ANDREA SANGALANG, PLAINTIFF-APPELLANT, VS. REV. BALBINO CAPARAS, DEVELOPMENT BANK OF THE PHILIPPINES AND REGISTER OF DEEDS OF RIZAL, DEFENDANTS-APPELLEES.

This is an appeal originally filed with the Court of Appeals
seeking the reversal of the Decision of the Court of First Instance of Rizal in
Civil Case No. 16885, dismissing the Complaint for Quieting of Title,
Cancellation of TCT No. 869987 and all subsequent titles derived under it with
damages, on the ground of res judicata.

The Court of Appeals certified the case to this Court as the same
involves a pure question of law.^[1]

The following facts are undisputed – Ramon Florentino, as
original owner of a parcel of residential land with improvements thereon
located at San Juan, Rizal and covered by TCT No. 30714, mortgaged the same to the Development Bank of the
Philippines (DBP). On December 11,
1954, Florentino executed a Deed of Sale with assumption of mortgage in favor
of Rev. Balbino Caparas over the aforesaid property. On July 27, 1960, the said property was foreclosed by the DBP due to the inability of Florentino (and
Caparas) to continue payments of the obligations therefor. On December 29, 1960, Caparas wrote the DBP
requesting permission to redeem the property on the ground that a Deed of Sale
with assumption of mortgage was executed by Florentino in his favor and
deposited P1,494.21 for the purpose.

However, before DBP could act upon the request of Caparas, said
bank received a letter from Florentino claiming that the deed of sale in favor
of Caparas is null and void for lack of consideration and that as the
registered owner, he must be allowed to redeem the property. On January 27, 1961, the DBP informed
Florentino of the offer made by Caparas.

Meanwhile, on January 18, 1961,^[2]
Ramon Florentino received One Thousand Five Hundred Pesos
(P1,500.00) from Andrea Sangalang as initial downpayment^[3] of the purchase price of the aforesaid property. On January 31, 1961, Florentino executed a Deed of Absolute Sale
with assumption of mortgage in favor of Sangalang. The said Deed was registered on the same date.^[4] On February 2, 1961, DBP again received a
letter from Florentino reiterating his offer of redemption, enclosing a
Philippine National Bank (PNB) check for P2,800.00.^[5] On February 10, 1961, DBP informed Caparas
that Florentino is questioning the validity of the sale in favor of the latter
and returned the P1,494.21. On February
16, 1961, DBP received another letter from Florentino asking the DBP to hold
the P2,800.00 until the question of ownership is finally settled by a competent
court. On February 28, 1961, the DBP
received a letter from Andrea Sangalang informing the bank that the mortgaged
property was sold in her favor by Florentino and enclosed of sale and informed
the bank that the check of P2,800.00 came from her.5-a

On May 10, 1961, the DBP received a letter from Caparas’ lawyer,
Atty. Alcazar, claiming that only Caparas can redeem the property. The bank in turn informed Atty. Alcazar that
the bank cannot entertain any offer to redeem the property until the rightful ownership of the same shall have been
determined by a competent court. On May
11, 1961, Caparas registered the sale dated December 11, 1954, in his favor.

On the other hand, it appears that the same property was attached
and sold at public auction in favor of Jorge Pascua^[6]
as judgment creditor of Ramon Florentino,
who also manifested his desire to redeem the property.

On June 23, 1961, Caparas filed a suit for Specific Performance
with Consignation, against the DBP before the Court of First Instance of Rizal,
docketed as Civil Case No. 6685,
raising the issue of “who among Sangalang, Pascua and Caparas has a better
right to redeem the property in question”. Sangalang and Pascua intervened while Florentino was impleaded as a
party. During the trial, Sangalang
vehemently denied knowledge of the prior sale in favor of Caparas “at the
time of the sale in her favor”, but admitted in court that she registered her lien only upon her knowledge of
Caparas’ claim over the property.^[7]
The Court of Appeals ruled in favor of Caparas,^[8]
finding that Sangalang was not a purchaser
in good faith:

“We find, and
so hold, that appellant Sangalang does not fulfill the requirement of a purchaser in good faith. Further, We agree with the findings of the lower
court on this points, that:

“With regard to Andrea Sangalang’s claim intervention, there are at least two reasons why the sale to Miss
Sangalang cannot be given legal effect: (1) At the time of the alleged sale on January 31, 1961, neither
defendant Florentino nor plaintiff was
the owner of the property, the Development Bank of the Philippines having bought the same on foreclosure sale,
plaintiff had already acquired the property from Florentino under a
valid deed of sale dated Dec. 1, 1954. It may be that the mortgage indebtedness remained in the books of the
Bank as that of Florentino but between his and the plaintiff, the latter had
become the owner of the property and had assumed the obligation. (2) There is ample evidence indicating bad
faith on the part of Florentino and Andrea Sangalang. In the case of the latter, it is evident in the following
circumstance: (a) Miss Sangalang’s
knowledge of the prior unregistered sale to plaintiff-Sangalang herself
admitted that it was only after she had learned of plaintiff’s claim that she
had caused her affidavit of Adverse Claim to be registered. This knowledge on her part is equivalent to
registration because the purpose of the law has thereby been achieved. The Torrens System cannot be used as a shield
for the commission of fraud. (b)
Sangalang’s representation to the tenants (Exh. ‘9’ Sangalang, Exh. ‘Q’ –
plaintiff) that she had acquired the property from Rev. Fr.
Caparas (not Florentino) is a clear admission
of the latter’s preferred right. (c) Florentino’s
letters to D.B.P. dated Jan. 23, Feb. 2, and Feb. 16, (Exh. 6, 7 and 11 DBP)
offering to redeem the property and enclosing PNB Cashier’s Check No. 1787110
dated Feb. 1, 1961, in the amount of P2,800.00 which came from Sangalang, as
admitted by her in her letter to the DBP dated Feb. 20, 1961 present
circumstances of suspicion, inconsistent with good faith especially if we are to consider that on Jan. 19,
1961, Sangalang had already paid Florentino the sum of P1,500.00 as part of the
purchase price. Further­more, if so
alleged by her she did some verification
regarding the property from the Bank and was issued a statement of account she
must have learned that on Dec. 20, 1960 plaintiff had already requested the
Bank to allow him to repurchase the property. (Exh. 4-DBP). (3) The contention
that Sangalang was first in possession is untenable
because plaintiff since the sale in 1954 has been in juridical possession.^[9]

On appeal^[10],
the Court of Appeals affirmed the decision in toto. In due time, the Decision became
final and executory. In accordance with
the Decision, the DBP sold the property in question to Caparas who registered
the same with the Register of Deeds of Rizal. Consequently TCT 30714 and 269981 in the name of Florentino and DBP,
respectively, were cancelled and a new title, TCT 3046763, was issued in the name of Caparas, free from
all liens.

On November 4, 1977, Andrea Sangalang filed a Complaint^[11]
for Quieting of Title, Cancellation of TCT 269987 and all subsequent titles
derived under it before the Court of First Instance (CFI) of Rizal, against
Balbino Caparas, the DBP and the Register of Deeds of Rizal, with a prayer for
compensatory and moral damages. During
the trial, the parties agreed with the observations of the court that the documentary
and testimonial evidence adduced in Civil Case No. 6885 and the Memoranda of
the respective parties be considered sufficient basis for deciding the case.

On October 26, 1973, the lower court rendered a decision
dismissing the Complaint and the counterclaim on the ground that the present
case is barred by prior judgment in Civil Case No. 6685.^[12]

On appeal, the Court of Appeals decreed that the issues raised
are pure questions of law and, therefore, beyond its jurisdiction. In addition, the Court observed that the
only factual issue raised on appeal is the basis of the alleged good faith of
appellant Andrea Sangalang. The
Appellate Court decreed that the said issue had been fully discussed in CA-G.R.
No. 33952-R, where the said Court declared Sangalang not to be a purchaser in
good faith.

It is now contended by appellant Sangalang that the lower court
erred:

“1.  IN HOLDING THAT THIS CASE HAS BEEN BARRED BY
PRIOR JUDGMENT IN CIVIL CASE NO. 6685;

2.     
IN FINDING THAT THE DEED OF SALE IN HER FAVOR DID NOT
OPERATE TO CONVEY OWNERSHIP TO HERSELF
DESPITE PROPER REGISTRATION;

3.     
IN SUSTAINING THE DELETION OF PLAINTIFF’S REGISTERED
CLAIM IN THE ORIGINAL TRANSFER CERTIFICATE OF TITLE WITHOUT JUDICIAL PRONOUNCEMENT;

4.     
IN FINDING THAT
ANDREA SANGALANG ACTED IN BAD FAITH IN THE PURCHASE OF THE PROPERTY IN QUESTION.”

Appellant contends that the principle of res judicata is inapplicable on the
ground that there is no identity of causes of action in Civil Case No. 6685 and
16885 in that in the former case for specific performance and consignation, the
cause of action was DBP’s
refusal to allow Balbino Caparas to redeem the foreclosed property whereas in
the latter, it is to quiet title over the property
redeemed by Caparas by virtue of a valid deed of sale in her (appellant) favor
on the premise that the land in question being a registered land and the sale
in her favor having been registered in good faith, convey upon her title over
the property in question.

