SECOND DIVISION
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PHILIPPINE NATIONAL BANK, Petitioner, - versus - ADELA SIA and ROBERT NGO, Respondents. |
G.R.
No. 165836 Present: Quisumbing, J., Chairperson, Carpio Morales, Tinga, CHICO-NAZARIO,* and VELASCO, JR., JJ. Promulgated: |
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February
18, 2009 |
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DECISION
QUISUMBING, J.:
This petition for review seeks to set aside the Decision[1]
dated
The
antecedents of the case, as culled from the records, are:
Midcom
Interline Development Corporation (MIDCOM) was the registered owner of a
349-square meter lot with a ten-door apartment located at the corner of Alvarez
and Oroquieta Streets in Sta. Cruz, Manila, and covered by Transfer Certificate
of Title (TCT) No. 156156.[3] On P480,000, with the agreement that P150,000 be given
upon the execution of the contract and the remaining P330,000 be paid in
three monthly installments. Out of the
purchase price of P480,000, the P70,000.
The subject
property was again sold by MIDCOM to Apolonia Sia Ngo and respondent Adela Sia
for P630,000, as evidenced by a Deed of Absolute Sale[5]
dated
On
On
On
WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiffs against the defendants:
(1) Ordering defendant Midcom thru Miguel Say to execute the Deed of
Absolute Sale in favor of plaintiffs upon payment of the balance of the
purchase price of the land in the amount of P70,000.00, and to deliver
the duplicate owner’s copy of the title over the land in question to the
plaintiffs as well as such other documents necessary for the transfer or
conveyance thereof to the plaintiffs;
(2) Ordering defendants Apolonia Ngo and all other persons claiming rights under them to turn over and deliver the duplicate original of the title over the lot in dispute to plaintiffs and to convey the property to them;
(3) Ordering defendant Register of Deeds of Manila to issue the title in the name of plaintiffs over the premises in question and to cancel the title in the name of Apolonia Ngo and other persons;
(4) Declaring the adverse claim of Apolonia Ngo as void and of no effect;
(5) Ordering the Register of [Deeds of]
(6) Ordering the defendants Midcom thru Miguel Say and Apolonia Ngo to pay
jointly and severally the plaintiffs the sum of P100,000.00 as moral
damages, and P50,000.00 as exemplary damages;
(7) Ordering the defendants Midcom, Miguel Say and Apolonia Ngo to pay
jointly and severally the plaintiffs the sum of P30,000.00 attorney’s
fees;
(8) Respondents Miguel Say, Apolonia Ngo and the Register of Deeds of
Manila are hereby declared in contempt of court and are hereby fined P100.00
each with subsidiary imprisonment in case of insolvency for violation of the
restraining order;
(9) Ordering defendants to pay the costs.
SO ORDERED.[11]
Upon
finality of the said decision, a writ of execution[12]
was issued by the RTC of Manila, Branch 29 on
On P5,000,000 which the
On
Thereafter,
on August 2, 1991, respondents Adela Sia and Robert Ngo, claiming that their title to the subject property was
beclouded by the decision and writ issued in Civil Case No. 84-27347, and
joining an unwilling Apolonia as compulsory plaintiff, instituted a complaint[18]
for quieting of title and/or reconveyance, damages, and annulment of judgment
with prayer for restraining order and/or preliminary injunction before the RTC
of Manila, Branch 3 against the Galicias, the City Sheriff of Manila, the
Sheriff of Branch 29 of the RTC of Manila, the Register of Deeds, and
MIDCOM. The complaint, docketed as Civil
Case No. 91-58130, was later amended by deleting therein the action for
annulment of judgment.
On
The complaint lodged before Branch 3 of the RTC of
Manila and docketed as Civil Case No. 91-58130 was amended for the second time
by impleading PNB as a party defendant for having accepted the subject property
as one of the collaterals in the loan it extended to the
On
P630,000
plus legal rate of interest from P20,000.[24] The dispositive portion of the decision
states:
WHEREFORE, judgment is rendered:
1. Ordering MIDCOM Corporation to pay plaintiff
the sum of P630,000.00 plus legal rate of interest from P20,000.00.
