THIRD DIVISION
[ G.R. No. 130381. July 14, 1999]
FRANCISCO HERRERA, represented by heirs of FRANCISCO
HERRERA, petitioner, vs. ATTY. and MRS. PATERNO CANLAS, TOMAS and MRS.
MANINGDING, and OSCAR and MRS. PERLAS, respondents.
D E C I S I O N
ROMERO, J.:
In this petition for certiorari,
petitioner seeks the reversal of the decision of the Court of Appeals dated
April 30, 1997 and its resolution dated August 25, 1997 affirming the dismissal
by the trial court of petitioner’s complaint for Reconveyance with Damages.
In G.R. No. 77691 entitled Paterno
R. Canlas vs. Hon. Court of Appeals and Francisco Herrera which was promulgated
on August 8, 1988, it was established that the late Francisco Herrera was the
registered owner of eight (8) parcels of land located in Quezon City which he
mortgaged in favor of L and R Corporation.
The lots were later foreclosed by the financing company and Herrera,
being unable to pay his loans and redeem his property, entered into an
agreement with his lawyer, herein respondent Atty. Canlas. Under the Deed of Sale and Transfer of Rights
of Redemption and/or to Redeem, Atty. Canlas was given the right to redeem the
lots of his client. Having exercised
the right of redemption over the lots in question, Atty. Canlas was able to
register the properties in his name.
In 1983 Herrera filed in the
Regional Trial Court of Quezon City an action for reconveyance and reformation
of the contract, alleging that respondent Canlas fraudulently deprived him of
his properties by falsifying the agreement they signed. During the pendency of the case, Canlas sold
the properties to herein respondent spouses Maningding and spouses Perlas who
were able to transfer the titles to their respective names. Only the lot covered by TCT No. 330674
remained in Canlas’ name. The RTC ruled
in favor of respondent Canlas and the dismissal of the complaint became final.
Undaunted, Herrera then filed for
Annulment of Judgment with the Court of Appeals in answer to which Canlas filed
a motion to dismiss on the ground of res judicata and other procedural
issues. The Court of Appeals denied the
motion to dismiss so Canlas went to this Court for relief. The Court agreed with Canlas as regards the
procedural aspect of the case but rendered a decision against him on the
merits. It invalidated the transfer of
the properties to respondent Canlas on the ground that the transaction was one
where the lawyer took undue advantage of his client. The Court, however, did not order the reconveyance of the subject
lots, on the ground that since the properties have been conveyed to third
persons who were presumed to be innocent purchasers for value, Canlas was
instead held liable to Herrera, by way of actual damages, for such loss of
properties. Canlas was thus ordered to
pay petitioner P1,000,000.00, the sum which Canlas earned from the properties
he sold. Herrera, on the other hand,
was held liable to Canlas for the amount of P654,000.00 representing the
redemption price for the lots. The
difference of P324,000.00 thus served as the actual amount Herrera obtained on
execution.
In 1990, Herrera filed another
case for reconveyance with damages in the RTC against herein respondent spouses
Canlas, spouses Maningding, and spouses Perlas alleging that the respondents
acquired the subject properties in bad faith.
The trial court dismissed the complaint saying that Herrera, having
accepted as final the decision of this Court awarding him actual damages
instead of reconveyance and other damages, no longer had a cause of action
against Canlas and his successors in interest.
The Court of Appeals affirmed the decision of the RTC explaining that
the Supreme Court, in writing finis to the controversy, presumed that
the third persons who bought the lots from Canlas were innocent purchasers for
value and it is for this reason that the High Court awarded Herrera actual
damages instead of ordering reconveyance.
Hence, the heirs of Herrera filed
the present petition. They now contend
that the trial court and the Court of Appeals both erred in dismissing the case
on the ground of res judicata because, (1) the parcel of land covered by
TCT No. 330674 which is still in respondent Canlas’ name is not covered by the
aforesaid Supreme Court decision, and (2) there is no identity of parties in
the present case and the previous one since the buyers, spouses Maningding and
spouses Perlas, were not impleaded in the first case for reconveyance.
Respondent spouses Canlas and
spouses Perlas filed their respective Comments but the spouses Maningding have
not to date filed their Comment as their address is unknown and they could not
be served a copy of the petition.
Spouses Canlas averred that the petition for review was filed out of
time and that the issues raised by the petitioner were already decided upon in
G.R. No. 77691. For their part, spouses
Perlas likewise interposed the defense of res judicata, claiming that
although they were not actual parties in the previous case, they were
nevertheless bound by the decision of the Court as successors in interest of
Canlas with respect to the lots under litigation. Respondents Perlas further maintained that since Herrera received
the value of the properties sold by Canlas, he cannot now ask for reconveyance
for this smacks of bad faith and greed.
