Manalo v. Herarc Realty
REITERATIONFacts
The Antecedents: The case involves the Rosegold Resort, formerly registered to RAB Realty Corporation, which was the subject of collection cases filed by Arlene M. Bedayo, et al. against Spouses Saturnino and Rosario Baladjay. The RTC Makati ordered Spouses Baladjay to pay the collection amount and subsequently issued a writ of execution, setting an execution sale of the Rosegold Resort. Concurrently, creditors filed a petition for involuntary insolvency against Spouses Baladjay, leading the RTC Muntinlupa to issue a Stay Order enjoining the execution sale. Despite the Stay Order, the RTC Makati proceeded with the execution sale, with Herarc Realty Corporation declared the highest bidder. The RTC Muntinlupa declared Spouses Baladjay insolvent and appointed Dr. Rafael A. Manalo as receiver. After the redemption period lapsed, Herarc Realty consolidated ownership and obtained a Writ of Possession from the RTC Makati. Petitioners, as assignees in the insolvency proceedings, filed a motion to declare the auction sale, consolidation of ownership, and subsequent titles null and void. The RTC Muntinlupa issued a Break-Open Order directing Herarc Realty to vacate the resort. Herarc Realty filed a petition in the CA, which annulled the RTC Muntinlupa Break-Open Order and excluded the Rosegold Resort from the insolvency proceedings. This CA decision was affirmed by the Supreme Court. Subsequently, petitioners filed a Complaint for annulment of titles in the RTC Batangas, seeking to cancel Herarc Realty's titles based on alleged nullity of the execution sale, bad faith of Herarc Realty, inadequate price, and irregularities. Herarc Realty moved for the dismissal of the Batangas Complaint based on res judicata and lack of cause of action, which the RTC Batangas initially denied but later granted after taking judicial notice of subsequent court judgments, including the CA Decision in CA-G.R. SP No. 110088 which upheld the execution of the judgment excluding the Rosegold Resort from insolvency proceedings. Procedural History: The RTC Batangas initially denied Herarc Realty's motion to dismiss the annulment complaint. However, upon Herarc Realty's Omnibus Motion for judicial notice of subsequent court rulings, the RTC Batangas reconsidered and set aside its earlier denial, dismissing the Batangas Complaint on the ground of conclusiveness of judgment. The Court of Appeals affirmed the dismissal. The present petition assails the CA's decision. The Petition: Petitioners seek to reverse the CA's affirmation of the dismissal of their Batangas Complaint, arguing that the CA committed reversible error in applying the doctrine of conclusiveness of judgment.
Issue(s)
Whether the Court of Appeals committed reversible error in affirming the dismissal of the Batangas Complaint on the ground of conclusiveness of judgment, encompassing issues related to the Stay Order, the validity of the execution sale, and the corresponding issuance of TCTs to Herarc Realty on the Rosegold Resort. Whether the petitioners are barred by res judicata or conclusiveness of judgment from relitigating issues already passed upon by competent courts, specifically concerning the Stay Order, the validity of the execution sale, and the issuance of TCTs to Herarc Realty.
Ruling
The petition is devoid of merit. The Court of Appeals did not commit reversible error in affirming the dismissal of the Batangas Complaint on the ground of conclusiveness of judgment. The issues raised by the petitioners have already been passed upon with finality in previous proceedings.
Ratio Decidendi
On the issue of conclusiveness of judgment and related issues: The Court held that the principle of conclusiveness of judgment bars the relitigation of particular facts or issues in another proceeding between the same parties on a different claim or cause of action. The issues concerning the Stay Order, the validity of the execution sale, and the issuance of TCTs to Herarc Realty were continuously raised in several motions and petitions before different courts, including the CA and the Supreme Court. These issues must be laid to rest and cannot be relied upon by petitioners again as a basis for the annulment of Herarc Realty's titles. The Court emphasized that the ownership of Herarc Realty over the Rosegold Resort was settled when the issue on the validity of the execution sale and the subsequent consolidation of title was resolved. The petitioners' repeated disputes over the legality of the execution sale and Herarc Realty's purchase, despite having withdrawn their motion to quash the writ of possession before the RTC Makati and their subsequent recourse to the RTC Muntinlupa, bound them to the court's final resolution, allowing res judicata to set in. More importantly, all issues surrounding the execution sale should have been raised with the RTC Makati, as the court of origin with exclusive jurisdiction over its judgment and its execution, to the exclusion of all other coordinate courts. The filing of a separate action for or in connection with a mere incident of a case pending before a branch of a court is barred; the proper remedy must be obtained in the prior case by proper motion and application. The Court reiterated that the execution of the RTC Makati judgment, having been carried out, could not be nullified in a new and separate action before the RTC Batangas, another court of coordinate jurisdiction. Petitioners' actions, including their withdrawal of motions and their recourse to the RTC Muntinlupa, led to conflicting orders from coordinate courts, hindering justice. The Court also noted that the petitioners, as assignees/receivers, were duty-bound to preserve assets and protect creditors' interests in all proceedings, and their failure to act vigilantly before the proper court constituted laches and estoppel. The exclusion of the Rosegold Resort from the insolvency proceedings had also been settled with finality, reinforcing the conclusion that the Batangas Complaint aimed to resurrect long-resolved issues. On the issue of res judicata and relitigation of settled issues: The Court found that the petitioners are barred by res judicata or conclusiveness of judgment from relitigating issues already passed upon by competent courts. The issues concerning the Stay Order, the validity of the execution sale, and the issuance of TCTs to Herarc Realty have been definitively resolved in prior proceedings. The petitioners' attempts to resurrect these issues in subsequent actions are impermissible, as the principle of res judicata prevents the re-adjudication of matters already decided by a court of competent jurisdiction.
Main Doctrine
The principle of conclusiveness of judgment bars the relitigation of particular facts or issues in another proceeding between the same parties on a different claim or cause of action, even if the issues were not directly passed upon in the former suit but were necessarily included in the determination of the action.