171 Phil.

312

FIRST DIVISION
[ G.R. No. L-39674, January 31, 1978 ]
URBANA VELASCO AROC ASSISTED BY HER HUSBAND CELESTINO
AROC, PLAINTIFF-APPELLANT, VS. PEOPLE'S HOMESITE AND
HOUSING CORPORATION AND CIRILO B. GARCIA AND FELICIANA
BITO, DEFENDANTS-APPELLEES.
DECISION

GUERRERO, J.:

This case was certified to Us by the Court of Appeals[1] in CA-G.R. No. 46525-R entitled
"Urbana Velasco Aroc assisted by her husband Celestino Aroc, Plaintiff-Appellant, versus
People's Homesite and Housing Corporation and Cirilo B. Garcia and Feliciana Bito,
Defendants-Appellees," pursuant to the provisions of Section 17 of Republic Act No. 296, as
amended, and Section 3, Rule 50 of the Revised Rules of Court per its Resolution dated October
31, 1974 since the appeal involves pure questions of law.

Plaintiff-appellant appealed to the Court of Appeals the order of the Court of First Instance of
Rizal in Civil Case No. Q-11807 dismissing on the ground of res judicata the complaint to
declare null and void the award and sale of a parcel of land, known as Lot 6, Block E-144,
Piñahan Subdivision, Quezon City, to defendants-appellees Cirilo B. Garcia and his spouse,
Feliciana Bito, by the other defendant-appellee PHHC, and the cancellation of the certificate of
title issued to said spouses.

The facts are as stated in the Resolution of the Court of Appeals, thus:

"From the allegations of the complaint we gather that as early as 1952 plaintiff and
her family started occupying one-half of the lot in controversy while a certain
Alfonso Naparan and his family occupied the other half. In 1956 plaintiff
constructed a house of strong materials worth P3,270, planted fruit-bearing trees and
fenced the portion occupied by her. In May 1956 she filed with defendant
corporation an application for the award and sale of said portion to her. She filed
another application in January 1957. Later she discovered that both applications
were missing from the files of defendant corporation. Upon suggestion of an official
of the latter, she reapplied for the same portion of Lot 6 on February 3, 1966.
However, Lot 6 was unlawfully and in bad faith awarded and sold to defendants-
spouses who were disqualified from purchasing it, since they had previously
purchased a 1,450-square meter lot (Lot 12, Block W-28) from defendant
corporation and already owned several lots in Greater Manila.
It is further gathered that plaintiff formally protested the award and sale of Lot 6 to
defendants-spouses with the Board of Directors of defendant corporation. The
investigating officer recommended the rescission of the conditional sale of Lot 6 and
the award of the lot to plaintiff and Alfonso Naparan. In spite of said
recommendation defendant corporation executed a deed of sale in favor of
defendants-spouses. Transfer Certificate of Title No. 106146 covering the lot was
subsequently issued to them by the Register of Deeds of Quezon City.

At the time of the filing of the complaint on January 22, 1968, plaintiff and her
family were still occupying one-half portion of the lot.

In its answer with counterclaim, defendant corporation denied the material

allegations of the complaint and, as special and affirmative defenses, alleged that the
complaint stated no cause of action; that plaintiff was a mere squatter of Lot 6; that
the award and sale of said lot to defendants-spouses was legal and valid, for they had
complied with the requirements imposed by defendant corporation for its
acquisition; and that plaintiff's claim had been passed upon by an investigating
committee which found the same to be without basis.

Defendants-spouses likewise denied the material allegations of the complaint. They

set up as special and affirmative defenses the following: that there was a pending
action to quiet title and/or recovery of possession of Lot 6 with preliminary
injunction and damages filed by them against Alfonso Naparan and herein plaintiff
(Civil Case No. Q-10442) and in her answer she raised the same issues of fact and
law alleged by her in the present complaint; that there was a valid ground to dismiss
the new complaint due to the pendency of Civil Case No. Q-10442 between the same
parties for the same cause of action; that Lot 6 was lawfully awarded and sold to
them by defendant corporation and if ever plaintiff suffered damages her action
should be against the corporation; that plaintiffs could no longer question the validity
of the award and sale, since it was duly approved by the General Manager of
defendant corporation after three investigations on plaintiff's protest had been
conducted and she had been given the opportunity to air her grievances, but her
protest was dismissed for lack of merit.

Defendants-spouses later amended their answer to include the following allegation:

 "6-A. That on December 26, 1968, the Honorable Judge Honorato B.
Masakayan, Branch V of this Court rendered judgment in Civil Case No.
Q-10442, the dispositive portion of which is quoted as follows:

"'WHEREFORE, judgment is hereby rendered in favor of

plaintiff Cirilo B. Garcia and against defendants Alfonso
Naparan and Urbana Velasco Vda. de Aroc, declaring plaintiff
Cirilo B. Garcia the rightful and legal owner of Lot 6, Block
E-144, Piñahan Subdivision, Quezon City, and ordering the
defendants Alfonso Naparan and Urbana Velasco Vda. de
Aroc and all persons claiming rights under them to vacate the
premises in question and restore the possession thereof to the
plaintiff, and to pay the plaintiff the sum of P500.00 as
attorney's fees and to pay the costs of suit.

