Source: http://lawlibrary.chanrobles.com/index.php?option=com_content&view=article&id=82756:56594-1&catid=1579&Itemid=566
Timestamp: 2019-04-25 02:17:46+00:00

Document:
G.R. No. 186622, January 22, 2014 - PEBLIA ALFARO AND THE HEIRS OF PROSPEROUS ALFARO, NAMELY: MARY ANN PEARL ALFARO & ROUSLIA ALFARO, Petitioners, v. SPOUSES EDITHO AND HERA DUMALAGAN, SPOUSES CRISPIN AND EDITHA DALOGDOG, ET. AL., Respondents.
PEBLIA ALFARO AND THE HEIRS OF PROSPEROUS ALFARO, NAMELY: MARY ANN PEARL ALFARO & ROUSLIA ALFARO, Petitioners, v. SPOUSES EDITHO AND HERA DUMALAGAN, SPOUSES CRISPIN AND EDITHA DALOGDOG, ET. AL., Respondents.
For review on certiorari is the Decision1 of the Court of Appeals dated 20 May 2008, which reversed and set aside the Regional Trial Court Decision2 dated 7 August 2006 in Civil Case No. CEB–27400 for Annulment of Title, Preliminary Injunction with Temporary Restraining Order and Damages.
The lot in controversy is Lot No. 1710, covered by TCT No. T–78445, consisting of an estimated area of 2,287 sq m, more or less, located in Talisay–Minglanilla Estate, Brgy. San Roque, Talisay City, registered in the name of Olegario Bagano. On 14 June 1995, Bagano sold the subject property to petitioner Spouses Prosperous and Peblia Alfaro (Spouses Alfaro) through a Deed of Absolute Sale.
Petitioners caused the immediate transfer of the title in their names on 20 June 1995, now TCT No. T–92783, and at the same time, paid the real property tax, and constructed a perimeter fence around the subject property.
According to respondent Spouses Editho and Hera Dumalagan (Spouses Dumalagan), they are the real owners of Lot No. 1710–H, a portion of the subject property, based on a notarized Deed of Absolute Sale dated 6 December 1993.4 To prove ownership and possession, respondents offered in evidence a Certificate of Completion (Exhibit “C”) and a Certificate of Occupancy (Exhibit “C–3”), both dated 10 August 19935 and Visayan Electric Company Inc. electric bills.6 Right after their purchase from Bagano, respondent Spouses Dumalagan immediately took possession of the subject property and constructed a nipa hut therein, which they later on leased to Ramil Quiñineza, who then occupied the subject property until the end of 1997. Since then, several tenants have occupied the subject property, paying monthly rentals to respondent Spouses Dumalagan: Spouses Crispin and Editha Dalogdog, Spouses Alberto and Lucy Boncales, and Spouses Mariano and Constancia Castañares.
3. P15,000.00 as litigation expenses.
In sum, because of the unreliability of the testimonial evidence presented by the plaintiffs, this court finds no basis to conclude that the defendants were indeed informed prior to June 20, 1995, that portions of Lot No. 1710, including Lot No. 1710–H were already owned by the plaintiffs and other parties.
Declaring plaintiffs–appellants Sps. Editho and Hera Dumalagan as lawful owners of Lot No. 1710–H, including the improvements thereon.
Ordering the defendants–appellees liable to pay to plaintiffs–appellants Sps. Editho and Hera Dumalagan the amount P30,000 as attorney’s fees and litigation expenses.
THE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR AS WELL AS JUDICIAL LEGISLATION IN DECLARING THAT AN ADVERSE CLAIM, EVEN IF ALREADY EXPIRED, IS STILL CONSIDERED CONSTRUCTIVE NOTICE.
As just noted, this Court sustained the validity of the Deed of Absolute Sale between Spouses Bagano and petitioners in the Bagano case. On this basis, petitioners contend that the Supreme Court’s decision in the Bagano case constitutes res judicata apropos the case at bar. According to petitioners, respondents, even if they were not made parties, are bound by the Court’s ruling on the ownership in favor of petitioner.14 Petitioners contend that the appellate court violated the doctrine of res judicata when it sustained the validity of the Deed of Absolute Sale as it unduly awarded ownership of the subject property to respondents, obliquely reversing the Supreme Court’s decision in the Bagano case.
We shall discuss each element in seriatim.
Our decision in the Bagano case on the merits has long been final. Also, the court a quo has jurisdiction over the subject matter and the parties. However, on the issue on identity of parties and cause of action, We rule in the negative.
In the Bagano case, the parties are herein petitioner Spouses Alfaro and the Spouses Bagano, as privies to the Deed of Absolute Sale dated 14 June 1995. In the case at bar, the parties are petitioner Spouses Alfaro and respondent Spouses Dumalagan basing their rights on the Deed of Absolute Sale dated 3 December 1993. There is, thus, no identity of parties.
