JUAN SUMERARIZ AND LUISA SUMERARIZ, PLAINTIFFS-APPELLANTS, VS. DEVELOPMENT BANK OF THE PHILIPPINES AND PHIL­IPPINE SURETY AND INSURANCE CO., INC., DEFENDANTS-APPELLEES.

This appeal, from a decision of the Court of First Instance of
Manila, is before us upon certification by the Court of Appeals, only ques­tions
of law being involved therein.

The relevant facts are:  On
September 15, 1948, plain­tiffs herein, Juan Sumerariz,
and his wife, Luisa Sumerariz, constituted, in favor
of the Rehabilitation Finance Corporation – now Development Bank of the
Philippines, and hereinafter referred to as the Bank – a real estate mortgage
on two (2) parcels of land forming part of San Andres Subdivision, Manila, and
covered by Transfer Certificate of Title No.
1442, in their names, including a house to be constructed thereon, to
guarantee a P15,000.00 loan granted them by the Bank, payable within ten (10)
years, at a given monthly amortiza­tion. 
In view of plaintiffs’ failure to comply with the terms and conditions
of their contract, the Bank asked the sheriff of Manila
to take possession of the property and sell it at public auction.  After several postponements made upon
plaintiffs’ request, the sale was set for March 29, 1955. 
Upon the behest of Juan Sumerariz, made the
day before, the Bank agreed, however, to postpone the sale, if there was a
token payment of at least P100.00, before 9:00
a.m., the next day.  No such
payment having been made, the Bank bought the property, on March 29, for P8,
000.00, as the highest bidder.

Subsequently, the Bank repeatedly notified the plain­tiffs that
they could redeem the property within one (1) year, or not Iater than March 29, 1956, upon a down payment of P2,806.64,
the balance payable in ten (10) years, at the rate of P166.50 per month.  Instead of exercising the right of
redemption, on March 26, 1956, plaintiffs instituted Civil Case No. 29306, of
the Court of First Instance of
Manila, against the Bank and the sheriff of Manila, to set aside the
aforementioned foreclosure sale, upon the ground that the Bank had failed to
comply with its agreement to postpone the auction sale scheduled to be held on March 29, 1956.

On July 19, 1956,
while the case was pending in the trial Court, the Bank sold the property to
the Philippine Surety and Insurance Co., Inc., hereinafter referred to as the
Surety Co.  Subsequently, or on January 13, 1958, said Court rendered
a decision dismissing the complaint in Case No.29306, for the reason that
plaintiffs had not redeemed the property within the period prescribed by law therefor and that the Bank had thereby become its absolute
owner.  Said decision was, on November 5,
1959, affirmed by the Court of Appeals, in CA-G.R. No. 25077-R.  Plaintiffs petitioned the Supreme Court to
review by certiorari the decision of the Court of Appeals; but, we denied the
petition,^[1]
on February 5, 1960.

Soon later, or on March 16, 1960, plaintiffs com­menced the
present action, in the Court of First Instance of Manila, against the Bank and
the Surety Co., to annul the sale made to the latter by the Bank and to be
allowed to redeem the property in question. 
In their answer, de­fendants herein pleaded res
judicata and prescription.  They, moreover, set up a counter-claim for
rentals, for the use of said property, until actual delivery thereof to the
defendants, plus interest, attorney’s fees and other expenses.

After appropriate proceedings, said Court render­ed a decision
dismissing plaintiff’s complaint and ordering them to vacate the property in
question, as well as to pay P100.00 a month to the Bank, from March 30, 1960, until said property
is vacated by the plaintiffs, with costs. 
Plaintiffs appealed to the Court of Appeals, which certified the case to
us.  They maintain that the lower court
erred:

“1. In holding that the decision render­ed in Civil Case No.
29306, Court of First In­stance of Manila, entitled ‘Juan Sumerariz
and Luisa Sumerariz vs. Development Bank of the
Philippines and Sheriff of Manila’ is a bar to the present case.

“2. In holding that the filing of Civil Case No. 29306 in the Court
of First Instance of Manila x x x
did not suspend the period of redemption of the property in question.

“3. In not allowing the appellants to re­deem the properties in
question in accordance with the manifestation and willingness of the ap­pellee development Bank of the Philippines
to al­low the appellants to redeem their own properties.

“4. In requiring the appellants to pay rents for the properties in
question to the appel­lee Development Bank of the Philippines
from March 30, 1956 until
appellants delivered the said properties to the appellee
Bank.”

It is urged that the present case is not barred by the decision
in Case No. 29306 because there is, allegedly, no identity, either of parties,
or of subject-matter, or of cause of action, between the two cases.  This contention is mani­festly untenable.

