009/march2009/166562.htm

RES JUDICATA

RES JUDICATA- the Latin term for "a matter [already] judged", and may refer to two things: in
both civil law and common law legal systems, a case in which there has been a final judgment and is
no longer subject to appeal; and the term is also used to refer to the legal doctrine meant to bar (or
preclude) continued litigation of such cases between the same parties, which is different between
the two legal systems. In this latter usage, the term is synonymous with "preclusion".

Elements of Res Judicata

1. The former judgment must be final

2. Judgment must be on the merits of the case
3. The former decision is rendered by the court having jurisdiction over the subject.
4. There is similar identity of parties, subject matter and cause of action for both cases.

Cause of action - defined as "an act or omission of second party in violation of the legal right or
rights of the other, and its essential elements are legal right of the plaintiff, correlative obligation
of the defendant, and act or omission of the defendant in violation of said legal right."

TEST FOR APPLICATION OF RES JUDICATA

In the application of the doctrine of res judicata, if it is doubtful whether a second action is for the
same cause of action as the first, the test generally applied is to consider the Identity of facts
essential to their maintenance, or whether the same evidence would sustain both. If the same facts
or evidence would sustain both, the two actions are considered the same within the rule that the
judgment in the former is a bar to the subsequent action. If, however, the two actions rest upon
different states of facts, or if different proofs would be required to sustain the two actions, a
judgment in one is no bar to the maintenance of the other.

LITIS PENDENTIALitis pendentia:

"a pending suit." same parties, same cause. Interposed as a ground for the dismissal of a civil
action pending in court.Litis pendentia as a ground for the dismissal of a civil action refers to that
situation wherein another action is pending between the same parties for the same cause of action,
such that the second action becomes unnecessary and vexatious

Requisites for litis pendentia:(a) identity of parties or at least such as representing the same interests
in both actions(b) identity of rights asserted and reliefs prayed for, the relief being founded on the
same facts(c) the identity in the two cases should be such that the judgment that may be rendered in
one would, regardless of which party is successful, amounts to res adjudicata in the other. Forum
shopping à exists where the elements of litis pendentia are present, or where a final judgment in one
case will amount to res judicata in the final other. Doctrine of Estoppel à an unlicensed foreign
corporation doing business in the Philippines may bring suit in Philippine courts against a Philippine
citizen or entity who had contracted with and benefited from said corporation. A party is estopped
from challenging the personality of a corporation after having acknowledged the same by entering
into a contract with it. This doctrine of estoppel to deny corporate existence and capacity applies to
foreign as well as domestic corporations. The application of this principle prevents a person
contracting with a foreign corporation from later taking advantage of its noncompliance with the
statutes chiefly in cases where such person has received the benefits of the contract.

Replivin - A legal action to recover the possession of items of Personal Property.

Agilent Technologies v Integrated Silicon Technology 4.14.04

F: Petitioner Agilent is foreign corporation not licensed to transact business in thePhilippines but
engaged services of the defendant Silicon Tech by a 5-year Value Added Assembly Services
Agreement ("VAASA"). Silicon filed a complaint on "Specific Performance and Damages" against
Agilent in a civil case No. 3110-01-C alleging breach of oral agreement by petitioner to extend their
contract for 5 more years. Consequently, Agilent filed a complaint against Silicon on "Specific
Performance, Recovery of Possession, and Sum of Money with Replevin, Preliminary Mandatory
Injunction, and Damages" before the RTC as Civil Case No. 3123-2001-C. Agilent prayed that a writ of
replevin or a writ of preliminary mandatory injunction, be issued ordering defendants to immediately
return and deliver to plaintiff its equipment, machineries which were left in the plant of Silicon.
Silicon filed motion to dismiss on grounds of lack of legal capacity of Agilent to sue, litis pendentia,
forum shopping and failure to state cause of action. Such motion was denied by the trial court and
granted motion for replevin by the plaintiff. Without filing motion for reconsideration, Silicon filed
motion for certiorari to the appellate court. Court of Appeals granted respondents’ petition for
certiorari, set aside the assailed Order of the trial court and ordered the dismissal of Civil Case No.
3123-2001-C thus this petition for review assailing the decision of the CA.

