MARIETTA P. SANTOS AND FERMINA M. PANGANIBAN, PETITIONERS, VS. COURT OF APPEALS, PILIPINAS BANK, TIRSO ANTIPORDA, FELIPE GELLA, ED DAVID, PASTOR REYES, JR., ET. AL., RESPONDENTS.

Before us is a petition seeking the review and the consequent
reversal of the decision of respondent Court of Appeals dated March 18, 1991 in CA-G.R. CV No. 23857 entitled
“Marietta P. Santos and Fermina M. Panganiban vs. Pilipinas Bank, Tirso
Antiporda, Felipe Gella, Ed David, Pastor Reyes, Jr., and the unknown buyer of
subject Dasmariñas Village Property”.

The facts of the case, as gleaned from the record, are as
follows:

On August 23, 1979, the then Court of First Instance of Pasig,
Rizal in its Civil Case No. 28779, entitled, “Pilipinas Bank vs. Titan
Minerals, Inc., and/or Luis D. Santos
and/or First Integrated Bonding and Insurance Company, Inc”, rendered
judgment against defendants therein, ordering them to pay plaintiff Pilipinas
Bank, private respondent herein, jointly and severally the sum of P500,000.00.

Defendants Luis Santos and Titan Minerals did not appeal said
decision in Civil Case No. 28779, while the appeal of defendant First
Integrated Bonding and Insurance Co. was dismissed by the Court of Appeals on December 17, 1981 (p. 95, Rollo). On February 20, 1980 the trial court
issued an order of execution. The sheriff levied upon, among other pieces of
property, the residential property of the spouses defendant Luis D. Santos and
Marietta P. Santos, one of the petitioners herein, said residential property
being the subject-matter of the present case, located at Dasmariñas Village,
Makati, Metro Manila and covered by Transfer Certificate of Title No. 53110 of
the Register of Deeds of Makati. At the auction sale, private respondent Pilipinas Bank was the
highest bidder and a certificate of
sale was issued in its favor on April 24, 1980. Since in the meantime the subject property had been previously
mortgaged to the International Corporate Bank, and thereafter sold to said bank
in a public auction pursuant to an extra-judicial foreclosure
proceedings, herein private respondent Pilipinas
Bank, in order to protect its junior encumbrance in the subject property,
redeemed the property from International Corporate Bank on October 23, 1980 for
P1,421,131.31 (see p. 2, Decision of Court of Appeals in CA-G.R. CV No. 23857;
p. 40, Rollo; p. 2, Decision of Court of Appeals in CA-G.R. SP
No. 09210; p. 95 Rollo).

On April 24, 1981, Luis
Santos, petitioner Marietta P. Santos and Titan Minerals filed a complaint,
docketed as Civil Case No. 40946, against Pilipinas Bank for annulment of the
sale on execution and foreclosure sale and for damages, with prayer to suspend
the running of the redemption period and to enjoin Pilipinas Bank from
consolidating its ownership over the subject property. On July 2, 1981, said complaint was
dismissed without prejudice due to plaintiffs’ and their counsel’s failure to
appear. On August 18, 1981, plaintiffs
re-filed the complaint, thereafter docketed as Civil Case No. 42467. On December 7, 1981, said re-filed Civil
Case No. 42467 was dismissed upon motion of Pilipinas Bank. The order of dismissal was elevated to this Court by petition for review in G.R.
No. 59769, but on May 2, 1982, the Court issued a resolution denying the
petition for lack of merit.

On October 23, 1984, respondent Pilipinas Bank filed in Civil
Case No. 28779 an omnibus motion to cancel Transfer Certificate of Title No.
53110, to issue a new one in its name and to issue a writ of possession and/or
a break open order. The trial court
granted the omnibus motion on November 13, 1984.

Acceding to the request of petitioner Marietta Santos and her
husband Luis Santos to be accorded a chance
to repurchase the property, respondent Pilipinas Bank prepared and furnished
petitioner Marietta Santos a
draft Contract to Sell. Due to the
failure of the Santos spouses to come up with the proposed purchase price,
respondent Pilipinas Bank obtained an alias writ of execution on June 4,
1985. The Santos spouses, however,
succeeded in securing an order for the suspension of the effectivity of the
writ of possession for 30 days from June 21, 1985, citing alleged negotiations
between the parties for the repurchase of the property. Since petitioner Marietta Santos and her
husband, again failed to present any satisfactory offer, respondent Pilipinas
Bank obtained a second alias writ of possession on May 21, 1986.

On May 27, 1986, petitioner Marietta Santos and her husband filed
another motion for stay of execution which, not surprisingly, was opposed by
private respondent Pilipinas Bank. On May 30, 1986, the trial court issued an
order denying the motion for stay of
execution.