Although not a party in the first case, the inclusion of the
Surety Co. as defendant in the case at bar does not detract from the legal
identity of both cases, because, by buying the property from the Bank, the
Surety Co. became merely the Bank’s successor in interest.1 Neither
does the absence, as party herein, of the sheriff, who was one of the defendants
in the first case, negate said identity, in­asmuch as the sheriff was but a
formal party in said pre­vious case, and is virtually a party in the present
proceedings, although not explicitly mentioned as such therein.2 

As stated in Republic v. Planas:1

“The inclusion of the surety as party defendant in Civil Case
No. 51080, where it is not so named in Civil Case No. 49206, can ­not be
invoked to nullify the effect on the for­mer case of the dismissal-order issued
in the latter proceeding.  It has been
ruled that where the one who is offering a judgment as an estoppel
and the party against whom it is being offered were both parties to the
action, in which such judgment was rendered, it is no objection that the action
included some additional parties who are joined in the second case.2 Conversely, the operation of the final judgment or
order in a previous case is not altered by the fact that somebody
who was not a party in that first action has been impleaded
in the second case.  Otherwise,
litigants can always re­new any litigation by the mere expedient of inclu­ding
new parties.”3

The subject-matter of both cases is, obviously, the same – the
property in question.  There is,
likewise, identity of the cause of action. 
In the first case, the issue was the validity of the auction sale in
favor of the Bank, which sale, plaintiffs contended, had been made in viola­tion
of their agreement with the Bank.  In the
case at bar, plaintiffs maintain that the conveyance by the Bank to the Surety Co. is invalid, and this
pretense is anchored upon the predicate that, when it took place, the property
did not belong to the Bank, the sale in its favor by the sheriff having been
made in violation of the alleged agreement aforementioned, which predicate had
been rejected by the Court in the previous case.  Similarly, the cause of action in the first case was based upon the alleged
right of the plain­tiffs to the property in question, upon the ground that its
sale to the Bank was illegal.  This
premise is, also, the corner­stone of plaintiffs’ cause of action in the case
at bar.1

Moreover, the same evidence would have sufficed to sup­port and
establish the cause of action in both cases. 
In Abes, et al. vs. Rodil,
et al.,2 it was held:

“The test to determine the existence of res
judicata is simply this:  ‘Would the same evidence support and
establish both the present and the former cause of action?’3 Here, the
answer is in the affirmative. The evidence both in the cadastral proceedings
and in the present reconveyance case, is directed at
the question of ownership.  It was held
that where the first case is one for reivindicacion and the
other for partition, the title of the case is unimportant.  For the same evidence would support the one
and the other.4 A similar rule obtains where the former cases were reivindicatory in char­acter and the second are land
registration proceedings.1 Another
example:  The first case was for
consolidation of title of the assignee in the land registration
proceedings.  This was objected to upon
the ground that the deed of as­signment was invalid as pactum
commissorium. 
The court gave due effect to said document and ordered that assignor’s
titles be cancelled and new ones issued to the assignee.  The second was an action for reformation upon
the averment that the deed of assignment mentioned in the first case was an
equitable mortgage.  This Court declared
that the issue in both suits is ‘whether the deed of assignment vested in Monte
de Piedad the ownership of the lots,’ and held
that the second action was barred by previous adjudica­tion in the land
registration case.2 And
where, as here, fraud was alleged in the first case and the same fraud was
relied upon in the second, the judgment in former case operated as res judicata.3

Again, the issue of ownership
of the property in ques­tion was settled in the first case. 
Accordingly, it may no
longer be litigated in the case at bar.

Under the second
assignment of error, plaintiffs main­tain that the period of one (1) year to
redeem the property in question was suspended by the institution of Case
No. 29306, on March 26, 1956,
or three (3) days before the expiration of said period.  We have not found, however, any statute or
decision in support of this pretense. 
Moreover, up to now plaintiffs have not exercised the right of
redemption.  In­deed, although they have
intimated their wish to redeem the property in question, they have not
deposited the amount necessary therefor.  It may not be amiss to note that, unlike
Section 30 of Rule 39 of the Rules of Court, which permits the extension of the
period of redemption of mortgaged properties,1 Section 3
of Commonwealth Act No. 459, in relation to Section 9 of Republic Act No. 85,
which governs the redemption of property mortgaged to the Bank, does not
contain a similar provision.2 Again
this question has been definitely settled by the decision in the previous case
declaring that plaintiffs’ right of redemp­tion has already been extinguished
in view of their failure to exercise it within the statutory period.