I: (1) whether or not the Court of Appeals committed reversible error in giving due course to
respondents’ petition, notwithstanding the failure to file a Motion for Reconsideration and (2)
whether or not the Court of Appeals committed reversible error in dismissing Civil Case No. 3123-
2001-C.

R: CA contends RTC has no jurisdiction over Civil Case No. 3123-2001-C because of the pendency of
Civil Case No. 3110-2001-C therefore, a motion for reconsideration was not necessary before resort to
a petition for certiorari. There is no urgency of the case that merits dispensing the procedure of filing
motion for reconsideration before a certiorari may be filed. Respondents availed of premature
remedy which the CA should have dismissed outright.Litis pendencia is not appreciated in the case
since the instituted actions in both civil cases are different, the first is an action for "Specific
Performance and Damages" the other is action for "Specific Performance, Recovery of Possession,
and Sum of Money with Replevin, Preliminary Mandatory Injunction, and Damages." The issues
involved are also different: WON there is a breach of oral agreement for renewing theVAASA on the
first case while on the second case WON the petitioner has the right to possess the subject
properties. In the absence of the requisites of litis pendencia, the court ruled that the trial court is
not barred from taking cognizant to both cases.In assailing the legal capacity of Agilent to sue, the
court cited the following principles:

he principles regarding the right of a foreign corporation to bring suit in Philippine courts may thus
be condensed in four statements: (1) if a foreign corporation does business in the Philippines
without a license, it cannot sue before the Philippine courts;47 (2) if a foreign corporation
is not doing business in the Philippines, it needs no license to sue before Philippine courts on an
isolated transaction or on a cause of action entirely independent of any business transaction48; (3) if
a foreign corporation does business in the Philippines without a license, a Philippine citizen or entity
which has contracted with said corporation may be estopped from challenging the foreign
corporation’s corporate personality in a suit brought before Philippine courts;49 and (4) if a foreign
corporation does business in the Philippines with the required license, it can sue before Philippine
courts on any transaction.Two general tests to determine whether or not a foreign corporation can
be considered as "doing business" in the Philippines

1. substance test - whether the foreign corporation is continuing the body of the business or
enterprise for which it was organized or whether it has substantially retired from it and turned it over
to another.2. continuity test - implies a continuity of commercial dealings and arrangements, and
contemplates, to that extent, the performance of acts or works or the exercise of some of the
functions normally incident to, and in the progressive prosecution of, the purpose and object of its
organization.The court ruled that Agilent categorically is not doing business in the Philippines, hence
as a foreign corporation not doing business in the Philippines

, it needed no license before it can sue before our courts. The court granted the petition of Agilent
reversing the CA decision of dismissing Civil Case No. 3123-2001-C while granting the petition of
Agilent for Writ of Replivin.

Cayana v CA 03.18.04

F: It appears that the petitioners and respondents’ father, with the marital consent of his wife, sold
two parcels of land to their son, one of the respondents in this case. At the death of the father, the
mother filed an Affidavit of Adverse Claims pertaining to the two parcels of land, alleging that the
Deed of Absolute Sale in favor of their son were forgeries. However, later on, she issued an affidavit
withdrawing such adverse claims. Later on, together with petitioners of this case and
respondent Marceliano, they filed a case against respondent Pastor, for the cancellation of the Deed
of Absolute Sale and reconveyance of the two parcels of land. Meanwhile, respondent Pastor
entered into an agreement of counter guaranty with respondent corporation using second parcel of
land; mortgaged first parcel to respondent bank and sold first parcel of land to a certain Rosafina
Reginaldo, who then mortgaged the land to respondent bank.As the civil case against respondents
was ongoing, respondents filed an answer but were found to be in default, the court
allowed petitioners to file evidence ex parte. The court decided the civil case in favor of petitioners,
declaring the deed of absolute sale null and void but denied the prayer for reconveyance saying that
the mother was still the owner of the land. No appeal was entered by respondents and the decision
was deemed final. The mortgage on the first parcel of land was foreclosed and the bank being the
highest bidder, bought the property who then sold it to respondent spouses Marceliano
Cayabyab. The respondent spouses M.Cayabyab then sold the land to respondent spouses
Ramos. The petitioners filed a verified complaint for the nullification and cancellation of the deeds of
absolute sale of the respondents. They asked also for the possession of the 2 parcels of land due to
the alleged donation inter vivos of their mother. The trial court decided in favor of the petitioners,
part of the decision included the application of res judicata. Respondentsappealed this to the CA
contending the misuse of res judicata. CA decided in favor of the respondents. It held that res
judicata was inapplicable and also, declared the deeds of absolute sale and TCT’s valid. CA mentioned
that it was evident that there was an affidavit withdrawing adverse claims over land, that the sale of
parcels of landwere not simulated and not done in bad faith, and that there was no evidence for the
donation inter vivos being alleged by the petitioners.

