ANGELICA G. CRUZ, ANNA MARIE KUDO, ALBERT G. CRUZ AND ARTURO G. CRUZ, PETITIONERS, VS. MARYLOU TOLENTINO AND THE OFFICE OF THE REGISTER OF DEEDS OF MANDALUYONG CITY, RESPONDENTS.

Cruz versus Tolentino

The Case

This is a petition for review on certiorari brought by the children of the late Alfredo Cruz against Marylou Tolentino and the Register of Deeds of Mandaluyong City. The petitioners sought the annulment of a deed of absolute sale and the cancellation of the transfer certificate of title issued in Tolentino's name, claiming that the sale was void because the special power of attorney relied upon by their mother had been extinguished by their father's death. The case matters because the Supreme Court never reached the merits of that claim. Instead, it teaches the strict operation of litis pendentia and res judicata as bars to a later suit, and it reminds us that a party who sleeps on an earlier judgment cannot reopen it through a second action.

Procedural History

The petitioners filed a complaint for annulment of sale and title, damages, and injunction before the Regional Trial Court of Mandaluyong City. Tolentino moved to dismiss, but the motion was denied. After trial, the Regional Trial Court dismissed the complaint on the ground of res judicata or, at best, litis pendentia, in view of its earlier decision in a prior case between the same parties. The petitioners appealed to the Court of Appeals, which denied the appeal. The Court of Appeals held that res judicata did not apply because the earlier decision was not shown to be final, but it ruled that the elements of litis pendentia were present. The petitioners then came to the Supreme Court by petition for review on certiorari, without first moving for reconsideration of the appellate decision.

Facts

Alfredo Cruz owned two parcels of land in Mandaluyong, covered by two transfer certificates of title. In July 1985 he executed a special power of attorney in favor of his wife, Purificacion, authorizing her to sell, transfer, convey, or mortgage the properties. Alfredo died in November 1985.

The properties later figured in two transactions with Tolentino. The first was a deed of absolute sale dated July 1992, purportedly signed by Alfredo and Tolentino, which was not notarized. The second was a deed of absolute sale dated December 1992, ostensibly executed by Alfredo through Purificacion, which was notarized and which mentioned the special power of attorney. The following day, the old titles were cancelled and new titles were issued in Tolentino's name.

In 1999, Tolentino filed an earlier case seeking to validate the December 1992 deed as to Purificacion's share and to collect the value of the property belonging to Alfredo's heirs. In 2000, the petitioners filed the present complaint for annulment, alleging that the special power of attorney was rendered ineffectual by Alfredo's death and that the sale was fraudulent. The trial court later rendered judgment in the earlier case, declaring the December 1992 deed and the special power of attorney valid. Purificacion died in 2011, and the petitioners substituted her in the earlier case.

Issues

• Whether or not litis pendentia may be validly applied to favor the pendency of the earlier case over the later case.
• Whether or not there was a valid sale of the property to Tolentino, or whether the contract was one of loan secured by a real estate mortgage.
• Whether or not the Court of Appeals was correct in ruling that there was no necessity to pass upon the true nature of the contract between Purificacion and Tolentino.

Applicable Provisions

The decision does not quote a statutory provision; it applies the requisites of litis pendentia as laid down in City of Makati versus Municipality of Taguig, which provides:

(a) identity of parties or at least such as represent the same interest in both actions; (b) identity of rights asserted and reliefs prayed for, the reliefs being founded on the same facts; and (c) the identity in the two cases should be such that the judgment that may be rendered in one would, regardless of which party is successful, amount to res judicata in the other.

These requisites determine whether the later action must be dismissed.

The decision also states the elements of res judicata as a bar by prior judgment:

For res judicata to serve as a bar to a subsequent action, the following elements must be present: (1) the judgment sought to bar the new action must be final; (2) the decision must have been rendered by a court having jurisdiction over the subject matter and the parties; (3) the disposition of the case must be a judgment on the merits; and (4) there must be as between the first and second action, identity of parties, subject matter, and causes of action.

These elements govern whether the earlier judgment forecloses the later suit.

Ruling

On the first issue, the Court held that litis pendentia existed. There was substantial identity of parties, because Tolentino and Purificacion were parties in both cases, and the petitioners, though originally strangers to the earlier case, substituted Purificacion after her death and shared a community of interest with her in disputing the deed. There was identity of rights and reliefs, because both cases hinged on the validity of the December 1992 deed, and the same documentary evidence was offered in both. And the judgment in one would amount to res judicata in the other, regardless of who prevailed.

On the second and third issues, the Court held that it could no longer pass upon the true nature of the contract. The validity of the December 1992 deed had already been decided with finality in the earlier case, affirmed by the Court of Appeals and denied by the Supreme Court. The Court took judicial notice of that finality. It held that the petitioners' argument that the earlier case was a sham would require relitigating the merits, which res judicata forbids. The Court noted that the petitioners did not even dispute the presence of the elements of litis pendentia.

Doctrine

First, litis pendentia, literally a pending suit, is a ground for dismissing a civil action where two actions are pending between the same parties for the same cause of action, so that one becomes unnecessary and vexatious; it rests on the policy against multiplicity of suits. Second, only substantial identity of parties is required, not absolute identity, and a community of interest suffices. Third, identity of reliefs exists where both cases turn on the same decisive question, here the validity of the same deed. Fourth, once a judgment becomes final, res judicata as a bar by prior judgment precludes any attempt to relitigate the merits, even under the claim that the earlier suit was a sham.

Disposition

The petition was denied, the decision of the Court of Appeals was affirmed, and costs were taxed against the petitioners.

Remember This

Memorize this line: litis pendentia requires only substantial identity of parties, and a final judgment on the same deed bars any later attempt to relitigate its validity. Examiners use this case to test the requisites of litis pendentia and res judicata, and the rule that finality closes the door to second-guessing an earlier suit.