Aroc v. People's Homesite & Housing Corp.
REITERATIONFacts
The Antecedents: Plaintiff-appellant Urbana Velasco Aroc and her family occupied one-half of Lot 6, Block E-144, Pinahan Subdivision, Quezon City, since 1956, constructing a house and planting fruit-bearing trees. She filed applications for the award and sale of this portion in 1956 and 1957, which were later discovered missing. She reapplied on February 3, 1966. However, the lot was awarded and sold to defendants-appellees Cirilo B. Garcia and Feliciana Bito, who allegedly were disqualified from purchasing it as they had previously bought a lot from the People's Homesite and Housing Corporation (PHHC) and already owned several lots in Greater Manila. Plaintiff protested the award to the PHHC Board, and the investigating officer recommended rescission and award to plaintiff and Alfonso Naparan. Despite this, PHHC executed a deed of sale in favor of the Garcias, and a Transfer Certificate of Title was issued to them. Procedural History: Plaintiff filed a complaint (Civil Case No. Q-11807) to declare the award and sale null and void and to cancel the title. The defendants-spouses Garcia filed an amended answer, alleging that a prior case (Civil Case No. Q-10442) between the same parties for quieting of title and/or recovery of possession had been filed, wherein judgment was rendered in favor of Cirilo B. Garcia. Based on this, the defendants moved for dismissal on the ground of res judicata, which the trial court granted. Plaintiff appealed the dismissal order. The Petition: The plaintiff-appellant assails the dismissal order, arguing that the principle of res judicata is not applicable due to the lack of identity of the cause of action between the two cases.
Issue(s)
Whether the final judgment in the first case (quieting of title/recovery of possession) constitutes res judicata as to bar the second case (annulment of award and sale and cancellation of title).
Ruling
The Court reversed the order of dismissal, finding that the principle of res judicata is not applicable. The records were remanded to the Court of First Instance for further proceedings.
Ratio Decidendi
On Issue 1: The Court ruled that res judicata does not apply because there is no identity of cause of action between the two cases. Applying the 'Same Evidence Test,' the Court found that the second action for annulment of sale requires additional and different evidence that was not necessary in the first case for quieting of title. Specifically, Aroc must prove that the People's Homesite and Housing Corporation (PHHC) acted in violation of its charter and presidential directives, and that the awardees were disqualified purchasers due to their existing landholdings. The first case focused strictly on Article 476 of the New Civil Code regarding clouds on title, while the second case attacks the very power and authority of the PHHC to make the award. Furthermore, the PHHC was not even impleaded as a party in the first case, and the legality of the award was not directly litigated since Aroc did not appear at the trial of the first case. Therefore, the 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 the original action.
Main Doctrine
A final judgment in an action for quieting of title and/or recovery of possession does not constitute res judicata to bar a subsequent action for annulment of award and deed of sale and cancellation of title if the causes of action are different, particularly when the latter action involves issues not litigated or determined in the former, such as the legality of the award, the violation of the grantor's charter provisions, and the disqualification of the awardees.