Beverly Anne C.

Yap -versus- Republic of the Philippines, represented by the Regional Executive

The doctrine of conclusiveness of judgment, as a concept of res judicata, states that a fact or question
which was in issue in a former suit and was there 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.

In this case, RTC Branch 16 falsely appreciated the decision of RTC Branch 13. The foregoing shows that
the question of whether or not Yap and Villamar are innocent purchasers was not an actual issue of fact in
the case before the RTC Branch 13, and which called for said court's adjudication. "An issue of fact is a
point supported by one party's evidence and controverted by another's." Yap and Villamor being buyers in
good faith was merely an allegation which was not proven in court and RTC Branch 13 did not actually
make any clear pronouncement on the matter. FACTS:

Consuelo Vda. de dela Cruz applied for free patent over a parcel of land located in Daliao, Toril, Davao
City. As she could not wait for the approval of her application, she executed a Deed of Waiver/Quitclaim
on November 25, 1981 in favor of Rollie Pagarigan (Pagarigan). Pagarigan filed his own Free Patent
Application (FPA) and subsequently, Free Patent No. (XI-1)5133 was issued to him over said lot.
Original Certificate of Title (OCT) No. P-11182 was thereby issued in his name on November 25, 1982.
On September 5, 1989, Pagarigan mortgaged the lot to Banco Davao-Davao City Development Bank (the
Bank). For failure to pay his loan, the property was foreclosed, and was eventually sold to the Bank at
public auction on October 26, 1990. These proceedings were duly annotated in the title. However, the
land covered by OCT No. P-11182 was allegedly occupied by Teodoro Valparaiso and Pedro Malalis
(Protestants). On October 24, 1990, the Protestants filed a formal protest with the Bureau of Lands
(Bureau), praying for the recall of the free patent issued to Pagarigan, and for the institution of a
corresponding action for reversion considering that they have been in adverse, exclusive, and continuous
occupation of the subject property since 1945, cultivating it, and planting various crops, nipa palms and
coconut trees on said land.

On January 27, 1992, the Protestants caused the annotation of a notice of lis pendens in the title. Said
notice of lis pendens pertained to the Civil Case instituted by the Protestants against Pagarigan, Menardo
Metran and Rene Galope to enjoin them from demolishing the former's houses pending the determination
of the Department of Environment and Natural Resources (DENR) on the propriety of cancelling the title
obtained by Pagarigan. The administrative protest reached the Office of the Secretary of the DENR,
which rendered a Decision against Pagarigan, since the protestants have been in actual occupation of the
land in dispute since 1945 and have introduced improvements thereon. Pagarigan never occupied the
same nor his predecessor-in-interest, Consuelo dela Cruz. He, likewise, misrepresented in his application
that he was the actual occupant and that there were no others who occupied the lot in dispute. The title
was issued sans an actual ground survey and Pagarigan did not post a copy of his Notice for FPA on both
the Bulletin Boards of Daliao and Lizardo as required by law.

Meanwhile, on November 5, 1992, the Bank sold the subject property to Beverly Anne C. Yap (Yap) and
Rosanna F. Villamor (Villamor). Upon the execution of the deed of sale, the OCT was delivered to them
and TCT was eventually issued in the name of Yap and Villamor. DOTC filed a complaint for
expropriation of a portion of the subject lot before the RTC of Davao City. On February 19, 2003, the
RTC Branch 13 rendered its Decision, ruling that the DENR is entitled to expropriate the land subject of
this case for the purpose of road right of way to the Davao Fish Port, which is for public use. The just
compensation for the land is ₱278,000.00, andVillamor and Yap are the ones entitled to the payment of
just compensation for the property, and DOTC is directed to pay the said amount to Villamor and Yap.
The DENR, through the Office of the Solicitor General (OSG), filed the Complaint for Cancellation of
Patent, Nullification of Title and Reversion with the RTC of Davao City. The RTC dismissed the DENR's
complaint since the subject land has already been sold to third persons, it must be shown that the latter
were part of the fraud and/or misrepresentation committed by the original grantee, or at least were aware
of it. However, since the RTC Branch 13 already declared in its decision that Yap and Villamor were
purchasers in good faith and for value of the land in question, RTC Branch 16 maintained that, as a court
of co-equal jurisdiction, it is bound by the said finding under the principle of conclusiveness of judgment.
Moreover, the fact that it took the respondent 26 years, from the issuance of the free patent before it
instituted an action for reversion, militates against its cause. The Regional Director of DENR elevated its
case to the CA which reversed the trial court. In so ruling, the CA held that neither the Bank nor Yap and
Villamor were innocent purchasers for value. Further, the CA maintained that the decision of the RTC
Branch 13 did not constitute res judicata insofar as the same has not yet attained finality. The Bank, Yap,
and Villamor sought reconsideration of the CA decision, but their motion was evenly denied in the
Resolution dated November 14, 2011.