2. Dismissing plaintiffs’ complaint against
defendants Felicisimo
3. Dismissing plaintiffs’ complaint against PNB.
As to counterclaim:
4. Plaintiffs are hereby ordered
jointly and solidarily to pay defendants Felicisimo and Myrna Galicia the sum
of P20,000.00 as attorney’s fees plus costs of litigation.
5.
Plaintiffs are hereby ordered jointly and solidarily to pay defendant
PNB the sum of P20,000.00 as attorney’s fees plus cost of litigation.
All other claims and counterclaims are hereby dismissed.
SO ORDERED.[25]
On
On
WHEREFORE, the appeal is GRANTED and the assailed Decision is REVERSED and SET ASIDE. In its stead[,] judgment is rendered:
1. Declaring Apolonia S. Ngo, married to Robert Ngo, and Adela Sia as co-owners of the litigated lot and its improvements;
2. Ordering the Register of Deeds of Manila to recall and cancel TCT No. 195378 in the names of the Galicias and to restore and reinstate TCT No. 164726 in the names of Apolonia S. Ngo, married to Robert Ngo, and Adela Sia; and
3. Ordering the Register of Deeds of Manila to cancel and remove all pertinent notices/annotations of adverse claim, lis pendens, mortgage and liens on TCT No. 164726.
SO ORDERED.[27]
The appellate court held that what was
entered into by MIDCOM and the
Further, the Court of Appeals held
that PNB was a mortgagee in bad faith.
It noted that while the Real Estate Mortgage and Credit Agreement was
entered into only on January 23, 1991 or a day after TCT No. 195378 in the name
of the Galicias was issued on January 22, 1991, the loan application offering
the subject property as collateral was dated November 29, 1990 and the PNB
Rizal Avenue branch recommended its approval on December 14, 1990. It held that PNB committed lapses when it
acted on the offer of the
PNB[28]
and the
Hence, the
instant petition where PNB
alleges that the Court of Appeals committed serious error in
I.
…ORDERING THE
[REGISTER OF DEEDS] OF
II.
…RULING THAT PETITIONER PNB IS A MORTGAGEE IN BAD FAITH.
III.
…ORDERING THE CANCELLATION AND REMOVAL OF ALL PERTINENT NOTICES/ANNOTATIONS OF ADVERSE CLAIM, LIS PENDENS, MORTGAGE AND LIENS ON TCT NO. 164726.[31]
Essentially, the issues for our resolution are: (1) whether Civil
Case No. 91-58130 is barred by res judicata; and (2) whether PNB is a
mortgagee in bad faith.
PNB
argues that res judicata applies in the present case. It maintains that the facts in the action for
quieting of title (Civil Case No. 91-58130) are also the very same facts evaluated
in the proceedings before the Manila RTC, Branch 29 in Civil Case No. 84-27347,
CA-G.R. SP No. 22889 and CA-G.R. SP No. 25819 which involve the same parties,
same issues, and which have already been resolved with finality by the courts.[32]
Respondents counter that
the vital elements of res judicata are not present because Adela Sia, an
indispensable party, was not impleaded as party defendant in Civil Case No.
84-27347.[33]
After careful review, we find merit in PNB’s petition.
The doctrine
of res judicata as enunciated in
Section 47, Rule 39 of the Rules of Court, reads:
SEC.
47. Effect of judgments or final orders.–The effect of a judgment or
final order rendered by a court of the
x x x x
(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 of the action or special proceeding, litigating for the same thing and under the same title and in the same capacity; and
(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 necessary thereto.
