BUAZON V CA (BAGONG BARRIO HOUSING COOPERATIVE, INC) 220 SCRA 182 NOCON; March 19, 1993

NATURE Petition for review decision of CA FACTS - background: there is a 1-storey building in Caloocan claimed to be owned by Bagong Barrio Coop (coop) on the one hand, and Buazon on the other. It appears that the said building was constructed at the initiative of the then president of the coop, Buazon. The expenses for the construction were defrayed by Cabal (a director of the coop), but were later returned and paid by the coop through monthly rentals. First case: 2 ejectment cases filed by Buazon in the MTC against the tenants of the building. The right of Buazon over the property was put in issue (the tenants claiming that the building was owned by the coop, and that the coop sold this to them). During pendency, the coop became an active party, as a witness and testified in favor of the tenants. -MTC: declared Buazon to be the owner and lessor of the premises -tenants appealed to RTC (affirmed MTC). Judgment became final and executory; but before execution, tenants instituted two civil cases against Buazon in the RTC (complaint for ownership and damages, with prayer for writ of prelim injuction). RTC issued initially a restraining order on the writ of execution issued by MTC, but after hearing denied prayer for writ of prelim injunction. Tenants filed petition for certiorari in IAC (dismissed), elevated to SC (denied). Thus, tenants vacated the premises. The premises were then leased out by Buazon to 2 new tenants. Second Case: Santos, as secretary and representative of the coop, filed in MTC a complaint for unlawful detainer against Buazon and his new tenants, alleging that the coop was the owner of the building, and that the occupation was without the coops authority. -answer of Buazon: denied allegations of complaint, set up affirmative defense that complaint was already barred by previous judgment, and challenged legal existence of the Coop. - MTC: judgment (pursuant to Rule on Summary procedure) in favor of coop, ordering Buazon et al., to vacate the premises and surrender possession. Buazon appealed to RTC (defense: res judicata) RTC: reversed MTC. (sustained res judicata). Coop appealed to CA. CA: reversed RTC (reinstated MTC decision). BUazon brought this to SC ISSUE 1. WON the second case is barred by previous judgment HELD 1. NO. Principle of res juidcata does not apply against the coop. Ratio The coop cannot be bound by a decision wherein it was not a party even assuming that it was well aware of the pendency of said action

Reasoning Records show that the coop was never impleaded as a party, whether as a defendant, or a 3rd party defendant, or a defendant on a counterclaim or on cross claim, or has intervened in first case. Neither were they successors-in-interest or a real party in interest in said actions since the coop became the owner of the property in dispute from the time the full payment of the cost of construction has been completed. Consequently, the coop cannot be bound by a decision wherein it was not a party even assuming that it was well aware of the pendency of said action. Very likely the result of the (first) case would have been different had the coop been given an opportunity to protect its interest. -citing the decision of the CA: Furthermore, there is no way we can consider (the coop) a party in interest in the civil actions considering that the coop did not stand to be prejudiced or benefited by whatever outcome of the case and even the rights and obligations of the parties arising therefrom are absolutely distinct from that of the coop. Significantly, the decision in (first case), declaring Buazon the owner and lawful possessor of the disputed property is a judgment good only as far as (the first tenants) are concerned, it appearing that only the rights and obligations of these parties were involved. (Thus,) the decision of the court in the actions is a judgment good only as against (the first tenants) and should not in any way be construed to affect persons not privy to said actions. Even if We assume that in the earlier decisions, Buazon was declared to be the owner and entitled to possess the building as against defendants (first tenants) therein, said decision is not conclusive as to the title or issue of ownership. Sec. 7, Rule 70, ROC expressly provides: The judgment rendered in an action for forcible entry or detainer shall be effective with respect to the possession only and in no wise bind the title or affect the ownership of the land or building. It is a fundamental rule that the doctrine of res judicata and conclusiveness of judgment apply in ejectment suits, but subject to the qualification that the judgment therein is conclusive only with respect to the issue of material possession of the premises but not with respect to ownership and other facts. (penalosa v Tuazon) Obviously, the decision adjudging Buazon as the owner and lawful possessor of the premises cannot be used as a defense against the claim of the coop. Firstly, said judgment cannot bind the coop, because the declaration of the court is conclusive only as to the issue of material possession and not ownership. Secondly, the coop is not in any way bound by the earlier decisions, not being a party in said actions. Disposition Petition dismissed. Decision of Ca affirmed