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RUFINA C. CAYANA, JOSEFINA C. RABINA, MERCEDES C.

DE GUZMAN, and SUSANA By: ZAF


C. SAMBALE vs COURT OF APPEALS, SPS. PASTOR & ROSITA CAYABYAB, SPS. Topic: Execution of
MARCELIANO & ROSALIA CAYABYAB, SPS. RAFAEL & ROSEMARIE CAYABYAB and Judgment
INSURANCE CORP. OF THE PHILIPPINES
GR No. 125607
Date: March 18, 2004
Facts:
Raymundo Cayabyab, with the marital consent of Eulalia, sold the First and Second Parcels to Pastor Cayabyab by virtue
of two Deeds of Absolute Sale. Thereupon, Transfer Certificates of Title covering the First and Second Parcels,
respectively, were issued in the name of Pastor Cayabyab.
After the death of Raymundo Cayabyab on March 20, 1976, his wife Eulalia Cayabyab executed an Affidavit of Adverse
Claim on the subject parcels of land, alleging that the Deeds of Absolute Sale in favor of Pastor Cayabyab were forgeries.
However, she executed another Affidavit recognizing Pastor Cayabyabs title and requesting the cancellation of the
adverse claims earlier annotated on the titles of the subject properties.
In 1977, Eulalia Cayabyab, together with her children filed a Complaint against Pastor and Rosita Cayabyab for
the annulment of the Deeds of Absolute Sale and the corresponding TCT, and reconveyance of the First and
Second Parcels. They alleged that both parcels were fraudulently registered in the name of Pastor Cayabyab by
means of the forged Deeds of Absolute Sale.
Thereafter, Pastor and Rosita Cayabyab entered into an agreement of counter guaranty with the Insurance Corporation
of the Philippines (ICP) with respect to the Second Parcel.
Pastor Cayabyab mortgaged the First Parcel to the Rural Bank of Urbiztondo. Then Pastor Cayabyab sold the First Parcel
to Rosafina Reginaldo by virtue of a Deed of Absolute Sale. Subsequently, the TCT was cancelled and a new one was
issued in the name of Rosafina Reginaldo. The mortgage over the First Parcel was cancelled.
Meanwhile, the proceedings in civil Case proceeded. Pastor and Rosita Cayabyab filed an Answer asserting the validity
of the Deeds of Absolute Sale but were subsequently declared in default after failing to appear at the pre-trial conference.
Court of First Instance declared the Deeds of Absolute Sale and the corresponding TCTs covering the Second and
First Parcels, respectively, null and void. The court, however, denied the prayer for reconveyance in view of the
plaintiffs evidence attesting to the fact that Eulalia Cayabyab is still the owner and possessor of the subject
properties. No appeal was taken and the decision consequently became final.
On April 21, 1981, the mortgage over the First Parcel was foreclosed and the Rural Bank of Urbiztondo, as the highest
bidder, bought the property. The bank consolidated its title a new TCT was issued in its name in 1982. In a Deed of
Absolute Sale dated September 3, 1982, the Rural Bank of Urbiztondo sold the First Parcel to Marceliano and Rosalia.
Marceliano and Rosalia Cayabyab sold the First Parcel to Rafael and Rosemarie Ramos by virtue of a Deed of Absolute
Sale of Real Estate Property. A new TCT was issued in the name of the Ramos spouses.
In 1983, the petitioners herein as plaintiffs, filed with the Regional Trial Court a Verified Complaint against Pastor
and Rosita Cayabyab, Marceliano and Rosalia Cayabyab, Rafael and Rosemarie Ramos and ICP. They prayed
for the annulment of the deeds of sale in favor of Rosafina Reginaldo, Marceliano and Rosalia Cayabyab, and
Rafael Ramos and Rosemarie Cayabyab; cancellation of the 4 TCTs issued in favor of Rosafina Reginaldo, the
Rural Bank of Urbiztondo, Marceliano and Rosalia Cayabyab and Rafael and Rosemarie Ramos, respectively;
and recovery of possession of the First and Second Parcels by virtue of an alleged deed of donation inter vivos
purportedly executed by Eulalia Cayabyab in favor of the petitioners herein.
Trial court rendered its decision in the second civil case in favor of the plaintiffs.
The respondents herein as appellants appealed to the Court of Appeals, contending that the trial court erred in applying
the principle of res judicata to the judgment in first civil case. According to them, the institution of the second civil case
resulted in the joinder of issues and allowed them to adduce evidence to prove ownership and possession of the subject
parcels of land.
Appellate court held that the principle of res judicata is inapplicable, there being no identity of the causes of action
in the first and second civil case. While both cases were for the annulment of public documents, the former
covered only the Deeds of Absolute Sale and the corresponding TCTs for the First and Second Parcels. On the
other hand, the latter case covered not only the annulment of the subsequent transactions over the subject parcels
of land but also the recovery of possession on the basis of the alleged deed of donation inter vivos executed by
Eulalia Cayabyab.