"'SO ORDERED.'

so much so that the above decision having become final and executory, there is
nothing left for this Honorable Court to do except to dismiss the instant complaint
based on the doctrine of res judicata, otherwise there will be no more end to the
controversy, as the parties will be litigating all over again on the same issues.

Two days after the filing of the amended answer, defendants-spouses moved for the
dismissal of the action on the ground of res judicata or bar by prior judgment.
Attached to their motion were the complaint, answer and decision in Civil Case No.
Q-10442. The court granted the motion and dismissed the action.

Appellant now assails before this Court the order of dismissal, claiming that the
principle of res judicata is not applicable, the requisite that there must be identity of
cause of action between the two cases not being present, since the case on appeal is
for annulment of the award and sale of Lot 6 to defendants-spouses while Civil Case
No. Q-10442 was for quieting of title and/or recovery of possession. Thus, the sole
issue to determine is whether or not the final judgment in Civil Case No. Q-10442 is
a bar to the case before us. This involves a question of law (Bengua vs. Abay, CA-
 G.R. No. 19408-R, July 30, 1959) which is not within the jurisdiction of this Court
to decide. It is for the Supreme Court to pass upon the issue in accordance with
Section 17 of Republic Act No. 296, as amended. Said section vests in the Supreme
Court exclusive appellate jurisdiction over cases in which only errors or questions of
law are involved."

Plaintiff-appellant, litigating this case on appeal as a pauper-litigant, contends that the trial court
erred in dismissing her complaint on the ground of res judicata. We find the contention to be
meritorious.

In determining whether the final judgment in the first case, Civil Case No. Q-10442 for quieting
of title and/or recovery of possession, constitutes res judicata as would bar the appellant's
complaint in Civil Case No. Q-11807, now subject of this appeal, for annulment of award and
deed of sale and cancellation of the certificate of title to the land, We must examine if between
these two cases the requisites of res judicata are present, namely: 1) The former judgment must
be final; 2) It must have been rendered by a court having jurisdiction over the subject matter and
over the parties; 3) It must be a judgment on the merits; and 4) There must be, between the first
and second actions, identity of parties, of subject matter and cause of action.[2] It is only in the
identity of cause of action that the parties dispute and disagree.

The term "cause of action" has been defined as "an act or omission of one 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".[3]

Is there identity of cause of action between the two aforementioned cases, the first case for
quieting of title and/or recovery of possession and the second case for annulment of award and
deed of sale and can-cellation of certificate of title? This query can be answered by a searching
look into and a careful perusal of the records of said two cases.

In the first case, the records disclose that on Sept. 16, 1966, defendant-appellee, Colonel Cirilo
V. Garcia, filed against plaintiff-appellant Urbana Velasco Aroc and Juan Alfonso Naparan the
complaint alleging that plaintiff therein is the absolute owner in fee simple of the parcel of land,
Lot No. 6, Block E-144 Piñahan Subdivision; that he acquired the land by way of purchase from
the PHHC on December 8, 1965; that said lot is now titled in the name of the plaintiff and is
covered by TCT No. 106146 of the Register of Deeds of Quezon City; that defendant therein,
Urbana Velasco Aroc, asserts a claim of ownership and right of possession to the land and in
fact still occupies the land; that defendant's claim of ownership and possession is invalid,
ineffective and prejudicial to plaintiff's title as owner in fee simple, consequently entitling
plaintiff to bring an action to remove the cloud on and to quiet his title; that defendant owns a
house constructed on the western portion of the land and refuses to demolish or remove the
same notwithstanding plaintiff's demand therefor. The above allegations state the basic or
ultimate facts which constitute complainant's cause of action.

Defendant Urbana Velasco Aroc having filed her answer on November 29, 1966 but failed to
appear at the trial of the case, judgment was rendered in favor of the plaintiff, declaring him the
rightful and legal owner of the land, and ordering defendant to vacate the premises in question
and restore possession thereof to the plaintiff plus the payment of attorneys fees and costs. The
above judgment became final and executory during the pendency of the present case.
In the second case, now subject of this appeal in Civil Case No. 11807 instituted on January 22,
1968, the plaintiff therein (Urbana Velasco Aroc) alleged that she is a bonafide occupant and
possessor of the one-half portion of Lot 6, Block E-144 Piñahan Subdivision; that she started
occupying the lot as early as 1952; that in 1956, she built her own house therein made of strong
materials, introduced improvements and fenced the area; that she applied for the award and
subsequent sale to her of the one-half portion in May, 1946, reiterated in January, 1957 and re-
applied on Feb. 3, 1966; that the lot was, however, awarded later to the defendant Cirilo V.
Garcia and his wife Feliciana Bito in bad faith, contrary to law and public policy.

