Balais-Mabanag vs. Register of Deeds of Quezon City

The issue of citizenship of the registered owner of land cannot anymore be raised to forestall the execution of a final and executory judgment where the objecting party had the opportunity to raise the issue prior to the finality of the judgment. The time for assailing the capacity of the winning party to acquire the land was during the trial, not during the execution of a final decision.

The case involves a dispute over a parcel of land in Quezon City originally registered in the name of Constancio P. Coronel. The Coronel heirs entered into a contract to sell the property to respondent Ramona Patricia Alcaraz, but later sold the same property to petitioner Catalina Balais-Mabanag at a higher price. The respondents filed a complaint for specific performance against the Coronels, and the petitioner intervened. The constitutional limitation on alien land ownership under the 1987 Constitution and the implementing provisions of Batas Pambansa Blg. 185 form the statutory backdrop, as the petitioner later sought to challenge Ramona's capacity to own land on the ground of alleged non-citizenship.

On January 19, 1985, the Coronel heirs executed a receipt of down payment stipulating that they received from respondent Ramona Patricia Alcaraz, through her mother respondent Concepcion D. Alcaraz, the sum of ₱50,000.00 as downpayment on the total purchase price of ₱1,240,000.00 for their inherited house and lot covered by TCT No. 119627. The receipt bound the Coronels to effect the transfer of the title in their names from their deceased father, Constancio P. Coronel, and upon presentation of the TCT in their name, to immediately execute the deed of absolute sale, with Ramona to pay the balance of ₱1,190,000.00.

On February 6, 1985, the property was transferred in the name of the Coronels under TCT No. 327043. On February 18, 1985, the Coronels sold the same property to the petitioner for the higher price of ₱1,580,000.00 after she delivered an initial sum of ₱300,000.00, and the Coronels rescinded their contract with Ramona by depositing her downpayment in the bank in trust for her. On February 22, 1985, Concepcion, through her attorney-in-fact, filed a complaint for specific performance and damages in the RTC of Quezon City against the Coronels, docketed as Civil Case No. Q-44134, and subsequently caused the annotation of a notice of lis pendens on TCT No. 327403.

On April 2, 1985, the petitioner had a notice of adverse claim annotated on the TCT. On April 25, 1985, the Coronels executed a deed of absolute sale in favor of the petitioner, and on June 5, 1985, TCT No. 351582 was issued in her name. The petitioner moved to have her answer in intervention admitted in Civil Case No. Q-44134, which was allowed on May 31, 1985. On May 19, 1986, Concepcion sought leave to amend the complaint to implead Ramona as co-plaintiff, and the amended complaint was admitted on June 25, 1986.

The RTC rendered its decision on March 1, 1989, ordering the defendants to execute a deed of absolute sale in favor of the plaintiffs, cancelling the petitioner's TCT, and ordering the defendants and intervenor to vacate the property. The decision was affirmed by the CA on December 16, 1991, and by the Supreme Court in G.R. No. 103577 on October 7, 1996, after which the decision became final and executory. The RTC issued a writ of execution on October 1, 1997, but the petitioner and the Coronels filed motions to stay execution, which were denied. Upon their failure to comply with the writ, the RTC ordered the Branch Clerk of Court on April 8, 1998 to execute the deed of absolute sale in favor of Ramona.

The petitioner thereafter filed multiple petitions and actions in various courts, including a special civil action for certiorari in the CA (C.A.-G.R. SP No. 55576) assailing the RTC's orders, which the CA dismissed on December 5, 2000. The CA found that it was the petitioner who did not comply with the sheriff's notice of implementation of the judgment through the writ of execution, and that her non-compliance justified the RTC's order directing the Branch Clerk of Court to execute the deed of absolute sale. The petitioner's motion for reconsideration was denied on April 16, 2002, leading to the present petition.

• Citizenship of the Buyer: The petitioner submitted that the CA erred in sustaining the registration by the Registrar of Deeds of the deed of absolute sale despite the lack of indication of the citizenship of the buyer of the subject property.
• Execution of the Deed by the Branch Clerk: The petitioner contended that the RTC did not see to it that the writ of execution was first served on her and that a demand for her compliance was first made; hence, the deed of absolute sale executed by the Branch Clerk of Court to implement the judgment was void.
• Qualification of Ramona to Own Land: The petitioner argued that Ramona was disqualified from owning land in the Philippines on the ground of non-citizenship, and that the RTC did not settle the question of the respondents' qualifications to own land.

