Cebu State College of Science and Technology v. Misterio
REITERATIONFacts
The Antecedents: On December 31, 1956, Asuncion Sadaya executed a Deed of Sale for Lot 1064, an area of 4,563 square meters, in favor of Sudlon Agricultural High School (SAHS). The sale was conditional, granting Sadaya the right to repurchase the property if SAHS ceased to exist or transferred its school site. SAHS was later consolidated into the Cebu State College of Science and Technology (CSCST) by Batas Pambansa Blg. 412. The heirs of Asuncion Sadaya, the respondents, sought to exercise their right to repurchase the property, asserting that SAHS had ceased to exist due to the enactment of BP Blg. 412 and later, that the school site had been transferred. Procedural History: The respondents, as heirs of Asuncion Sadaya, first filed a complaint for nullity of sale and/or redemption in Civil Case No. CEB-15267 before the RTC of Cebu City, alleging SAHS's lack of juridical personality and its cessation of existence due to BP Blg. 412. The RTC ruled in favor of the respondents, declaring the sale void and ordering reconveyance. The CSCST appealed to the Court of Appeals (CA). While the appeal was pending, the respondents filed an amended complaint alleging the transfer of the school site. Subsequently, the CSCST executed a Deed for Reversion, ceding the property to the Province of Cebu. The CA reversed the RTC's decision in the first case, ruling that while SAHS had ceased to exist, the respondents were barred by prescription from exercising their right to repurchase. This Court affirmed the CA's decision. Thereafter, the respondents filed a second amended complaint in Civil Case No. CEB-25746, asserting their right to redeem based on the transfer of the school site. The RTC dismissed this second complaint, citing litis pendentia and forum shopping. The CA reversed the RTC's dismissal, holding that there was no identity of causes of action between the two cases. The Petition: The petitioner, CSCST, filed a petition for review on certiorari under Rule 45 of the Rules of Court, seeking to reverse the CA's decision that set aside the RTC's dismissal of the second complaint. The petitioner argues that the CA erred in reversing the RTC's order, contending that litis pendentia (or res judicata) and forum shopping barred the filing of the second complaint, as the parties, rights asserted, and reliefs sought were substantially the same as in the first case. Furthermore, the petitioner argues that the second complaint lacks a cause of action, as the transfer of the school site was in furtherance of its educational purpose and did not trigger the repurchase right. The Supreme Court, in its decision, granted the petition, reversing the CA and upholding the dismissal of the second complaint, finding that while the causes of action were different, the respondents' right to repurchase was barred by prescription, as the period for redemption could not extend beyond ten years from the execution of the deed of sale.
Issue(s)
Whether the second complaint filed by the respondents is barred by litis pendentia, res judicata, or forum shopping. Whether the respondents have a valid cause of action to repurchase the property based on the transfer of the school site, and whether such action is barred by prescription.
Ruling
The petition is GRANTED. The Decision of the Court of Appeals dated July 25, 2007, is REVERSED and SET ASIDE.
Ratio Decidendi
On the issue of litis pendentia, res judicata, and forum shopping: The Court ruled that the second complaint was not barred by litis pendentia or res judicata because there was no identity of causes of action between the first and second complaints. The first complaint was based on the suspensive condition that SAHS ceased to exist, while the second complaint was based on the suspensive condition that SAHS transferred its school site elsewhere. The Court reiterated that the test for identity of causes of action is whether the same evidence would support both claims, and in this instance, different evidence would be required to prove the cessation of existence versus the relocation of the school site. Therefore, the CA correctly found no litis pendentia or res judicata. On the issue of cause of action and prescription: Despite finding no procedural bar, the Court ruled that the respondents' cause of action based on the transfer of the school site must fail due to prescription. The Court reiterated its previous ruling that the respondents failed to exercise their right to repurchase within the four-year period from June 10, 1983 (the effectivity of BP Blg. 412), which barred them by prescription. The Court emphasized that even if the second suspensive condition (transfer of school site) occurred, the exercise of the right to repurchase is still subject to the prescriptive periods set by Article 1606 of the New Civil Code. The Court noted that allowing redemption nearly forty-one years after the initial sale would contravene the public policy against prolonged uncertainty in property titles, as established in jurisprudence since Rosales v. Reyes (1913). The Court stressed that the freedom to contract is not absolute and stipulations contrary to law, morals, good customs, public order, or public policy are void. Therefore, the respondents could not circumvent the prescriptive periods by relying on the second suspensive condition when they had already lost their right to repurchase due to their failure to act within the prescribed time.
Main Doctrine
The exercise of the right to repurchase, even if based on a separate suspensive condition, is subject to the prescriptive periods provided by law, and cannot be extended indefinitely to circumvent the spirit and intent of laws that limit the uncertainty of property titles.