Issue/s
Whether or not the decision on the first civil case constitutes a bar to the defenses and claims of respondents in the second case?
YES (under the doctrine of conclusiveness of judgment)
Ruling:

The trial court and the appellate court both erred in the manner by which they treated and applied the final decision in the first
civil case to the instant case. This error apparently stems from a misreading of the provisions in the 1997 Rules of Civil Procedure
on the effect of judgments. Section 47, Rule 39.

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. 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 CA,
the third requisite for the application of res judicata is not present in this case.

In order to determine the identity of the causes of action in the first and second civil case, and consequently, the application of
the doctrine of res judicata, it is essential to consider the identity of facts essential to their maintenance, or whether the same
evidence would sustain both causes of action. If the same facts or evidence would sustain both, the two actions are considered the
same and covered by 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 fact, 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.

We find that the evidence required to prove the allegations in the second civil case, which involves the annulment of the
subsequent transactions and TCTs covering the subject parcels of land and the recovery of possession thereof on the basis of the
alleged deed of donation inter vivos, is necessarily more than that required in first civil case, which involves only the annulment
of the Deeds of Absolute Sale in favor of Pastor Cayabyab and the corresponding TCTs covering the First and Second Parcels.
Furthermore, the decision in the first civil case necessarily turned only upon whether the Deeds of Absolute Sale were fictitious
or simulated, while that in second civil case will also have to include a determination of the good or bad faith of the subsequent
purchasers. Res judicata, therefore, does not apply.

Nonetheless, the trial court and the Court of Appeals should have applied the doctrine of conclusiveness of judgment, this
doctrine states that 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.

Under this doctrine, the final decision in first civil case precluded the CA from further adjudicating on the validity of the said
deeds and titles. It is likewise utterly erroneous for the appellate court to have disregarded the final judgment in the first civil case
declaring null and void the Deeds of Absolute Sale in favor of Pastor Cayabyab and the corresponding TCTs covering the two
parcels of land. It is axiomatic that decisions which have long become final and executory cannot be annulled by courts and the
appellate court is deprived of jurisdiction to alter the trial courts final judgment.

Decision of CA is reversed and the decision of the RTC is reinstated but with the modification.
Doctrine Notes:
SEC. 47. Effect of judgments or final orders.The effect of a judgment or final order rendered by a court of the Execution before or
Philippines, having jurisdiction to pronounce the judgment or final order, may be as follows: after death of
judgment obligor will
(a) In case of a judgment or final order against a specific thing, or in respect to the probate of a will, or the depend on the nature
administration of the estate of a deceased person, or in respect to the personal, political, or legal condition or status of the judgment, i.e.
of a particular person or his relationship to another, the judgment or final order is conclusive upon the title to the recovery of property v
thing, the will or administration, or the condition, status or relationship of the person; however, the probate of a money judgments.
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.