G.R. No. 24930 , December 31, 1926
TAN PHO and TAN U, petitioners-appellees, vs. AMPARO NABLE JOSE, as guardian for the prodigal Zacarias Lichauco, respondent-appellant.

DOCTRINE: A final judgment of the Supreme Court declaring a contract void for lack of a mandatory judicial approval cannot be circumvented by a subsequent, retroactive grant of such approval by the lower court, especially when the motion for approval had been effectively withdrawn or superseded by the action seeking annulment. The principle of res judicata bars the re-litigation of the validity of the contract based on the same essential facts.

FACTS

1. On July 7, 1913, Zacarias Lichauco, while not under guardianship, agreed in writing (Exhibit A) to lease his interest in a Manila property to Tan Pho and Tan U.
2. On October 14, 1913, after Lichauco was placed under guardianship, his then-guardian, Geronimo Jose, executed a formal 20-year lease contract (Exhibit B) with the lessees, followed by a clarifying document (Exhibit C) on December 1, 1913.
3. The then-judge of the guardianship court, Judge A.S. Crossfield, placed a handwritten notation “Aprobado” (Approved) on Exhibits B and C, but no formal order of approval was ever entered into the court’s records.
4. The lessees constructed a building on the property as required by the lease.
5. In 1920, a subsequent guardian, Faustino Lichauco, filed an action to annul the lease. The Supreme Court, in *Lichauco vs. Tan Pho* ( G.R. No. 19512 , Nov. 22, 1923), declared the lease voidable because it lacked the requisite formal judicial approval by a court order entered of record.
6. Following this Supreme Court decision, Tan Pho and Tan U filed the present petition in the guardianship court in 1925. They sought to have the court grant the long-pending motion for approval allegedly filed by guardian Geronimo Jose on October 15, 1913, thereby retroactively validating the lease.
7. The current guardian, Amparo Nable Jose, opposed, arguing that the filing of the annulment case in 1920 constituted a withdrawal/repudiation of the 1913 motion for approval and that the Supreme Court’s decision was res judicata.
8. The lower court granted the petitioners’ request and issued an order purporting to approve the lease retroactively. The guardian appealed.

ISSUE

Whether the lower court could, after the Supreme Court’s final judgment declaring the lease voidable for lack of judicial approval, validly grant judicial approval retroactively based on a motion filed by a prior guardian in 1913.

RULING

NO. The lower court’s order is reversed.

1. Res Judicata Applies. The Supreme Court had already rendered a final and executory judgment on the validity of the lease contract (Exhibits B and C). That judgment conclusively determined that the contract was voidable due to the absence of the mandatory judicial approval entered of record. This issue cannot be re-litigated.
2. The 1913 Motion for Approval Was No Longer Viable. The Court held that the act of the subsequent guardian (Faustino Lichauco) in filing the annulment case in 1920 constituted a withdrawal and repudiation of the 1913 motion for approval filed by the former guardian (Geronimo Jose). By the time the lower court acted on the petitioners’ 1925 petition, there was effectively no pending motion before it to approve. The Supreme Court’s annulment decree had the legal effect of revoking any inchoate or unacted-upon motion related to the voided contract.
3. A Court Cannot Validate a Contract Declared Void by a Higher Court. The lower court erred in attempting to cure the fatal defect identified by the Supreme Court through a retroactive approval. To allow this would permit a lower court to nullify or circumvent the final judgment of the Supreme Court, undermining judicial hierarchy and the finality of decisions.
4. Distinction from Cited Authorities. The Court distinguished the authorities cited by the petitioners (regarding new facts altering res judicata). Here, the “new fact” was the lower court’s own attempt at retroactive approval, not an independent, subsequent event that fundamentally changed the parties’ rights. The essential factthe lack of approval at the critical timehad been conclusively settled.

DISPOSITION: The judgment of the lower court is REVERSED. The order retroactively approving the lease contract is set aside. Costs against the petitioners-appellees.

SEPARATE OPINION:
* Romualdez, J., dissented, stating he saw sufficient ground to affirm the lower court’s judgment. (The digest does not elaborate on his reasoning).