Case Digest: Toledo-Banaga v. CA 102 SCAD 906, 302 SCRA 331,G.R. No. 127941, January 28, 1999

Property | Immovable Property, Ministerial Function

Facts:  

• Biblia Toledo-Banaga lost her right to redeem her property earlier foreclosed and which was subsequently sold at public auction to Candelario Damalerio.
  • CA: Reversed the decision, allowing Banaga to redeem the property within a specific period.
• Banaga tried to redeem the property by depositing with the trial court the amount of redemption which was financed by co-petitioner Jovita Tan.
• Damalerio opposed Banaga's redemption attempt.
• RTC-GenSan: Upheld the redemption, ordering the cancellation of Damalerio's titles and issuing new ones to Banaga.
• CA: Set aside the trial court's orders and declared Damalerio as the absolute owner of the property.
• The decision became final and executory. The trial court issued a writ of execution ordering the reinstatement of titles in Damalerio's name.
• The Register of Deeds refused to comply alleging that the Certificates of Title issued to petitioner Tan must first be surrendered. 

Issue: 

• Whether the Register of Deeds is justified in refusing to issue Certificates of Title on the ground that the matter should be referred "en consulta" to the Register of Deeds. NO

Held:

The Court is not convinced of the arguments proffered by petitioners.

By arguing that petitioner Tan was a buyer in good faith, petitioners in effect raise once more the issue of ownership of the subject property. But such issue had already been clearly and categorically ruled upon by the CA and affirmed by this Court, wherein private respondent was adjudged the rightful and absolute owner thereof. The decision in that case bars a further repeated consideration of the very same issue that has already been settled with finality. To once again re-open that issue through a different avenue would defeat the existence of our courts as final arbiters of legal controversies. Having attained finality, the decision is beyond review or modification even by this Court. 

Under the principle of res judicata, the Court and the parties, are bound by such final decision, otherwise, there will be no end to litigation. It is to the interest of the public that there should be an end to litigation by the parties over a subject fully and fairly adjudicated, and an individual should not be vexed twice for the same cause.  All the elements of res judicata are present in this case, which are:

1. the former judgment must be final;
2. the court which rendered judgment had jurisdiction over the parties and the subject matter;
3. it must be a judgment on the merits;
4. and there must be between the first and second actions identity of parties, subject matter, and cause of action. 

The judgment in the redemption suit had long become final and executory; there is no question that the court had jurisdiction over the parties and the subject matter; it involves an adjudication on the merits of the case as the court discussed and passed upon petitioner Banaga's right of redemption which she did not timely exercise and as a consequence, lost her claim of ownership of the lot. Both petitioners and private respondent are parties to the earlier cases, disputing the same parcel of land with both opposing parties claiming ownership thereof. Certainly, res judicata had set in. Besides, once judgment had become final and executory, it can no longer distributed no matter how erroneous it may be. In any case, no such error was attributed to in this case.

Contrary to petitioners' argument, private respondent's remedy is not a direct or independent civil action for cancellation of petitioner Tan's titles. The facts, circumstances, evidence and arguments invoked in this derailed final and executory decision are the very same matters that will be established assuming such independent suit is legally warranted. It does not matter whether the former case was a redemption suit and the new one will be for cancellation of title because the test of identity of causes of action is not in its form but whether the same evidence would support and establish the former and present causes of action.  

Petitioners other contention that the execution of the final and executory decision — which is to issue titles in the name of private respondent — cannot be compelled by mandamus because of the "formality" that the registered owner first surrenders her duplicate Certificates of Title for cancellation per Section 80 of Presidential Decree 1529 cited by the Register of Deeds, bears no merit. In effect, they argue that the winning party must wait execution until the losing party has complied with the formality of surrender of the duplicate title. Such preposterous contention borders on the absurd and has no place in our legal system. Precisely, the Supreme Court had already affirmed the CA's judgment that Certificates of Title be issued in private respondent's name. To file another action just to compel the registered owner, herein petitioner Tan, to surrender her titles constitute violation of, if not disrespect to, the orders of the highest tribunal. Otherwise, if execution cannot be had just because the losing party will not surrender her titles, the entire proceeding in the courts, not to say the efforts, expenses and time of the parties, would be rendered nugatory. It is revolting to conscience to allow petitioners to further avert the satisfaction of their obligation because of sheer literal adherence to technicality,  or formality of surrender of the duplicate titles. The surrender of the duplicate is implied from the executory decision since petitioners themselves were parties thereto. Besides, as part of the execution process, it is a ministerial function of the Register of Deeds to comply with the decision of the court to issue a title and register a property in the name of a certain person, especially when the decision had attained finality, as in this case.