I: Whether or not the decision on the first civil case constitutes a bar to the defenses and claims of
respondents in the second case?

R:Both the trial court and CA misread the provisions on the effect of judgments or final orders as
given by Rules of Civil Procedure:SEC. 47. Effect of judgments or final orders.--The effect of
a judgment or final order rendered by a court of the Philippines, having jurisdiction to pronounce the
judgment or final order, may be as follows:(a) In case of a judgment or final order against a specific
thing, or in respect to the probate of a will, or the administration of the estate of a deceased person,
or in respect to the personal, political, or legal condition or status of a particular person or his
relationship to another, the judgment or final order is conclusive upon the title to the thing, the will
or administration, or the condition, status or relationship of theperson; however, the probate of a
will or granting of letters of administration shall only be prima facie evidence of the death of
the testator or intestate;(b) In other cases, the judgment or final order is, with respect to the matter
directly adjudged or as to any other matter that could have been raised in relation thereto,
conclusive between the parties and their successors in interest by title subsequent to the
commencement to the action or special proceeding, litigating for the same thing and under the same
title and in the same capacity;(c) In any other litigation between the same parties or their
successors in interest, that only is deemed to have been adjudged in a former judgment or final order
which appears upon its face to have been so adjudged, or which was actually and necessarily
included therein or necessarily thereto.

Res judicata and the bar of prior judgment are not applicable to this case since the requisites for
these two to apply are not present. There is ‘bar by prior judgment’ when, between the first case
where the judgment was rendered and the second case which is sought to be barred, there is
identity of parties, subject matter and cause of action.

The judgment in the first case constitutes an absolute bar to the subsequent action. It is final as to
the claim or demand in controversy, including the parties and those in privity with them, not only as
to every matter which was offered and received to sustain or defeat the claim or demand, but as to
any other admissible matter which might have been offered for that purpose and of all matters that
could have been adjudged in that case. But where between the first and second cases, there is
identity of parties but no identity of cause of action, the first judgment is conclusive in the second
case, only as to those matters actually and directly controverted and determined and not as to
matters merely involved therein. For res judicata to apply, there must be (1) a former final judgment
rendered on the merits; (2) the court must have had jurisdiction over the subject matter and
the parties; and, (3) identity of parties, subject matter and cause of action between the first and
second actions. According to the appellate court, the third requisite for the application of res
judicata is not present in this case.The doctrine that should have been followed in this case
is conclusiveness of judgment--a fact or question which was in issue in a former suit and there was
judicially passed upon and determined by a court of competent jurisdiction, is conclusively settled by
the judgment therein as far as the parties to that action and persons in privity with them are
concerned and cannot be again litigated in any future action between such parties or their privies, in
the same court or any other court of concurrent jurisdiction on either the same or different cause
of action, while the judgment remains unreversed by proper authority.

Urbana Velasco v People’s Homesite (GR NO. L-39674) 01.31.78

“Supreme court exclusive appellate jurisdiction over cases in which only errors or questions of law are
involved.” cause of action has been defined as "an act or omission of second party in violation of the
legal right or rights of the other, and its essential elements are legal right of the plaintiff, correlative
obligation of the defendant, and act or omission of the defendant in violation of said legal right."

F: The case at bar involves a parcel of land which the petitioner occupies and built a house thereof.
Petitioner filed before the defendant corporation for the award of sale of the said parcel of land and
found out that it was already awarded to defendant spouses. Petitioner filed protest before the
court for annulment of deed of sale of said lot. Defendant spouses invoke res judicata in their
counterclaim stating that the petitioner has no cause for action since there is a decision already to
quiet the title and recovery of possession of the Lot

involved in favor of the defendant spouses. The court dismissed the case on ground of res judicata
stating that the court decision has already been final and executory. Petitioner appealed before the
appellate court which forwarded the case to SC since the issue involved is a question of law.