In the Bagano case, the cause of action is the alleged forgery of the Deed of Absolute Sale by petitioners; the crux of the case being the validity of the sale between Bagano and petitioners. In the case at bar, the cause of action is the violation of right of ownership of respondent Spouses Dumalagan. Clearly, there is no identity of cause of action. Therefore, the doctrine of res judicata is inapplicable in the case at bar. The appellate court did not reverse a Supreme Court decision.
In line with this ruling, the issue on double sale, which concerns the present case cannot be injected into the Bagano case, which is based on facts peculiar to the transaction between Bagano and petitioners. For one, herein respondents claim ownership of only a portion of the property litigated in the Bagano case, and the basis of respondents’ claim is a prior sale to them by Bagano, whose authority as a seller was an unquestioned fact. Neither of the parties in the second Bagano sale made any mention of the first sale of a part of the property to respondents.
We shall discuss the second and third issues together as they are closely related.
Whoever claims any part or interest in registered land adverse to the registered owner, arising subsequent to the date of the original registration, may, if no other provision is made in this decree for registering the same, make a statement in writing setting forth fully his alleged right or interest, and how or under whom acquired, a reference to the number of certificates of title of the registered owner, the name of the registered owner, and a description of the land in which the right or interest is claimed.
Before you bought this property from Mr. Bagano, did you try to inspect the property in order to find out if there are occupants on the subject property?
Yes. I conducted an inspection of the site.
There was a person occupying there by the name of Pesarillo.
Aside from Mr. Pesarillo, were there other occupants in the said lot?
Are you trying to tell the court that Mr. John Danao was constructing a house on the said property?
Were you able to talk to Mr. John Danao during the inspection that you have conducted?
Yes, I have a talk with him once.
Will you please tell the court what did you talk about with Mr. John Danao?
A purchaser in good faith is one who buys the property of another without notice that some other person has a right to, or an interest in such property, and pays a full and fair price for the same at the time of such purchase, or before he has notice of some other person’s claim or interest in the property.32 The petitioners are not such purchaser.
1 Penned by Associate Justice Priscilla Baltazar–Padilla, with Associate Justices Franchito N. Diamante and Florito S. Macalino concurring, docketed as CA–G.R. CEB CV. No. 01702. Rollo, pp. 32–43.
2 Penned by Presiding Judge Gabriel T. Ingles. Records, pp. 342–369.
3Sps. Editho and Hera Dumalagan, Sps. Crispin and Editha Dalogdog, Sps. Mariano and Constancia Castanares and Sps. Alberto and Lucy Boncales v. Sps. Prosperous and Peblia Alfaro, Civil Case No. CEB–27400, RTC, Branch 58, Cebu City. Id. at 1–4.
7Spouses Olegario P. Bagano and Cecilia C. Bagano v. Spouses Peblia and Prosperous Alfaro, Civil Case No. CEB–18835, RTC, Branch 12, Cebu City.
8 Penned by Associate Justice Dante O. Tinga, with Associate Justices Leonardo A. Quisumbing, Antonio T. Carpio, Conchita Carpio Morales, Presbitero J. Velasco, Jr., concurring. Rollo, pp. 316–335.
11 CA Rollo, pp. 184–185.
13 Resolution dated 9 February 2009; id. at 29.
15Allied Banking Corporation v. Court of Appeals, G.R. No. 108089, 10 January 1994, 229 SCRA 252, 257.
16Mirpuri v. Court of Appeals, 376 Phil. 628, 650 (1999).
18 G.R. No. 186045, 2 February 2011, 641 SCRA 520, 531–532.
19 Exhibit “T–2”, records, p. 129.
20 Exhibit “W–3”, id. at 207.
22 Presidential Decree No. 1529, Section 70.
23Equatorial Realty Development, Inc., v. Sps. Desiderio, et. al., G.R. No. 128563, 25 March 2004, 426 SCRA 271, 278.
26 Exhibits “I”– “M–1”, records, pp. 122–126.
27 Exhibits “N”– “S–2”, id. at 127–128.
28 TSN, 22 February 2002, p. 6.
30 CIVIL CODE, Art. 1544.
31Consolidated Rural Bank, Inc., v. CA, 489 Phil. 320, 334 (2005).
32Centeno v. Spouses Viray, 440 Phil. 881, 885 (2002).
33Consolidated Rural Bank Inc., v. CA, supra.
34 274 Phil. 1134, 1142–1143 citing Leung Yee v. Strong Machinery Co., 37 Phil. 644, 651 (1918); RFC v. Javillonar, 57 O.G. 39 (1961); C.N. Hodges v. Dy Buncio and Co., Inc.and Court of Appeals, 116 Phil 595, (1962); Manacop v. Cansino, 61 O.G. 21; and Gatioan v. Gaffud, 137 Phil. 125, 133 (1969).

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