In addition, the enforcement of final and executory judgment is likewise a ministerial function of the courts  and does not call for the exercise of discretion. Being a ministerial duty, a writ of mandamus lies to compel its performance. Moreover, it is axiomatic that where a decision on the merits is rendered and the same has become final and executory, as in this case, the action on procedural matters or issues becomes moot and academic. Thus, the so-called consulta to the Commissioner of Land Registration, which is not applicable herein, was only a naive and belated effort resorted to by petitioners in order to delay execution. If petitioners desire to stop the enforcement of a final and executory decision, they should have secured the issuance of a writ of preliminary injunction, but which they did not avail knowing that there exists no legal or even equitable justifications to support it.

At any rate, the time petitioner Banaga sold the property to petitioner Tan, the latter was well aware or the interest of private respondent over the lot. Petitioner Tan furnished the amount used by petitioner Banaga for the attempted redemption. One who redeems in vain a property of another acquires notice that there could be a controversy. It is for the same reason that petitioner Tan was included as party to the case filed in court. Worse, at the time of the sale, petitioner Tan was buying property not registered in the seller's name. This clear from the deed of absolute sale which even mentioned that the Certificates of Title is still in the name of private respondent. It is settled that a party dealing with a registered land need not go beyond the Certificate of Title to determine the true owner thereof so as to guard or protect her interest. She has only to look and rely on the entries in the Certificate of Title. By looking at the title, however, petitioner Tan cannot feigned ignorance that the property is registered in private respondent's name and not in the name of the person selling to her. Such fact alone should have at least prompted, if not impelled her to investigate deeper into the title of her seller — petitioner Banaga, more so when such effort would not have entailed additional hardship, and would have been quite easy, as the titles still carried the two notices of lis pendens.

By virtue of such notices, petitioner Tan is bound by the outcome of the litigation subject of the lis pendens. As a transferee pendente lite, she stands exactly in. the shoes of the transferor and must respect any judgment or decree which may be rendered for or against the transferor. Her interest is subject to the incident or results of the pending suit, and her Certificates of Title will, in that respect, afford her no special protection.

To repeat, at the time of the sale, the person from whom petitioner Tan bought the property is neither the registered owner nor was the former authorized by the latter to sell the same. She knew she was not dealing with the registered owner or a representative of the latter. One who buys property with full knowledge of the flaws and defects in the title of his vendor is enough proof of his bad faith and cannot claim that he acquired title in good faith as against the owner or of an interest therein. When she nonetheless proceeded to buy the lot, petitioner Tan gambled on the result of litigation. She is bound by the outcome of her indifference with no one to blame except herself if she looses her claim as against one who has a superior right or interest over the property. These are the undeniable and unconverted facts found by the CA, which petitioners even quote and cite in their petition. As aptly concluded by the CA that petitioner Tan is indeed a buyer in bad faith on which the Court agrees:

Notwithstanding her constructive and actual knowledge that Damalerio was claiming the land, that the land was in his name, and it was involved in pending litigation. Jovita Tan bought it from Banaga on January 7, 1993. The deed of sale recites that the parcels of land so I were covered by Transfer Certificates of Title No. (formerly) [T-12488] T-530) and TCT No. (formerly [T-12488] T-530) (sic) "and TCT No. (formerly P-1294) (Annex "F", Petition). Apart from the fact that Banaga was without any TCT, as above stated, TCT No. T-12488 was petitioner's title (Annex "C", Petition). Herein private respondent Tan was buying a land not registered in her seller's (Banaga's) name, but in that petitioner Damalerio who had been claiming it as his own. She admitted this fact when she had the land subdivided on February 2, 1993 not in her name but in the name of Candelario Damalerio (Annex "Q", Reply). Evidently, she was a purchaser in bad faith because she had full knowledge of the flaws and defects of title of her seller, Banaga . . . .