Moreover, respondents Perlas added, if petitioner had felt aggrieved by
the Court’s finding that the third persons who bought the lots were innocent
purchasers for value, he should have questioned such pronouncement instead of
proceeding to execute upon his judgment claim.
As to the first issue regarding
the lack of identity in the subject matter of the case, it should be noted that
the award of P1,000,000.00 ordered by the Court in G.R. No. 77691 refers only
to the value of the properties sold by respondent Canlas to third persons. To reproduce the holding of the Court:
“At any rate, the transfer, so we hold, is not subject to the injunction of Article 1491 of the Civil Code. But like all voidable contracts, it is open to annulment on the ground of mistake, fraud, or undue influence, which is in turn subject to the rights of innocent purchasers for value.
For this reason, we invalidate the transfer in question
specifically for undue influence as earlier detailed. While the respondent Herrera has not specifically prayed for invalidation,
this is the clear tenor of his petition for annulment in the Appellate
Court. It appearing, however, that
the properties have been conveyed to third persons whom we presume to be
innocent purchasers for value, the petitioner, Atty. Paterno Canlas, must be
held liable, by way of actual damages, for such a loss of properties.”
(underscoring supplied).[1]
From the foregoing, it is clear
that the decision in G.R. No. 77691 relates to those lots which can no longer
be ordered reconveyed to Herrera, the same having been already transferred to
persons whom the the Court considered to be innocent purchasers for value,
namely, herein respondent spouses Maningding and spouses Perlas. However, with respect to the parcel of land
covered by TCT No. 330674 which is still in the name of the Canlas spouses and
which fact was not denied by the latter, res judicata cannot be invoked
as to bar the recovery of the said lot as it was not adjudicated upon in the
previously decided case.
With respect to the question regarding
the identity of parties, worth reiterating is the Court’s ruling in Sempio vs.
Court of Appeals, et. al., where it was held that complete identity of parties
is not required for res judicata to lie. Thus,
“The foregoing argument is, however, premised on the wrong notion that identity of parties is calibrated by their strict sameness or a total lack of differentiation among them.
Well settled is the rule that only substantial, and not absolute,
identity of parties is required for lis pendens, or in any case, res judicata,
to lie. There is substantial identity
of parties when there is community of interest between a party in the first
case and a party in the second case albeit the latter was not impleaded in the
first case.”[2]
In the case at bar, the buyers of
the lots were virtually made parties to the decided case (G.R. 77691), because,
first, the Court in effect confirmed their rights over
the properties when it expressly presumed
them to be innocent purchasers for value. Second, the buyers are deemed successors in interest of
respondent Canlas and as such, they shared a community of interest with the
latter as regards the outcome of the case.
Furthermore, this Court has had
occasion to rule that “[i]f the record of the former trial shows that the
judgment could not have been rendered without deciding the particular matter,
it will be considered as having settled that matter as to all future actions
between the parties, and if a judgment necessarily presupposes certain
premises, they are as conclusive as the judgment itself.”[3] Thus, the premise relied upon by the Court that the
buyers of the properties were innocent purchasers for value is as conclusive as
the award of actual damages granted to Herrera.
In another case, this Court
likewise held that when material facts
which were in issue in a former action and were admitted or judicially
determined therein, such facts become res judicata and may not again be
litigated in a subsequent action between the same parties or their privies.[4] These principles squarely apply to the case at bar.
Finally, to allow reconveyance of
the lots to Herrera would be tantamount to unjust enrichment at the expense of
herein respondents. Herrera, by
obtaining execution for the judgment in G.R. No. 77691, already satisfied his
claim over the lots which are now in the name of the spouses Maningding and
spouses Perlas. He can no longer recover the said lots as he had already been
paid the value thereof.
IN VIEW OF THE ABOVE PREMISES, the instant petition is PARTIALLY GRANTED. Thus, petitioners may recover the lot
covered by TCT No. 330674 which was still in the name of the Canlas spouses at
the time of the finality of the judgment in G.R. No.77601 in appropriate
proceedings, without prejudice, of course, to the rights of innocent purchasers
for value. Petitioners are, however,
barred by the principle of res judicata from recovering the lots now
owned by the spouses Maningding and spouses Perlas and for which petitioners
had been paid actual damages by respondents Canlas. No costs.
SO ORDERED.
Vitug, Panganiban, Purisima, and Gonzaga-Reyes, JJ., concur.