The complaint further alleged that the awardees Cirilo V. Garcia and Feliciana Bito are
disqualified from purchasing Lot No. 6 because they had earlier purchased a parcel of land
formerly belonging to the PHHC, consisting of 1,450 sq. meters, known as Block 12, Lot W-8,
covered under TCT No. 31596 of the land records of Quezon City, aside from the fact that they
are already owners and possessors of several other lots in Manila and in the suburbs; and that
the award to the spouses Cirilo V. Garcia and Feliciana Bito was in violation of the charter
provisions of the PHHC. The above allegations likewise establish the ultimate facts that
constitute the cause of action of plaintiff (now the appellant), entitling her to the one-half
portion of Lot 6.

Considering now the cause of action in the first case and the cause of action in the second case,
the conclusion is inevitable that one is different from the other; that they are not one and the
same cause of action. The first seeks only to remove the cloud on the title of the land. The
action is premised on Art. 476, New Civil Code, which provides:

"Art. 476. Whenever there is a cloud on title to real property or any interest therein,
by reason of any instrument, record, claim, encumbrance or proceeding which is
apparently valid or effective but is in truth and in fact invalid, ineffective, voidable,
or unenforceable, and may be prejudicial to said title, an action may be brought to
remove such cloud or to quiet the title.

An action may be brought to prevent a cloud from being cast upon title to real
property or any interest therein."

The second seeks not only the nullification of the award and sale to the awardee, the
cancellation of the Certificate of Title, but also places in issue the power and authority of the
grantor (PHHC) to make the award and sell the land to one disqualified to purchase the same,
the awardee being a Colonel in the Armed Forces of the Philippines, as admitted by the PHHC.
[4] The qualification of the purchaser is likewise placed in issue. These issues are more basic
and fundamental than the quieting of the title and the removal of the cloud on such title.

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. It has been said that this
method is the best and most accurate test as to whether a former judgment is a bar in subsequent
proceedings between the same parties and it has even been described as infallible.[5]

Applying the test accordingly, We hold that the evidence needed to prove the allegations of the
second cause of action must necessarily be more than that in the first case for in the herein
second case, additional evidence must be adduced to prove that the PHHC acted in violation of
its charter; that the PHHC made the award in violation of the presidential directive alleged in
plaintiff's "Opposition to Motion and to Reinstate Writ of Preliminary Injunction," evidenced by
a letter dated January 12, 1967 of the President of the Philippines to the General Manager of the
People's Homesite and Housing Corporation, directing the Board of said corporation to award
the lots in the Piñahan Area, Quezon City, to the actual and bona fide occupants thereof;[6] that
the awardees have previously purchased another lot from the PHHC and were the owners of
several other lots in Manila and Quezon City which disqualified them from acquiring the lot in
controversy, evidenced by Annexes A & B.[7]

There is merit to the claim of the appellant that the legality of the award and sale of the lot in
controversy was not directly litigated in the first case not only because the defendant therein did
not appear at the trial to adduce evidence, but also because the PHHC, the grantor and vendor of
the property, was not impleaded as a party litigant in the case.

"It is also a general rule that a judgment in an action to quiet title is not conclusive as
to matters not in issue and determined, particularly where such matters could not
have been determined in such action."[8]

Since the power or authority of the PHHC was not in issue in the first case to quiet title, and
neither was the qualification of the awardee, the plaintiff therein, directly determined, the
judgment in said case is not conclusive and binding in the present case for annulment of the
award and sale, and the cancellation of the title of the awardee or purchaser.

WHEREFORE, the order appealed from issued by the Court of First Instance of Rizal in Civil
Case No. Q-11807 dated February 19, 1970 is hereby reversed and the records remanded to the
said court for further proceedings. No costs.

Petition granted.

SO ORDERED.

Makasiar, Muñoz Palma, and Fernandez, JJ., concur.

Teehankee, J., (Chairman), in the result.

________________________________________

[1] Fifth Division, Serrano, J., ponente, with Martin and Gancayco, JJ., concurring.
[2] San Diego v. Cardona, 70 Phil. 281; Valdez v. Pineda, 89 Phil. 547; Lapid v. Lawan, et al.,
101 Phil. 1243; Nator v. CIA, G.R. No. L-16671, March 30, 1962; Malvar, et al. v. Pallingayan
et al., G.R. No. L-24736, Sept. 27, 1966; Martin, Rules of Court, Vol. 2, p. 418.

[3]Ma-ao Sugar Central Company, Inc. v. Barrios, 79 Phil. 666; Caseñas v. Rosales, 19 SCRA
462; Remitere v. Vda. de Yues, 16 SCRA 251, 256.

[4] Answer of PHHC, par. 13, Rollo, p. 17.

[5] 30 Am. Jur. 918-919; Francisco, the Revised Rules of Court, Vol. II, p. 871.

[6] Rollo, p. 82.

[7] Rollo, p. 81.

[8] 50 C.J.S. 242.

Source: Supreme Court E-Library | Date created: November 25, 2014

This page was dynamically generated by the E-Library Content Management System

Supreme Court E-Library