I: WON res judicata is applicable at the case at bar.

R: No. For res judicata be appreciated in a case, 4 elements must be present: (1) there is a former final
judgment; (2) decision rendered by court with proper jurisdiction over the case; (3) judgment must
be on merit; (4) there must be identity of parties, subject matter and cause of action between 2
cases. The identity of cause of action is the main issue on the case at bar. The court held that in order
to identify whether the second action is of the same cause as the first the test generally applied is to
consider the Identity of facts essential to their maintenance, or whether the same evidence would
sustain both. If the same facts or evidence would sustain both, the two actions are considered the
same within the rule that the judgment in the former is a bar to the subsequent action. If, however,
the two actions rest upon different states of facts, or if different proofs would be required to sustain
the two actions, a judgment in one is no bar to the maintenance of the other.The first case involves
quieting the title and recovery and possession of the land while the second case involves the action
for annulment of award and deed of sale and cancellation of the land title. The case was remanded
back to the lower court for further proceedings.
 RATIO DECIDENDI

Ratio decidendi (Latin plural rationes decidendi) is a Latin phrase meaning "the reason" or "the
rationale for the decision." The ratio decidendi is "[t]he point in a case which determines the
judgment"[1] or "the principle which the case establishes."

- In other words, ratio decidendi - legal rule derived from, and consistent with, those parts of legal
reasoning within a judgement on which the outcome of the case depends.
- It is a legal phrase which refers to the legal, moral, political, and social principles used by acourt to
compose the rationale of a particular judgment. Unlike obiter dicta, the ratio decidendiis, as a general
rule, binding on courts of lower and later jurisdiction—through the doctrine ofstare decisis. Certain
courts are able to overrule decisions of a court of co-ordinate jurisdiction—however out of interests
of judicial comity they generally try to follow co-ordinate rationes.

Ratio decidendi (plural: rationes decidendi) is a Latin phrase meaning "the reason (or rationale) for the
decision."
The ratio decidendi is:
"[t]he point in a case which determines the judgment"[1] or
"the principle which the case establishes."[2]

It is a legal phrase which refers to the legal, moral, political, and social principles used by a court to
compose the rationale of a particular judgment. Unlike obiter dicta, the ratio decidendi is, as a general
rule, binding on courts of lower jurisdiction--through the doctrine of stare decisis. Certain courts are
able to overrule decisions of a court of co-ordinate jurisdiction--however out of interests of judicial
comity they generally try to follow co-ordinate rationes.
The process of determining the ratio decidendi is a correctly thought through analysis of what the court
actually decided – essentially, based on the legal points about which the parties in the case actually
fought. All other statements about the law in the text of a court opinion – all pronouncements that do
not form a part of the court’s rulings on the issues actually decided in that particular case (whether they
are correct statements of law or not) -- are obiter dicta, and are not rules for which that particular case
stands.

FALLO

- The legal document setting the reasons for judicial decisions.

- Reasons for a court’s judgment as opposed to the decision itself.
 OBITER DICTUM

- Judicial opinions on points of law which is not binding but may be regarded as persuasive in a
future decision.

- Words of an opinion entirely unnecessary for the decision of the case. A remark made or opinion
expressed by a judge in a decision upon a cause, "by the way", that is, incidentally or collaterally, and
not directly upon the question before the court or upon a point not necessarily involved in the
determination of the cause, or introduced by way of illustration, or analogy or argument. Such are
not binding as precedent.

An obiter dictum (plural obiter dicta, often referred to simply as dicta), Latin for a statement "said by
the way", is a remark or observation made by a judge that, although included in the body of the court's
opinion, does not form a necessary part of the court's decision. In a court opinion, obiter dicta include,
but are not limited to, words "introduced by way of illustration, or analogy or argument."[1] Unlike
the rationes decidendi, obiter dictaare not the subject of the judicial decision, even if they happen to be
correct statements of law. Under the doctrine of stare decisis, statements constituting obiter dicta are
therefore not binding, although in some jurisdictions, such as England and Wales, they can be
strongly persuasive.