Res judicata
literally means “a matter adjudged; a thing judicially acted upon or decided; a
thing or matter settled by judgment.” Res judicata
lays the rule that an existing final judgment or decree rendered on the merits,
and without fraud or collusion, by a court of competent jurisdiction, upon any
matter within its jurisdiction, is conclusive of the rights of the parties or
their privies, in all other actions or suits in the same or any other judicial
tribunal of concurrent jurisdiction on the points and matters in issue in the
first suit.[34]
For the
preclusive effect of res judicata to
be enforced, however, the following requisites must be present: (1) the judgment or order sought to bar the
new action must be final; (2) the
decision must have been rendered by a court having jurisdiction over the
subject matter and the parties; (3) the
disposition of the first case must be a judgment on the merits; and (4) there must be between the first and second
action, identity of parties, subject matter and causes of action.[35]
In
defending their title over the subject property, respondents insist that the
decision in Civil Case No. 84-27347 is null and void for failure to implead
them as indispensable parties. However,
these arguments adduced by respondents have already been raised, passed upon,
and rejected with finality in CA-G.R. SP No. 22889 and CA-G.R. SP No. 25819.
In
CA-G.R. SP No. 22889, the Court of Appeals ruled in this wise:
In that Civil Case No. 84-27347, defendant Apolonia S. Ngo
filed her answer to the complaint. She
thereby submitted to the jurisdiction of the respondent court, she cannot now
alleged (sic) in the petition at bar that the court a quo did not acquire jurisdiction over her person. If petitioner Apolonia S. Ngo is indeed
married to Robert Ngo, she kept silent about her marital status during the
entire proceedings in Civil Case No. 84-27347.
Petitioner Apolonia S. Ngo could have assailed from the beginning the
lower court’s jurisdiction over her person on the ground that her husband
Robert Ngo was not impleaded and could have thus invoked what she now claims
that she cannot be sued for not being joined with her husband, Robert Ngo. This Court frowns upon petitioners’ omission
in not disclosing to the court below their status as husband and wife. On the other hand, Robert Ngo, petitioner
herein, as husband of Apolonia S. Ngo, cannot disclaim knowledge about the fact
that his wife is a defendant in Civil Case No. 84-27347. It is, therefore, clear that petitioner
Apolonia S. Ngo is now estopped from assailing the jurisdiction of the Regional
Trial Court of Manila in Civil Case No. 84-27347 after she had voluntarily
submitted herself to its jurisdiction (Tejones vs. Geronilla, 159 SCRA
100). Petitioners must be considered to
have accepted the lower court’s jurisdiction.
Estoppel is a bar against any claims of lack of jurisdiction. (Balais vs. Balais, 159 SCRA 37).
x x x x
In the case at bar, petitioner
Apolonia S. Ngo lost her right to appeal by failing to avail of it
seasonably. To remedy that loss, the
petitioners have now resorted to the extraordinary remedy of certiorari as a
mode of obtaining reversal of the judgment from which they failed to
appeal. But since the decision in Civil
Case No. 84-27347 has become final, it has gone beyond the reach of any court
to modify in any substantive aspect. . . .[36]
x x x x
In CA-G.R. SP No. 25819, the Court of Appeals held that:
What is important to note is that after due trial, the
trial court found the property in question was the subject of a contract to
sell on August 20, 1984…entered into by [the P410,000.00, with a balance of P70,000.00
payable on
Upon
receipt of information that defendant Miguel Say, Jr. was selling the property
in question to another, the [Galicias] executed an Affidavit of Adverse Claim
on October 2, 1984 and annotated the same on the same date in TCT [No.]
156156.… The trial court declared the unilateral rescission of the contract to
sell executed by defendant Midcom and Say dated October 3, 1984 in favor of the
[Galicias] null and void. The trial
court likewise declared Apolonia S. Ngo as a purchaser in bad faith when she
purchased the property in question, being aware of facts that ought to induce
her to inquire into the status of said property. . . .
Considering that the validity of the contract to sell
executed by defendant Midcom through Miguel Say, Jr. in favor of [the Galicias]
was upheld and the deed of sale executed by defendants Midcom thru Miguel Say,
Jr. in favor of Apolonia Ngo, was in effect declared null and void, TCT No.
