FERNANDEZ KIDPALOS, APPLICANT AND APPELLANT, VS. BAGUIO GOLD MINING COMPANY, OPPOSITOR AND APPELLEE; WALDO KIDPALOS, APPLICANT AND APPELLANT, VS. BAGUIO GOLD MINING COMPANY, OPP…

Fernandez Kidpalos versus Baguio Gold Mining Company

The Case

This is a direct appeal from five orders of dismissal issued by the Court of First Instance of Baguio City, which threw out five applications for land registration on the ground of res judicata. The applicants, Fernandez Kidpalos, Waldo Kidpalos, and their companions, had earlier sued the Baguio Gold Mining Company to be declared owners of the same parcels of land in Binanga, in the Municipality of Itogon, Mountain Province, and had lost. They now come before the Supreme Court insisting that the earlier loss does not bar their registration cases. The case matters because it teaches the exact reach of res judicata: that a judgment is conclusive not only through its dispositive portion, but through every fact necessarily decided in reaching it, and that a change in the form of action does not defeat the bar.

Procedural History

The story begins in the Court of First Instance of Baguio City, where five reivindicatory suits were filed against the Baguio Gold Mining Company and the Director of Mines. After trial, the court found that the plaintiffs had failed to substantiate their claims of ownership and dismissed the suits. The plaintiffs appealed to the Court of Appeals, which affirmed the dismissal in a judgment rendered on the thirty-first of July, 1958. The plaintiffs then went up to the Supreme Court on a petition for review, and in a resolution of 1960 the Supreme Court dismissed the petition on the ground that the issues raised were factual and had no merit, but without prejudice to the registration proceedings filed by the petitioners. Meanwhile, while the reivindicatory cases were still on appeal, the same plaintiffs had filed the present registration cases in the Court of First Instance, which held them in abeyance until the appeals were resolved. Once the 1960 resolution became final, the mining company reiterated its motions to dismiss, and the trial court dismissed the applications on the ground of res judicata. The applicants then went directly to the Supreme Court by direct appeal.

Facts

On the thirty-first of August, 1954, Maglia Cayapa, Nabos Valenciano, Waldo Kidpalos, Fernandez Kidpalos, and Ipang Lebos Vda. de Lampacan sued the Baguio Gold Mining Company and the Director of Mines in the Court of First Instance of Baguio City. They asked the court to declare them owners of certain parcels of land in sitio Binanga, Barrio of Tuding, Municipality of Itogon, Benguet, Mountain Province; to annul the mining claims of the company that overlapped their parcels; to recover damages; to enjoin the Director of Mines from proceeding with the company's lode patent applications; and to order the demolition of the mine buildings at the company's expense. The company claimed title by virtue of valid locations made between 1925 and 1930, and asked for dismissal and damages.

After trial, the Court of First Instance found that the plaintiffs had failed to prove ownership and dismissed the suits. On appeal, the Court of Appeals found that the land lay within the Cordillera Forest Reservation proclaimed by Governor General Stimson and formed part of the public domain; that from 1927 to 1933 one George Icard and his son Joseph had located mining claims there, which were later sold and transferred to the Baguio Gold Mining Company; that the company had occupied the land, worked the claims, and performed the acts required by the mining laws until the Second World War; that after the war the claims were validated by Act Number 4268; and that the company had acquired beneficial title by its locations, although the patents were still in process. The Court of Appeals held that the mining company had acquired a superior title to that of the plaintiffs, and affirmed the dismissal.

The plaintiffs sought review in the Supreme Court, which dismissed the petition as raising only factual issues without merit, but without prejudice to the registration proceedings. Those registration proceedings, filed while the appeal was pending, were then dismissed by the trial court on the ground of res judicata, and the applicants appealed directly to the Supreme Court.

Issues

• Whether or not the 1960 resolution of the Supreme Court, which dismissed the petition for review without prejudice to the registration proceedings, prevented the application of res judicata to those registration proceedings.
• Whether or not only the dispositive portion of the earlier judgment binds the parties, so that the findings on ownership made by the Court of Appeals may be relitigated.
• Whether or not the difference in the form of action, the earlier suits being reivindicatory and the present ones being land registration proceedings, defeats the bar of res judicata.

Applicable Provisions

Section 1, paragraph f, of Rule 16 of the Revised Rules of Court, on the grounds for a motion to dismiss, provides:

Within the time fixed by these Rules, the defending party may file a motion to dismiss the action on any of the following grounds: x x x That the cause of action is barred by a prior judgment or by the statute of limitations.

The Court cites this ground to show that res judicata is a matter of defense which the trial court may consider and resolve once it is set up, and that it does not deprive the court of jurisdiction over the second suit.

Ruling

On the first issue, the Court held that the reservation in the 1960 resolution did not help the applicants. The words quoted merely established that the decision in the reivindicatory action should not be considered as having decided the pending registration proceedings, since one was a personal action and the other a proceeding in rem. The Court of First Instance could not automatically apply the earlier decision to the registration cases. But res judicata is a matter of defense, and once the defense was set up in the registration proceedings, the trial court acted properly in considering and resolving it.

On the second issue, the Court rejected the view that only the dispositive portion concludes the parties, calling it unduly restrictive of the salutary rule that issues once threshed out and finally adjudicated should no longer be relitigated. The Court adopted the doctrine that:

Under this rule, if 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.

Thus the findings in the former judgment, that the mining claims were validly located and that the title of the mining company is superior to that of the appellants, being the basis of the sentence of dismissal, conclude the applicants in the present case.

On the third issue, the Court held that the difference in the forms of action is irrelevant for the purposes of res judicata. A different remedy sought or a diverse form of action does not prevent the estoppel of the former adjudication. Since there can be no registration of land without the applicant being its owner, the final judgment declaring the mining company's title superior should be conclusive on that question. The Court added that the law then permitting registration on the basis of thirty years of open, adverse, and uninterrupted possession did not help the applicants, because the vesting of title in the mining company had effectively interrupted and rendered discontinuous their possession.

Doctrine

First, res judicata is a matter of defense. It does not deprive the trial court of jurisdiction to act on a second suit, but once invoked, the court must consider and resolve it. Second, the conclusiveness of a judgment is not confined to its dispositive portion. It extends to all facts necessarily involved in it as necessary steps or the groundwork upon which it must have been founded, for if a judgment necessarily presupposes certain premises, those premises are as conclusive as the judgment itself. Third, identity of causes of action is not defeated by a change in the form of remedy. A reivindicatory action and a land registration proceeding may assert the same cause of action, namely ownership of the same land, and the final adjudication in the first bars the second. Fourth, since there can be no registration without ownership, a final judgment on ownership is conclusive in the registration case.

Disposition

The Supreme Court affirmed the order of dismissal of the registration proceedings on the ground of res judicata, with the appellants ordered to pay the costs. The Baguio Gold Mining Company prevailed.

Remember This

Memorize the line that a judgment is conclusive not only through its dispositive portion but through every fact necessarily decided as the groundwork of that disposition. Examiners use this case to test the scope of res judicata and the rule that a change in the form of action does not defeat the bar of a prior final judgment.