Cayana v. Cayabyab
REITERATIONFacts
The Antecedents: The underlying dispute concerns two parcels of land in Rosario, Lingayen, Pangasinan. Raymundo Cayabyab, with his wife Eulalia's consent, sold these parcels to their son, Pastor Cayabyab, through two Deeds of Absolute Sale in 1965 and 1976. Following Raymundo's death, Eulalia initially filed an Affidavit of Adverse Claim alleging forgery of the sale documents but later executed an Affidavit recognizing Pastor's title and requesting the cancellation of the adverse claims. Subsequently, Eulalia and several of her children filed a complaint against Pastor and his wife, seeking the annulment of the deeds of sale and the corresponding Transfer Certificates of Title (TCTs), and reconveyance of the properties, alleging fraudulent registration through forged deeds. Procedural History: The initial complaint, Civil Case No. 15298, resulted in a decision by the Court of First Instance declaring the deeds of sale and TCTs in favor of Pastor Cayabyab null and void, though reconveyance was denied. This decision became final as no appeal was filed. Later, the petitioners herein, as plaintiffs, filed a new case, Civil Case No. 15937, seeking the annulment of subsequent deeds of sale and TCTs related to the first parcel, and recovery of possession based on an alleged deed of donation inter vivos from Eulalia Cayabyab. The Regional Trial Court ruled in favor of the petitioners, annulling the subsequent transactions and declaring the petitioners as owners. However, the Court of Appeals reversed this decision, finding res judicata inapplicable and upholding the validity of the subsequent deeds and TCTs, stating the petitioners failed to prove their claim of ownership via the donation. The Petition: The petitioners, Rufina C. Cayana and others, seek review of the Court of Appeals' decision. They argue that the final judgment in Civil Case No. 15298, which declared the original deeds of sale and TCTs in favor of Pastor Cayabyab null and void, should have barred the respondents from litigating the validity of these transactions and subsequent transfers. They contend that the subsequent purchasers were not in good faith, citing Marceliano Cayabyab's prior involvement in Civil Case No. 15298 and other related cases. The petitioners also reassert their claim of ownership based on an alleged deed of donation inter vivos from Eulalia Cayabyab. The core of their petition is that the appellate court erred in not applying the principle of res judicata or conclusiveness of judgment to the final decision in the earlier case, thereby allowing the relitigation of issues already settled.
Issue(s)
Whether the decision in Civil Case No. 15298 operates as res judicata to bar the respondents' defenses and counterclaims in Civil Case No. 15937, and whether the doctrine of conclusiveness of judgment applies to the final decision in Civil Case No. 15298. Whether the subsequent purchasers of the First Parcel were purchasers in good faith. Whether the alleged deed of donation inter vivos executed by Eulalia Cayabyab in favor of the petitioners is valid and enforceable, and consequently, the determination of property ownership.
Ruling
The Supreme Court reversed the decision of the Court of Appeals and reinstated the decision of the trial court, with the modification that the First and Second Parcels should be included in the estate of Raymundo and Eulalia Cayabyab and partitioned according to law. The Court found that while res judicata did not apply, the doctrine of conclusiveness of judgment did. It also found that the subsequent purchasers were not purchasers in good faith, and that the deed of donation inter vivos was not formally offered in evidence.
Ratio Decidendi
On the applicability of res judicata and conclusiveness of judgment: The Court held that while res judicata did not apply due to the difference in causes of action between Civil Case No. 15298 (annulment of original deeds) and Civil Case No. 15937 (annulment of subsequent deeds and recovery of possession based on donation), the doctrine of conclusiveness of judgment was applicable. The final decision in Civil Case No. 15298, which declared the original deeds of sale and corresponding TCTs in favor of Pastor Cayabyab null and void, conclusively settled the issue of their validity. The appellate court erred in disregarding this final judgment, as it was deprived of jurisdiction to alter a final and executory decision. The principle of conclusiveness of judgment dictates that a fact or question judicially passed upon and determined by a competent court is conclusively settled between the parties and their privies and cannot be relitigated, even on a different cause of action. On the status of subsequent purchasers: The Court found that the subsequent purchasers of the First Parcel (Rosafina Reginaldo, Rural Bank of Urbiztondo, Marceliano and Rosalia Cayabyab, and Rafael and Rosemarie Ramos) were not purchasers in good faith. Rosafina Reginaldo purchased during the pendency of Civil Case No. 15298 and was a defendant in another related case. The Rural Bank of Urbiztondo became a mortgagee and later purchased the property during foreclosure after Civil Case No. 15298 had been filed and decided. Marceliano Cayabyab was a plaintiff in Civil Case No. 15298 and also involved in another related case, thus sealing his knowledge of the petitioners' claim. Rafael and Rosemarie Ramos, as successors-in-interest, could not feign ignorance of the proceedings and the final decision. The familial relationship among the parties further supported the conclusion that their assertion of lack of knowledge was a mere pretext. On the deed of donation inter vivos and property ownership: The Court ruled that the alleged deed of donation inter vivos could not be upheld because it was not formally offered in evidence. While the petitioners' witnesses testified about its existence and attached a copy as an annex to their petition, the original or certified true copy was not formally presented and offered during the trial. The Court emphasized the rule that evidence not formally offered cannot be considered by the court. Therefore, the petitioners failed to prove their claim of ownership based on this donation. Given that the original deeds of sale in favor of Pastor Cayabyab were declared null and void, and the subsequent purchasers were not in good faith, and the deed of donation was not properly proven, the Court concluded that the First and Second Parcels rightfully belonged to the estate of Raymundo and Eulalia Cayabyab. These properties were ordered to be partitioned in accordance with the law on succession.
Main Doctrine
While the principle of res judicata may not apply due to the difference in the causes of action between two cases, the doctrine of conclusiveness of judgment mandates that a fact or question judicially passed upon and determined by a court of competent jurisdiction is conclusively settled and cannot be relitigated. Subsequent purchasers, even if they claim to be in good faith, are bound by a prior final judgment declaring the original deeds of sale and titles null and void, especially if they are successors-in-interest who purchased during the pendency of litigation or after a decision had been rendered.