ISSUE:

Whether the decision of the CA run counter to the rule on conclusiveness of judgment. (NO)

RULING:

The doctrine of conclusiveness of judgment, as a concept of res judicata,states that a fact or question
which was in issue in a former suit and was there 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. It is
essential that the issue be identical. If a particular point or question is in issue in the second action, and
the judgment will depend on the determination of that particular point or question, a former judgment
between the same parties or their privies will be final and conclusive in the second if that same point or
question was in issue and adjudicated in the first suit. Identity of cause of action is not required but
merely identity of issue.

RTC Branch 16 falsely appreciated the decision of RTC Branch 13. The foregoing shows that the
question of whether or not Yap and Villamar are innocent purchasers was not an actual issue of fact in the
case before the RTC Branch 13, and which called for said court's adjudication. "An issue of fact is a point
supported by one party's evidence and controverted by another's." Yap and Villamor being buyers in good
faith was merely an allegation which was not proven in court and RTC Branch 13 did not actually make
any clear pronouncement on the matter. The expropriation proceeding was filed on February 28, 1997.
The protestants caused the annotation of a notice of lis pendens on the original title on January 27, 1992.
Accordingly, if indeed the question on whether Yap and Villamar are buyers in good faith was an actual
issue of fact before the expropriation proceeding, the protestants could have easily controverted such
claim by the mere expedience of presenting a certified original copy of the title. Indeed, the notice at the
back of a Torrens title serves as notice to the whole world of the pending controversy over the land so
registered.

The RTC Branch 13 basically anchored its judgment on the indefeasibility of a Torrens title. Pursuant to
the well-settled rule that a certificate of title cannot be subject to collateral attack and can only be altered,
modified, or cancelled in a direct proceeding in accordance with law, it was clear that the trial court was
without jurisdiction in an expropriation proceeding, to rule whether the title issued to Pagarigan is void -
notwithstanding the decision of the DENR Secretary.

discretionary power of the Court of First Instance to grant or deny a motion for execution before the
expiration of the time to appeal will not be interfered with by the appellate court, unless it be shown that
there has been an abuse thereof or a subsequent change of conditions.

As provided in Sec. 2, Rule 39 of the New Rules of Court, the existence of good reasons is what confers
discretionary power on a court of first instance to issue a writ of execution pending appeal. The reasons
allowing execution must constitute superior circumstances demanding urgency which will outweigh the
injury or damage should the losing party secure a reversal of the judgment on appeal.

The reasons stated in the order of execution pending appeal are not well founded.

The first reason stated in the order was the consistent refusal of petitioner to deliver the mortgaged
chattels to the receiver. The records disclose that respondent Davao Lumber Company is not even entitled
to the appointment of a receiver. It is an established rule that the applicant for receivership must have an
actual and existing interest in the property for which a receiver is sought to be appointed. The Davao
Lumber Company's proof of interest in the property is the deed of chattel mortgage executed by Urbano
Jaca in favor of the Davao Lumber Company on January 24, 1961. This deed of chattel mortgage is void
because it provides that the security stated therein is for the payment of any and all obligations herein
before contracted and which may hereafter be contracted by the Mortgagor in favor of the Mortgagee

The second reason stated was the fact that petitioner Urbano Jaca violated Article 319 of the Revised
Penal Code by selling to a certain Teodoro Alagon some of the mortgaged properties. As already
discussed, the deed of chattel mortgage executed by Urbano Jaca in favor of the Davao Lumber Company
is void. Hence, petitioner Urbano Jaca could not have violated Article 319 of the Revised Penal Code.
Moreover, the respondent Davao Lumber Company has not successfully refuted the allegation of the
petitioners that the sale of the wrecker to Teodoro Alagon was exclusively negotiated by the lumber
company's managing partner, Tian Se, and that the latter caused Urbano Jaca to sign the deed of sale
because he was the owner of the wrecker.

The third reason stated is the fact that petitioners have no properties and assets to satisfy the judgment.
The basis of respondent judge's conclusion that petitioners do not have sufficient assets is an
unsubstantiated allegation in the motion for execution pending appeal of respondent lumber company. 28
To rectify this omission, respondent lumber company, in its opposition to the motion for reconsideration
of the order of execution pending appeal, tried to point out that the sale of two chevrolet trucks by Urbano
Jaca and their failure to file a counterbond indicate that they are without sufficient assets. This later
attempt to substantiate a baseless allegation in the motion for execution pending appeal is futile. The
trucks alleged to be sold are not properties of petitioner Urbano Jaca They are paraphernalia properties of
his wife, Florentina Perez, and the same trucks were in fact sold by her. And even if said trucks were
owned by Urbano Jaca their sale to Atty. Raul Nengasca does not totally indicate insolvency. As has been
repeatedly observed, petitioner Urbano Jaca is engaged in business. Sale of property used in business does
not establish insolvency. The sale may have been prompted by the need for more modern equipment on
account of obsolescence, or the need of to be directed to more profitable endeavor. The same reason
applies to their failure to file a counterbound. The cash needed for the counterbound may be utilized for
the continuance of the business or to increase business profits. In short, the acts of petitioner cannot be
always be interpreted as signs of insolvency but may also indicate sound business judgment prompted by
the need to have liquid reserve of cash.