The notice of lis pendens registered on March 3, 1993 involving the land in question and private respondent Tan's actual knowledge of the then pending Civil Case No. 2556, where the question as to whether the redemption of the land which she financed was raised, rendered her a purchaser in bad faith and made the decision therein binding upon her.

Being a buyer in bad faith, petitioner Tan cannot acquire a better rights than her predecessor in interest,  for she merely stepped into the shoes of the latter. Such finding of bad faith is final and may not be re-opened for the law cannot allow the parties to trifle with the courts. 

With respect to the issue of possession, such right is a necessary incident of ownership.  The adjudication or ownership to private respondent includes the delivery of possession since the defeated parties in this case has not shown by what right to retain possession of the land independently of their claim of ownership which was rejected. Otherwise, it would be unjust if petitioners who has no valid right over the property will retain the same. Thus, the CA correctly disagreed with the trial court's order denying private respondent's motion for writ of possession for the following reasons cited in its decision:

1. The order violates the doctrine laid down in Javier vs. Court of Appeals, 224 SCRA 704, which ruled that the issuance of title in favor of a purchaser in bad faith does not exempt the latter from complying with the decision adverse to his predecessor in interest, nor preclude him from being reached by writ of execution;

2. Private respondent Tan was a party respondent in CA-G.R. SP No. 29869, she having been impleaded in a supplemental petition, which this Court gave due course and required the respondents to file their answer. The fact that she did not file any pleading, nor intervene therein did not excuse her from being bound by the decision, otherwise all that a party respondent was to fold his arm to prevent him from being bound by a decision in a case. Her securing titles over the land during the pendency of said case did not protect her from the effects of said decision. The validity of tile of a purchaser of registered land depends on whether he had knowledge, actual or constructive, of defects in the title of his vendor. If he has such knowledge, he is a purchaser in bad faith and acquires the land subject to such defects (. . . indicates that citations of authorities omitted) The title secured by a purchaser in bad faith is a nullity and gave the latter no right whatsoever as against the owner (. . .).

3. Private, respondent Tan's titles and those of her predecessor, Banaga arose from the void orders of August 7, 1992 and January 4, 1993. Since a void order could not give rise to valid rights, said titles were also necessarily null and void (. . .).

4. Private respondents and respondent Judge executed the questioned orders of August 7, 1993 and January 4, 1993, pending review of said orders in CA-G.R. SP No. 29869. The nullification of said orders by this out imposed upon the private respondents the obligation to return the property to Damalerio and upon respondent Judge, upon motion for execution, to order the cancellation of private respondents titles and the issuance of new titles to him.

5. This Court in its decision in CA-G.R. SP. No. 29869 declared petitioner Damalerio absolute owner of the property in question. Private respondents were parties litigants in said case, who did not claim possession of the land separately from their claim of ownership thereof. Such being the case, the delivery of possession is considered included in this Court's decision declaring Damalerio absolute owner of the property

(. . .), which can be enforced by writ of possession (. . .). In denying petitioner's motion for writ of possession, the trial court violated said doctrines, and

6. Lastly, the effect of respondent Judge's order of March 29, 1996 is to re-open the decision in CA-G.R. SP No. 29689 for re-litigation and alteration in a separate action. For while this Court already declared that Banaga's redemption of the land financed by private respondent Tan was invalid, and as a consequence declared Damalerio absolute owner of the property, which was binding against private respondent Tan, as she was a respondent therein and a purchaser pendente lite and in bad faith, the order of the respondent Court holding that another civil action be filed to annul private respondent Tan's titles would be to re-litigate such issues and modify or alter this Court's final decision.

The respondent Court has no authority to do so.

WHEREFORE, premises considered, the petition is hereby DENIED and the assailed decision of the Court of Appeals is AFFIRMED in toto with costs against petitioners. No further proceeding will be entertained in this case.

SO ORDERED.

Davide, Jr., C.J., Melo, Kapunan and Pardo JJ., concur.