Viray v. Usi
REITERATIONFacts
The Antecedents: The case involves several parcels of land originating from Lot No. 733, registered in the name of Ellen P. Mendoza. On April 28, 1986, a subdivision plan (Fajardo Plan) divided Lot 733 into six smaller lots. The following day, Mendoza sold Lot 733-F to Jesus Viray and Lot 733-A to spouses Avelino and Margarita Viray (Sps. Viray). These deeds of sale were notarized but not annotated on the title. Subsequently, on August 20, 1990, Mendoza, Emerenciana M. Vda. de Mallari, and respondents Spouses Jose and Amelita Usi (Sps. Usi) executed a Subdivision Agreement (1st SA) based on a different subdivision plan (Galang Plan), dividing Lot 733 into three lots: Lot 733-A to Mallari, Lot 733-B to Sps. Usi, and Lot 733-C to Mendoza. Derivative titles were issued accordingly. On April 5, 1991, another Subdivision Agreement (2nd SA) further subdivided Lot 733-C into 13 smaller lots, with Sps. Usi receiving Lots 733-C-1 and 733-C-10. This resulted in Sps. Usi obtaining titles for Lots 733-B, 733-C-1, and 733-C-10. An ocular inspection and survey revealed that Lot 733-A (Fajardo Plan) sold to Sps. Viray was within Lot 733-B (Galang Plan) awarded to Sps. Usi, and Lot 733-F (Fajardo Plan) sold to Jesus Viray largely overlapped with lots awarded to Mendoza and Sps. Usi. This led to multiple legal disputes. Procedural History: Several cases were filed: (a) annulment of deeds of sale for Lots 733-A and 733-F, which were dismissed by the RTC and affirmed by the CA and Supreme Court (G.R. No. 122287); (b) a forcible entry case filed by Jesus Viray against Sps. Usi for Lot 733-F, decided in favor of Viray and became final; (c) a petition for annulment of the MCTC decision in the forcible entry case, filed by Sps. Usi, which was dismissed by the RTC and CA, and denied by the Supreme Court (G.R. No. 154538); (d) an accion publiciana/reivindicatoria filed by Sps. Usi against Vda. de Viray (as Jesus Viray's successor) for Lots 733-B, 733-C-1, and 733-C-10, which was dismissed by the RTC; and (e) an action for cancellation of titles filed by Vda. de Viray against Sps. Usi and others. The RTC dismissed Sps. Usi's accion publiciana/reivindicatoria in Civil Case No. 01-1118(M). On appeal, the Court of Appeals (CA) reversed the RTC decision, declaring Sps. Usi as legal owners of Lots 733-B, 733-C-1, and 733-C-10. Petitioners assailed the CA decision. The Petition: Petitioners Ruperta Cano Vda. de Viray and Jesus Carlo Gerard Viray filed a petition for review on certiorari before the Supreme Court, assailing the CA's decision that declared Sps. Usi as legal owners of the disputed lots.
Issue(s)
Whether the Court of Appeals gravely erred in reversing and setting aside the Decision of the RTC dismissing respondents’ petition for accion publiciana/reivindicatoria, considering the validity of the subdivision agreements and prior deeds of sale. Whether the two subdivision agreements constituted valid partitions among co-owners, and whether the subsequent conveyances to Sps. Usi constituted a valid sale. Whether the prior deeds of absolute sale for Lots 733-A and 733-F were valid and effective conveyances, and whether the principle of double sale applies. Whether the principle of res judicata applies to bar the respondents' claims.
Ruling
The Supreme Court granted the petition, reversed and set aside the Court of Appeals' decision, and reinstated the Regional Trial Court's decision dismissing the respondents' petition. The Court ruled in favor of the petitioners.
Ratio Decidendi
On the CA's reversal of the RTC decision, and the validity of the subdivision agreements as partitions: The Court found that the CA erred in reversing the RTC's dismissal of the Sps. Usi's petition. The CA's reliance on the validity of the subdivision agreements and the certificates of title of Sps. Usi was misplaced, as these were found to be based on invalid partitions and subsequent conveyances that were either disguised sales or affected by prior valid sales. The Court held that the CA erred in considering the subdivision agreements as valid partitions of co-owners' pro-indiviso shares because the respondents failed to substantiate their claim of co-ownership. On the validity of the subdivision agreements as valid sales transactions: The Court found that the subsequent conveyances to Sps. Usi through the subdivision agreements, which covered substantially the same portions of Lot 733 already sold to petitioners' predecessors-in-interest, constituted a double sale. However, the Court clarified that the subdivision agreements were not valid sales transactions under Article 1544 of the Civil Code because they lacked the essential elements of a contract of sale, particularly a valid cause or consideration for the transfer of title to Sps. Usi. Therefore, the prior deeds of sale in favor of petitioners' predecessors-in-interest held superior rights. On the validity of the April 29, 1986 Deeds of Absolute Sale: The Court affirmed the validity of the deeds of absolute sale executed by Mendoza on April 29, 1986, conveying Lot 733-A to Sps. Viray and Lot 733-F to Jesus Viray. These conveyances were prior in time to the subdivision agreements and were upheld by final and executory decisions of the RTC, CA, and Supreme Court in previous cases (G.R. No. 122287). On the application of res judicata: The Court ruled that the principle of res judicata barred the Sps. Usi's claims. The validity of the April 29, 1986 deeds of sale and the ownership and possessory rights of Sps. Viray and Vda. de Viray over Lots 733-A and 733-F had been definitively settled in prior final and executory judgments (G.R. No. 122287 and G.R. No. 154538). These judgments precluded the relitigation of the same issues of ownership and possession between the same parties.
Main Doctrine
The Court of Appeals erred in reversing the RTC decision. The subdivision agreements were not valid partitions among co-owners but disguised conveyances. Prior valid deeds of absolute sale, coupled with final and executory judgments upholding their validity and possessory rights, established petitioners' superior claim. The principle of res judicata barred the respondents' accion publiciana and accion reivindicatoria.