The third assignment of error’s predicated upon an alleged
willingness of the Bank to allow the plaintiffs to make such redemption.  The Bank denies, however, having agreed
thereto.  Besides, this question of fact
was not raised by plaintiffs in the lower court.  Hence, it cannot be entertained in this
appeal.3

The fourth assignment of error is premised on plain­tiffs’
alleged right of redemption, which was held, in the first case, to have expired
already.  It is thus clearly de­void of
merit.

WHEREFORE, the decision appealed from should be, as it is
hereby, affirmed, with costs against plaintiffs-appellants.

IT IS SO ORDERED.

Reyes, JBL, Dizon, Makalintal, Bengzon, Zaldivar, Sanchez, Ruiz Castro, Angeles, and Fernando, JJ., concur.

^[1]
G. R. No. L-16423.

1 Baguinguito
vs. Rivera, 56 Phil., 423; Barretto vs.
Cabangis, 37 Phil., 98, Fetalino
vs. Sanz, 44 Phil., 691; Clemente
vs. Heacock Co., L-12786, October 29,
1959.  See, also, Republic vs. Planas, L-21224, Septem­ber
27, 1966; Philippine Farming Corporation vs. Llanos, L-21-14,
August 14, 1965.

In Aguilar vs. Gamboa, L-10137, March
25, 1958, it was held:

“Where both the party offering
a judg­ment as an estoppel and the party against whom
it is offered were parties to the action in which the judgment is rendered, it
is no objection that the action included some additional parties
who are not joined in the present action x x x.”

2 Bacaling
vs. GSIS, L-20124, August 14,
1965.

1 L-21224, September 27, 1966.

2 Citing Aquino
vs. Sanvictores, L-3397, July 27, 1951.

3 Citing Alzua
vs. Johnson, 21 Phil., 308; Aquino vs. Sanvictores, supra; Samahang
Magsasaka vs. Chua Guan, L-7252, February 25, 1955; Suarez vs. Giok Hong Que, L-7927, November 18, 1955.

1 Chua Tan vs. Del Rosario,
57 Phil., 411; Ma-ao Sugar Central Co. vs.
Barrios, 79 Phil., 666; City of Ottumwa v. Nicholson, 143 N. W. 439, cited
in 1 Moran 1963 ed., p. 91; Juan vs. Go Cotay, 26
Phil., 328; Baquioro vs. Barrios, et al., 77
Phil., 120; Suarez vs. Municipality of Naujan,
et al., L-22282, Nov. 21, 1966; Angcao vs. Punzalan, L-20521, Dec. 28, 1964; Republic vs. Planas, supra; PHHC, et al. vs. Mencias, etc., et al., L-24114, August 16, 1967; Abes, et al. vs. Rodil, et
al., L-20996, July 30, 1966.

2 L-20996, July 30, 1966.

3 Citing Peñalosa
vs. Tuason, 22 Phil., 303, 322; Garcia vs.
Court of Appeals, et al., L-19783, July 30, 1965; Philippine Farming
Corporation, Ltd., etc. vs. Llanos, et al., L-21014, August 14, 1965.

4 Citing De Leon Vda. de Lontok vs. Padua,
75 Phil. , 548, 552, 553.

1 Citing Kidpalos,
et al. vs. Baguio Gold Miningo
Co., L-19940 to 19944, August 14, 1965.

2 Franco, et al. vs.
Monte de Piedad and Savings Bank, L-17610, April 22, 1963.

3 San
Diego, etc. vs. Cardona, et al., 70 Phil., 281, 284.

1 Enage
vs. Vda. e Hijas de
F. Escaño, 38 Phil. , 657.

2 Nepomuceno
vs. Rehabilitation Finance Corporation, L-14897, November 23, 1960.

3 Rule 46, Sec. 18; Toribio vs. Decasa, 55
Phil., 461; Sanagustin vs. Barrios, 68 Phil.,
475; Talento vs. Makiki,
93 Phil., 855; Traders Insurance & Surety Co. vs. Golangco, et al., L-64422. Sept. 24, 1954; Subido, et al., vs.
Lacson, et al., 55 Off. Gaz.
8281. See, also, Remonte vs. Bonto, L-19900, Feb. 28, 1966; Valdehueza
vs. Republic, L-21032, May 19, 1966; Republic vs. Venturanza, L-20417, May 30, 1966; Pi­pero
vs. Hechanova, L-22562, Oct. 22, 1966; City of
Manila vs. Garcia, L-26053, Feb. 21, 1967; Yu Kimteng
Const. vs. MRR, Co., et al., L-17027, March 3, 1967.