Petitioner Marietta Santos then filed with the Court of Appeals a
petition for certiorari which was later docketed as CA-G.R. SP No.
09210, contending that the trial court judge committed grave abuse of
discretion in refusing to stay the execution of the writ of possession on
equitable grounds and that her failure to repurchase the property was caused by
the “February
Revolution”, the “snap” election and the “economic
conditions of the country, where the
restructuring of the obligation is the order of the day” (see pp. 3-4, decision of the Court of Appeals in CA-G.R. SP No. 09210, pp. 96-97,
Rollo).

On April 30, 1987, the Court of Appeals rendered a decision dismissing the petition in
CA-G.R. SP No. 09210 (Kapunan [P], Puno, Marigomen, JJ.) Following the denial
of a motion for reconsideration, petitioner Marietta Santos filed before this
Court a petition for review docketed as G.R. No. 78640. On June 16, 1987, we issued a resolution
(Annex G of Petition, p. 99,
Rollo) denying the petition in G.R. No. 78640 but granting petitioner Marietta Santos seven (7) days from notice to enter and freely remove
her things from the premises subject of the petition.

On July 3, 1987, petitioners filed a complaint docketed as Civil
Case No. 17197 against private respondents Pilipinas Bank, Tirso Antiporda,
Fely Geda, Ed David, Pastor Reyes, Jr., and the unknown buyers of the subject Dasmariñas Village
property (who have now been identified as the Spouses Virgilio C. de Silva and Estrella de Silva in the present
petition). As concisely summarized by
the Court of Appeals, petitioners alleged that – –

. . . Their first cause of action is founded on equity including promissory estoppel
wherein they prayed that they be allowed to redeem the property or to allow
plaintiff Fermina M. Panganiban to purchase the property. The second
or alternative cause
of action is for alleged tortious acts committed by defendant and its corporate
officers in maliciously causing the execution of the judgment without waiting
for the finality of the Court of Appeals resolution denying due course to
plaintiff’s petition for certiorari to annul the order denying
plaintiff’s motion for stay of execution and the oppressive or abusive manner
by which the execution was carried out by the Sheriff in gross violation of the Supreme Court resolution allowing them
seven (7) days from receipt
thereof to enter and freely remove her things from the premises subject of the
petition which allegedly resulted in actual, moral and exemplary damages and attorney’s fees for which they a prayed for indemnification in still unascertained amounts.

(p. 3, decision of Court of
Appeals in CA-G.R. CV No. 23857, p. 106, Rollo)

The defendants in said Civil Case No. 17197, private respondents
herein, filed a Motion to Dismiss and For Order to Cancel Lis Pendens, based on
res judicata.

On June 24, 1958, the trial court issued an order dismissing the
complaint and cancelling the lis pendens. Petitioner thereupon interposed an appeal with the Court of Appeals
where the appeal was docketed as CA-G.R. CV No. 23857.

On March 18, 1991, the Court of Appeals in CA-G.R. CV No. 23857
rendered its decision (Mendoza V., Herrera O., [P] and Sempio-Dy, JJ.) the
dispositive portion of which reads as follows:

WHEREFORE, the Order appealed from is AFFIRMED with respect to the dismissal of the first cause of
action including the order for the cancellation of the lis pendens, but
REVERSED with respect to the dismissal
of the alternative cause of action for damages. In the latter case, subject to the rules on amendment of pleadings,
plaintiffs are granted a period of fifteen
(15) days from date of finality hereof to
amend their complaint by
deleting therefrom the first
cause of action and to specify in the body and prayer of the amended complaint the amount of damages prayed for and to pay the prescribed fees. No pronouncement
as to costs.

SO ORDERED.

(p. 115, Rollo.)

Hence, the instant recourse, on the following grounds:

1. Respondent Court of Appeals erred, on a matter of law, in holding that the first cause of action of
petitioners’ complaint is barred under the doctrine of res judicata.

2. Respondent Court of Appeals erred, on a matter of law, in
holding that the first cause of action of petitioners’ complaint is barred
under the doctrine of conclusiveness of
judgment.

3. Respondent Court
of Appeals erred, on a matter of law, in holding that the first cause of action
is barred under the ruling in Socorro L. Vda. de Sta. Romana vs.
Philippine Commercial and industrial
Bank, 118 SCRA 330 [1982].

(pp. 16-17, Rollo)

The sole issue involved in this case is whether or not res
judicata exists.