164726 of the Registry of Deeds of Manila issued to Apolonia Ngo and her
alleged co-owner Adela Sia pursuant to the invalidated deed of sale and in
violation of the restraining order issued by the respondent court on October
31, 1984 did not produce any right or title in favor of the apparent registered
owners of the property in question, and for which reason the respondent court
correctly ordered Apolonia Ngo and all persons claiming right under said TCT
No. 164726 to turn over and deliver the duplicate owner’s copy thereof to
plaintiffs and to convey the subject property to them.
There is
reason to believe that [the Galicias] could not at the time they filed the
complaint have included petitioner Adela Sia as one of the defendants in Civil
Case No. 84-27347 before the respondent Regional Trial Court of Manila on the
ground that said case was principally to ask the court to compel Midcom to
execute a deed of sale in favor of respondents Galicia and to deliver its
owner’s copy of the title to the latter, and incidentally to cancel the adverse
claim annotated by Apolonia Ngo on the title of Midcom.
Upon the
other hand, an adverse claim of plaintiff-spouses Galicia and notice of lis pendens having been annotated on the
TCT of defendant Midcom of which petitioner Adela Sia had constructive, if not
actual notice, said petitioner who claims an interest in the property under
litigation should have intervened in the action (Civil Case No. 84-27347)
brought by the spouses Galicia against Midcom, Say, Apolonia Ngo, and the
Register of Deeds of Manila. Having
failed to intervene, the judgment rendered in said case is binding on her. . .
.
Having
acquired no right or title to the property in dispute, petitioner [Adela] Sia
has no cause of action to ask for the annulment of the judgment of the
respondent Regional Trial Court in Civil Case No. 84-27347.[37]
x x x x
In denying Adela Sia’s
motion for reconsideration in CA-G.R. SP No. 25819, the Court of Appeals in its
x x x x
In the
third ground[, respondent Adela], claiming to be an indispensable party, argues
that she was deprived of her property without due process of law.
We cannot
sustain [respondent’s] claim.
Considering the manner how she and Apolonia Ngo obtained TCT No. 164726
of the Registry of Deeds of Manila in violation of the restraining order issued
by the trial court, and the nature of the complaint filed by the spouses
Moreover,
as we have said in the decision sought to be reconsidered that an adverse claim
and notice of lis pendens having been
annotated in the TCT of defendant Midcom, of which she has notice, she should
have intervened in said action.
Additionally, she and Apolonia Ngo having the same interest in the land
in litigation through the alleged sale to them by Midcom, the judgment against
Apolonia is binding on her.[38]
x x x x
As mentioned above, this
Court denied the petition for review filed in CA-G.R. SP No. 25819 and ordered
that an entry of judgment be made in the case.
There being no appeals made in CA-G.R. SP No. 22889, the latter has also
attained finality.
In
the present case, the first three elements of res judicata are present. As
to the fourth element, it
is important to note that the doctrine of res
judicata has two aspects: first, “bar by prior judgment” which is
provided in Rule 39, Section 47 (b) of the Rules of Court and second, “conclusiveness of judgment”
which is provided in Section 47 (c) of the same Rule.
There
is “bar by prior judgment” when, as between the first case where the judgment
was rendered, and the second case that is sought to be barred, there is
identity of parties, subject matter, and causes of action. But where there is identity of parties and
subject matter in the first and second cases, but no identity of causes of
action, the first judgment is conclusive only as to those matters actually and
directly controverted and determined and not as to matters merely involved
therein. This is “conclusiveness of
judgment.” Under the doctrine of
conclusiveness of judgment, facts and issues actually and directly resolved in
a former suit cannot again be raised in any future case between the same
parties, even if the latter suit may involve a different claim or cause of
action. The identity of causes of action
is not required but merely identity of issues.[39]
In
this case, conclusiveness of judgment exists because respondents again seek to
enforce their right and title over the same subject matter, the litigated property,
basing their claim on the nullity of the judgment in Civil Case No. 84-27347,
for failure to implead them therein as indispensable parties, which had been
overruled by final and executory judgments.