We are of the opinion and so hold, that the appeal now before Us
is already barred by the final judgment in Civil Case No. 6685. The test of identity of causes of action
lies not in the form of an action but on whether the same evidence would
support and establish the former and the present causes of action.^[13]
The difference of actions in the aforesaid cases is of no moment. It has been held that a party cannot by
varying the form of action or adopting a different method of presenting his
case, escape the operation of the principle that one and the same cause of action
shall not be twice litigated between the same parties and their privies.^[14]

The special circumstance in this case which triggered both
parties to litigate is their conflicting interests over the property in
question which was brought about by the double sales executed in their favor by
Florentino, the original owner. It will
be recalled that on the basis of the evidence presented in the previous case, which is the
same set of evidence that appellant proposed to present in the case now under
review, appellant’s defense of priority of registration of the sale in the
previous case was declared ineffective after it was duly established that at
the time of appellant’s registration of the sale, appellant was already aware
of the previous sale in favor of Caparas, the knowledge of which was correctly
declared as equivalent to registration in favor of Caparas. The aforesaid findings of the lower court
were affirmed in toto
by the Court of Appeals, the decision of which became final and executory.

When a right or fact has been judicially tried and determined by
a court of competent jurisdiction, or an opportunity for such trial has been
given, the judgment of the court, so long as it remains unreversed, should be
con­clusive upon the parties, and those in privity with them in law and estate.^[15] Thus the claim of the appellant having been
denied as she was found to be in bad faith, appellant is now barred from
raising the same issue by varying the cause of action. Said issue is no longer subject to review by
any court. The law cannot allow parties
to trifle with the courts.

In view of the foregoing
discussion, appellant’s argu­ment that she has acquired title over the
property in question by virtue of her previous registration thereof and
therefore the decision in Civil Case No. 6685 should have directed for its
cancellation is likewise untenable. The
fact that the court failed to provide
for cancellation of appellant’s claim is immaterial. First, as above observed, the declaration that appellant’s knowledge
of the previous sale in favor of Caparas as equivalent to
registration, simply means that the annotation of her claim thereof, is of no force and effect, thus an order for its cancellation is not
necessary. Second, upon the finality of
the judgment in favor of Caparas, he is entitled to registration thereof.^[16] Thus on the basis of said judgment, DBP
allowed Caparas to redeem the property in question. It should be borne in mind, that Caparas is not an ordinary
redemptioner but a “vendee a
retro”, so the argument that a
redemption does not neces­sarily make him the owner thereof will not hold true
under the special circumstances of this case. Caparas having redeemed the property by virtue of a valid deed of redemp­tion
and consequently acquiring title
thereto free from all liens and
encumbrances, appellant cannot successfully seek the cancellation of his title
thereto.

The finding of bad faith on the part of appellant in the
acquisition and registration of the questioned property in the previous case is
final and may not be reopened. And
contrary to the pretension of appellant that the same is based on surmises and
conclusions, a reading shows it was arrived at based on the evidence before the
Court.

WHEREFORE, the decision appealed from is hereby AFFIRMED in
toto. Costs
against appellant.

SO ORDERED.

Yap, (Chairman), Narvasa, Melencio-Herrera, Cruz, Feliciano, and Samiento, JJ., concur.

^[1]
Page 40, Rollo, (December 7,
1978, Resolution).

^[2]
Pp. 20-21, Record on Appeal.

^[3]
The formal deed of absolute sale to be
executed upon the payment of the balance of P8,000.00 within forty-five
days from date.

^[4]
The deed was registered on January 31,
1961, and the adverse claim was annotated at the back of TCT 30714, with Entry
No. 14256, Vol. 31, whereas the claim of Caparas was registered on May 11,
1961.

^[5]
On February 16, 1961, DBP acknowledged
receipt of the cashier’s check per O.R. No. 692226.

5-a
Page 10, Brief for the Plaintiff-Appellant.

^[6]
March 16, 1961.

^[7]
Page 10, Decision CA, First Division,
p. 65, Record on Appeal, CA-G.R. No. 133952-R.

^[8]
November 13, 1963.

^[9]
Pp. 11-12, Decision, Civil Case No.
6685.

^[10]
CA-G.R. No. 133952-R, promulgated on
June 8, 1971.

^[11]
Civil Case No. 16885.

^[12]
Pp. 77-88. Record on Appeal.

^[13]
Garcia vs. Court of Appeals, 14 SCRA
771, Syllabus.

^[14]
Francisco vs. Blas, 93 Phil. 1;
Ipeckdjan Merchandising Co. vs. Court of Tax Appeals, L-15430, Sept. 30,
1963, 9 SCRA 72 & Malabon Restaurant, et al vs. Department of Labor, et al. 16 SCRA 159.

^[15]
Oberiano vs. Sobremisana,
L-4622, May 30, 1912.

^[16]
Section 78, PD 1529.