Lazo v. Tuason
REITERATIONFacts
The Antecedents: Francisca Lazo purchased 500 square meters of land in Barrio Tatalon, Quezon City, from the late Agustin de Torres on November 17, 1949. This land was part of the Tatalon Estate, which was later the subject of a compromise agreement on March 16, 1953, between the Deudors and J. M. Tuason & Co., Inc. Under this agreement, J. M. Tuason & Co. agreed to recognize contracts of sale entered into by the Deudors, allowing Deudor buyers to continue their contracts by paying current prices under conditions set by J. M. Tuason & Co. Procedural History: On March 23, 1957, J. M. Tuason & Co., Inc. filed an ejectment suit against Lazo. The Court of First Instance (CFI) ruled in favor of J. M. Tuason & Co., ordering Lazo to vacate, remove constructions, and pay monthly rentals. After the judgment became final, an execution was ordered. Lazo's motion to stay execution was denied, and her subsequent appeal was disallowed by the CFI. A petition for mandamus with preliminary injunction filed with the Court of Appeals (CA) to compel the CFI to approve her appeal was dismissed by the CA, holding that an order of execution of a final judgment is not appealable. Subsequently, a writ of demolition was issued against Lazo. She moved to stay its enforcement and was given until April 1, 1962, to vacate voluntarily. Lazo then filed a petition for prohibition with preliminary injunction with the CA to enjoin the enforcement of the decision and the demolition order, but the CA again denied her petition, stating that prohibition would not lie to restrain the enforcement of a final and executory judgment, and a writ of certiorari could not review the denial of a motion to suspend execution or an order of demolition. The Petition: On March 27, 1962, Lazo filed a new suit before the CFI seeking to annul the judgment in the ejectment case based on fraud. She also sought to enjoin its execution and declare the execution and demolition orders null and void. Additionally, she prayed for specific performance, asking J. M. Tuason & Co., Inc. to execute a deed of sale in her favor at P7.00 per square meter, as per the compromise agreement. Lazo alleged fraud, claiming she was assured the case was a mere formality and would not be executed against her, leading her not to appeal or vacate the premises. J. M. Tuason & Co., Inc. moved for dismissal, arguing no cause of action or that the action was barred by prior judgment. The CFI dismissed the case, finding no cause of action based on the ruling in J. M. Tuazon & Co. v. Sanvictores and interpreting Lazo's request for an extension to vacate as an admission of acquiescence. Lazo appealed this dismissal to the CA, which certified the case to the Supreme Court on a question of law.
Issue(s)
Whether the complaint for annulment of judgment based on fraud stated a sufficient cause of action. Whether the action was barred by prior judgment or res judicata. Whether Lazo was guilty of laches or undue delay in asserting her rights.
Ruling
The Supreme Court affirmed the order of dismissal. The Court found that Lazo unduly delayed in asserting her claim of fraud, particularly from the time the execution order was issued until she filed the annulment suit. Her actions, including requesting an extension to vacate, indicated acquiescence to the judgment. The claim for specific performance was deemed barred by res judicata as it should have been raised as a compulsory counterclaim in the prior ejectment case.
Ratio Decidendi
On the sufficiency of the cause of action for annulment of judgment based on fraud: The Court held that Lazo's complaint for annulment of judgment based on fraud was subject to dismissal for lack of cause of action or abandonment thereof due to laches. While Lazo claimed she did not appeal or vacate due to assurances that the judgment would not be executed, the issuance of an execution order on January 12, 1961, should have alerted her to the intent to eject her, disregarding any alleged assurances. Her subsequent request for an extension until April 1, 1962, to vacate the premises was interpreted as an admission of acquiescence to the judgment against her. The undue delay from at least January 12, 1961, up to March 27, 1962, despite the continuous threat of ejectment, militated against her case and indicated a want of merit. Laches, or unreasonable delay in enforcing a right, can be destructive of the right itself. These considerations negated the need for further discussion on the issues raised regarding the annulment of the judgment on the ground of fraud. On the issue of bar by prior judgment (res judicata) and compulsory counterclaim: The Court ruled that the portion of Lazo's complaint seeking to enforce an alleged preferential right to buy the land under the compromise agreement was barred by res judicata. This claim should have been interposed as a compulsory counterclaim in the prior ejectment case, Civil Case No. Q-4193. Citing De Jesus v. J. M. Tuason & Co., the Court reiterated that claims that should have been set up as compulsory counterclaims are barred if not raised in the original action. Therefore, Lazo could no longer pursue this claim in a separate suit for annulment of judgment. On the procedural history and Lazo's actions: The Court noted that Lazo's attempts to prevent the execution of the final judgment through various petitions (mandamus, prohibition) were consistently denied by the Court of Appeals. These denials underscored the finality and executory nature of the judgment in Civil Case No. Q-4193. Her subsequent filing of a new suit for annulment of judgment, after multiple failed attempts to stay execution and demolition, was seen as a dilatory tactic. The Court emphasized that the writ of demolition issued on January 27, 1962, should have definitively dispelled any reliance on alleged assurances contrary to the execution of the judgment. Her request for a stay of demolition and an extension to vacate further supported the conclusion that she had acquiesced to the judgment.
Main Doctrine
A complaint for annulment of judgment based on fraud is subject to dismissal for lack of cause of action or abandonment thereof due to undue delay in asserting the right, especially when the plaintiff's actions indicate acquiescence to the judgment sought to be annulled. A claim for preferential right to buy land, if it should have been interposed as a counterclaim in a prior case, is barred by res judicata.