The elements of res judicata are [1] the presence of a
final former judgment; [2] the former judgment is by a court having
jurisdiction over the subject matter and the parties; [3] the former judgment
is a judgment on the merits; and
[4] there is, between the first and the
second action, identity of parties, of subject matter, and of cause of action (Philippine
Commercial and Industrial Bank vs. Pfleider, 65 SCRA 13 [1975]).

There is no question as to the presence of elements [1], [2] and
[3]. The decision in Civil Case No.
28779 is a final judgment on the merits rendered by the Regional Trial Court of
Pasig which undoubtedly has jurisdiction over said case. Likewise, the order dated May 30, 1986
(Annex E of petition, p. 89, Rollo) in Civil Case No. 28779, denying the motion
for stay of execution filed by
petitioner and her husband is a final order as its object is the execution of the aforementioned decision. Likewise, the order of June 24, 1988, issued
by the trial court in Civil Case No. 17197, dismissing the complaint therein is
a final order by a court of competent
jurisdiction. There is identity of
parties. Respondent Pilipinas Bank is
the plaintiff in Civil Case No.
28779 and one of the defendants in Civil Case No. 17197; Luis D. Santos is one
of the defendants in Civil Case
No. 28779, while Marietta P. Santos is one of the plaintiffs in Civil Case No.
17197; they both represent the same interest as they are husband and wife and
the property levied upon covered by Transfer Certificate of Title No. 53110 is
owned by them. The addition of
petitioner Fermina M. Panganiban as one of the plaintiffs in Civil Case No.
17197 does not militate against the element of identity of parties because the
joining of new parties does not remove the case from the operation of res
judicata (Anticamara vs. Ong, 82
SCRA 337 [1978]). Furthermore,
Fermina M. Panganiban represents the same interests of petitioners Marietta
Santos and Luis Santos as she proposes to repurchase the subject property in
lieu, of the Santos spouses. Moreover,
the principle of res judicata does not require absolute identity but
only substantial identity of parties (Anticamara vs. Ong, supra). Undoubtedly, there is identity of subject
matter, i.e., the residential property of the Santos spouses.

Is there identity of cause of action between Civil Case No. 28779
and Civil Case No. 17197?

The motion for stay of execution dated May 26, 1986, filed by
petitioner Marietta P. Santos and her husband, Luis D. Santos, in Civil Case
No. 28779 is based on equitable grounds – to the end that petitioner Fermina M.
Panganiban, mother of petitioner Marietta P. Santos may consummate the contract to repurchase the subject
property.

On the other hand, the cause of action relied upon by petitioner Marietta and her husband in the
complaint in Civil Case No. 17197 is founded on equity including promissory
estoppel, by reason of which they prayed that they be allowed to redeem the
subject property or that petitioner Fermina M. Panganiban be allowed to purchase said property.

As thus compactly delineated in seriatim, we cannot
discern any distinction between the causes of action in Civil Cases No. 28779
and No. 17197. There is thus, a perfect
conflux of the elements of res judicata.

Aside from the foregoing procedural considerations, there is
another equally insuperable obstacle, based
on substantive law, to the grant of the demands or prayer of petitioners.

Petitioners seek to repurchase the subject property pursuant to
the contract to sell submitted by respondent Pilipinas Bank to them for their
consideration. Petitioners cannot
invoke said contract to sell for the simple reason that it is not a perfected
contract and, therefore, is not binding. Respondent Pilipinas Bank sent a copy of the contract to sell to
petitioners for their acceptance. However, petitioner never communicated their acceptance to respondent
Pilipinas Bank. Article 1319 of the
Civil Code of the Philippines provides that the acceptance must be absolute and
that an “[a]cceptance made by letter or telegram does not bind the offerer
except from the time it came to his knowledge”. Due to petitioners’ failure to make an absolute acceptance of the
proposed contract to sell as well as their failure to communicate their
acceptance to respondent Pilipinas Bank, said contract to sell was not
perfected and is thus not binding upon Pilipinas Bank. That there was no acceptance was virtually
admitted by petitioners when they averred in their Reply to Comment that had
their motion for stay of execution been granted it “would have given the
Santos spouses and Fermina M. Panganiban the time to finalize negotiations and
to consummate the Contract to Sell with Pilipinas Bank” (p.179,
Rollo). Clearly then, the contract to
sell was still in the period of negotiation and was never perfected as to bind the herein parties.

WHEREFORE, the petition is hereby DENIED and
the decision of the Court of Appeals in CA-G.R. CV No. 23857 is hereby
AFFIRMED.

SO ORDERED.

Bidin, (Acting Chairman), Romero, and
Vitug, JJ., concur.

Feliciano, J., (Chairman), on
leave.