The same question cannot be raised again even in a different proceeding
involving the same parties.
Anent
the issue that PNB is a mortgagee in bad faith, PNB claims it was diligent in
processing the loan application of the Galicias and that respondents failed to
dispute that prior to the signing of the Real Estate Mortgage Agreement on
January 23, 1991, it conducted a credit investigation on the
Respondents,
on the other hand, argue that PNB is a mortgagee in bad faith as it closed its
eyes to the infirmity of the
We are of the opinion and so hold that PNB acted in good
faith when it approved the loan application of the
WHEREFORE, the petition is hereby GRANTED.
The assailed
Costs against
respondents.
SO ORDERED.
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LEONARDO A. QUISUMBING Associate Justice Chairperson |
WE CONCUR:
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CONCHITA CARPIO MORALES Associate Justice |
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DANTE O. TINGA Associate Justice |
MINITA V. CHICO-NAZARIO Associate Justice |
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PRESBITERO J. VELASCO,
JR. Associate Justice |
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A T T E S T A T I O N
I attest that the conclusions in the above Decision
had been reached in consultation before the case was assigned to the writer of
the opinion of the Court’s Division.
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LEONARDO A. QUISUMBING Associate Justice Chairperson |
C E R T I F I C A T I O N
Pursuant to Section 13, Article VIII of the
Constitution, and the Division Chairperson’s Attestation, I certify that the
conclusions in the above Decision had been reached in consultation before the
case was assigned to the writer of the opinion of the Court’s Division.
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REYNATO S. PUNO Chief Justice |
* Additional member in lieu of Associate Justice Arturo D. Brion who had inhibited himself for having acted in the case while in the Court of Appeals and concurred with the ponente, Associate Justice Roberto A. Barrios.
[1] Rollo, pp. 69-86. Penned by Associate Justice Roberto A. Barrios, with Associate Justices Josefina Guevara-Salonga and Arturo D. Brion (now a member of this Court) concurring.
[2]
[3] Exhibit “D,” folder of exhibits, p. 6.
[4] Exhibit “K,” id. at 34-35.
[5] Exhibit “A,” id. at 1-2.
[6] Exhibit “L,” id. at 36.
[7] CA rollo, p. 117.
[8] Records, pp. 33-40.
[9] Folder of exhibits, p. 7.
[10] Exhibit “E,” folder of exhibits, p. 9.
[11] Records, pp. 151-152.
[12]
[13] Exhibit “F,” folder of exhibits, p. 10.
[14] Exhibit
“M,” id. at 37-38.
[15] Rollo, pp. 139-147.
[16]
[17]
[18] Records, pp. 1-13.
[19] Folder of exhibits, pp. 99-106.
[20] Rollo, pp. 172-178.
[21] Folder of exhibits, pp. 133-138.
[22]
[23]
[24] Rollo, pp. 226-232.
[25]
[26]
[27]
[28] CA rollo, pp. 178-190.
[29]
[30] Rollo, pp. 89-90.
[31]
[32]
[33]
[34] Republic
v. Yu, G.R. No. 157557,
[35] Heirs of Abalos v. Bucal, et al., G.R. No. 156224, February 19, 2008,546 SCRA 252, 272.
[36] Rollo, pp. 149-150.
[37]
[38] Folder of exhibits, p. 137.
[39] Republic v. Yu, supra note 34, at 422; Heirs of Rolando N. Abadilla v. Galarosa, G.R. No. 149041, July 12, 2006, 494 SCRA 675, 688-689.
[40] Rollo, p. 63.
[41]
[42] Folder of exhibits, pp. 42, 50.
[43]
[44] Records, pp. 234-235.
[45] Rollo, p. 232.