06 CAYANA VS.
COURT OF APPEALS
GR. NO. 125607 | March 18, 2004 | Tinga, J.
EMERGENCY RECIT:
Petitioners and the father of respondent sold two parcels of land to their son. Upon the death of the
father, the mother filed an Affidavit of Adverse Claims pertaining to the two parcels of land alleging that
the deed of sale was a forgery. A case was filed against Pastor for the cancellation of the Deed of
Absolute Sale and reconvyance of the parcels of land while Pastor entered into an agreement of
counter guaranty for the second parcel of land and mortgaged the firs parcel to the bank to Reginaldo
who mortgaged the same to the bank. Respondents filed an answer but were declared to be in default
thus petitioners were allowed to present evidence ex parte. RTC ruled in favor of the petitioners
declaring the deed of sale null and void but denied the reconveyance because the mother was still he
owner. No appeal was entered, thus judgment became final. Mortgage was foreclosed and bank
bought the land in question and sold it to Cayabyab, who then sold it to spouses Ramos. A verified
complaint was filed by the petitioner to cancel the said deeds of sale which the court granted part of
which on res judicata. CA held that res judicata was inapplicable. SC the doctrine of conclusiveness of
judgment must have been followed.
DOCTRINE/S:
The doctrine that should have been followed in this case is conclusiveness of judgment--a fact
or question which was in issue in a former suit and there was judicially passed upon and determined by
a court of competent jurisdiction, is conclusively settled by the judgment therein as far as the parties to
that action and persons in privity with them are concerned and cannot be again litigated in any future
action between such parties or their privies, in the same court or any other court of concurrent
jurisdiction on either the same or different cause of action, while the judgment remains unreversed by
proper authority.
FACTS:
 The petitioners and respondents’ father, with the marital consent of his wife, sold two
parcels of land to their son, one of the respondents in this case. At the death of the father,
the mother filed an Affidavit of Adverse Claims pertaining to the two parcels of land, alleging
that the Deed of Absolute Sale in favor of their son were forgeries. However, later on, she
issued an affidavit withdrawing such adverse claims.
 Later on, together with petitioners of this case and respondent Marceliano, they filed a case
against respondent Pastor, for the cancellation of the Deed of Absolute Sale and
reconveyance of the two parcels of land. Meanwhile, respondent Pastor entered into an
agreement of counter guaranty with respondent corporation using second parcel of land;
mortgaged first parcel to respondent bank and sold first parcel of land to a certain Rosafina
Reginaldo, who then mortgaged the land to respondent bank.
 As the civil case against respondents was ongoing, respondents filed an answer but were
found to be in default, the court allowed petitioners to file evidence ex parte.
 The court decided the civil case in favor of petitioners, declaring the deed of absolute sale
null and void but denied the prayer for reconveyance saying that the mother was still the
owner of the land. No appeal was entered by respondents and the decision was deemed
final.
 The mortgage on the first parcel of land was foreclosed and the bank being the highest
bidder, bought the property who then sold it to respondent spouses Marceliano Cayabyab.
The respondent spouses M. Cayabyab then sold the land to respondent spouses Ramos.
 The petitioners filed a verified complaint for the nullification and cancellation of the deeds of
absolute sale of the respondents. They asked also for the possession of the 2 parcels of
land due to the alleged donation inter vivos of their mother.
 The trial court decided in favor of the petitioners, part of the decision included the
application of res judicata. Respondents appealed this to the CA contending the misuse of
res judicata. CA decided in favor of the respondents. It held that res judicata was
inapplicable and also, declared the deeds of absolute sale and TCT’s valid. CA mentioned
that it was evident that there was an affidavit withdrawing adverse claims over land, that the
sale of parcels of land were not simulated and not done in bad faith, and that there was no
evidence for the donation inter vivos being alleged by the petitioners.
ISSUE/S:
Whether or not the decision on the first civil case constitutes a bar to the defenses and claims of
respondents in the second case?
HELD:
Both the trial court and CA misread the provisions on the effect of judgments or final orders as given by
Rules of Civil Procedure:
SEC. 47. Effect of judgments or final orders.—The effect of a judgment or final order rendered by
a court of the Philippines, having jurisdiction to pronounce the judgment or final order, may be
as follows:
(a) In case of a judgment or final order against a specific thing, or in respect to the probate of a
will, or the administration of the estate of a deceased person, or in respect to the personal,
political, or legal condition or status of a particular person or his relationship to another, the
judgment or final order is conclusive upon the title to the thing, the will or administration, or the
condition, status or relationship of the person; however, the probate of a will or granting of letters
of administration shall only be prima facie evidence of the death of the testator or intestate;
(b) In other cases, the judgment or final order is, with respect to the matter directly adjudged or
as to any other matter that could have been raised in relation thereto, conclusive between the
parties and their successors in interest by title subsequent to the commencement to the action or
special proceeding, litigating for the same thing and under the same title and in the same
capacity;
(c) In any other litigation between the same parties or their successors in interest, that only is
deemed to have been adjudged in a former judgment or final order which appears upon its face
to have been so adjudged, or which was actually and necessarily included therein or necessarily
thereto.
Res judicata and the bar of prior judgment is not applicable to this case since the requisites for
these two to apply are not present. There is ‘bar by prior judgment’ when, between the first case
where the judgment was rendered and the second case which is sought to be barred, there is identity
of parties, subject matter and cause of action. The judgment in the first case constitutes an absolute
bar to the subsequent action. It is final as to the claim or demand in controversy, including the parties
and those in privity with them, not only as to every matter which was offered and received to sustain or
defeat the claim or demand, but as to any other admissible matter which might have been offered for
that purpose and of all matters that could have been adjudged in that case. But where between the first
and second cases, there is identity of parties but no identity of cause of action, the first judgment is
conclusive in the second case, only as to those matters actually and directly controverted and
determined and not as to matters merely involved therein. For res judicata to apply, there must be (1) a
former final judgment rendered on the merits; (2) the court must have had jurisdiction over the subject
matter and the parties; and, (3) identity of parties, subject matter and cause of action between the first
and second actions. According to the appellate court, the third requisite for the application of res
judicata is not present in this case.
The doctrine that should have been followed in this case is conclusiveness of judgment--a fact
or question which was in issue in a former suit and there was judicially passed upon and determined by
a court of competent jurisdiction, is conclusively settled by the judgment therein as far as the parties to
that action and persons in privity with them are concerned and cannot be again litigated in any future
action between such parties or their privies, in the same court or any other court of concurrent
jurisdiction on either the same or different cause of action, while the judgment remains unreversed by
proper authority. The decision of the trial court, which was final, declaring the deeds of absolute sale
null and void, precluded the CA from further adjudicating the validity of the deeds and titles.
WHEREFORE, the Decision and Resolution of the Court of Appeals are hereby REVERSED
and the Decision of the trial court is accordingly REINSTATED but with the modification that the First
and Second Parcels should be included in the estate of Raymundo and Eulalia Cayabyab and
partitioned in accordance with the law on succession.
SO ORDERED.