• Res Judicata: The respondents maintained that the petitioner's objection to Ramona's qualifications was barred by res judicata, as the petitioner failed to raise the issue during trial or before the finality of the RTC judgment.
• Lack of Personality to Challenge: The respondents argued that the petitioner was not the proper party to challenge Ramona's qualifications to acquire land, as only the State, through the Solicitor General, has the personality to file a case challenging the capacity of a person to acquire or own land based on non-citizenship.
• Validity of the Deed Executed by the Branch Clerk: The respondents asserted that the deed of absolute sale executed by the Branch Clerk of Court was valid, as the petitioner's deliberate refusal to comply with the judgment warranted the RTC's directive under Rule 39 of the Rules of Court.

• Res Judicata: Whether the petitioner's objection to Ramona's citizenship and capacity to own land was barred by res judicata.
• Capacity to Institute Suit: Whether the petitioner was the proper party to challenge Ramona's qualifications to acquire land.
• Validity of the Deed Executed by the Branch Clerk: Whether the deed of absolute sale executed by the Branch Clerk of Court was valid despite the alleged lack of prior demand for the petitioner's compliance.

• Res Judicata: Yes. The petitioner's objection was barred by res judicata, as she failed to raise the issue of Ramona's citizenship during trial or before the finality of the RTC judgment, and was thereby deemed to have waived the objection pursuant to Section 1, Rule 9 of the Rules of Court.
• Capacity to Institute Suit: No. The petitioner lacked the capacity to challenge Ramona's qualifications, as only the Government, through the Solicitor General, has the personality to file a case challenging the capacity of a person to acquire or own land based on non-citizenship under Section 7, Batas Pambansa Blg. 185.
• Validity of the Deed Executed by the Branch Clerk: Yes. The deed of absolute sale executed by the Branch Clerk of Court was valid, as the petitioner's deliberate refusal to comply with the judgment warranted the RTC's directive under Section 10, Rule 39 of the Rules of Court.

• Res Judicata: The Court held that the petitioner did not deny or disprove the averment of Filipino citizenship made by Concepcion in the complaint, nor did she advert to the issue of citizenship after the complaint was amended to implead Ramona as co-plaintiff, despite her opportunity to do so. Under Section 1, Rule 9 of the Rules of Court, defenses and objections not pleaded either in a motion to dismiss or in the answer are deemed waived. The Court emphasized that parties and their counsel are enjoined to present all available defenses and objections so that the matter in issue can finally be laid to rest, and that without this rule, there will be no end to litigation. The Court further cited the doctrine in Gabuya vs. Layug that a judgment involving the same parties, the same facts, and the same issues binds the parties not only as to every matter offered and received to sustain or defeat their claims, but also as to any other admissible matter that might have been offered for that purpose. The Court also catalogued the numerous recourses taken by the petitioner and her counsel to assail Ramona's qualification, as detailed in A.C. No. 5469, all of which uniformly resulted in sustaining Ramona's right to acquire the property, warranting a finding of forum shopping against the petitioner's attorney. The Court applied the requisites of res judicata: (a) the former judgment must be final; (b) it must have been rendered by a court having jurisdiction of the subject matter and the parties; (c) it must be a judgment on the merits; and (d) there must be identity of parties, subject matter, and cause of action between the first and second actions. The Court quoted the guiding principle formulated by Vice Chancellor Wigram in Henderson vs. Henderson that where a given matter becomes the subject of litigation and adjudication by a court of competent jurisdiction, the court requires the parties to bring forward their whole case, and will not permit the same parties to open the same subject of litigation in respect of matters which might have been brought forward but were not, due to negligence, inadvertence, or even accident.
• Capacity to Institute Suit: The Court held that under Section 7, Batas Pambansa Blg. 185, the Solicitor General or his representative shall institute escheat proceedings against violators of the constitutional limitation on alien land ownership. Although the law does not categorically state that only the Government may attack the title of an alien transferee of land, it is nonetheless correct to hold that only the Government, through the Solicitor General, has the personality to file a case challenging the capacity of a person to acquire or own land based on non-citizenship. This limitation is based on the fact that the violation is committed against the State, not against any individual, and that in the event the transferee is adjudged to be not a Filipino citizen, the affected property reverts to the State, not to the previous owner or any other individual. Even assuming Ramona was legally disqualified from owning the subject property, the decision that voids or annuls her right of ownership would not inure to the petitioner's benefit, as the property would be escheated in favor of the State.
• Validity of the Deed Executed by the Branch Clerk: The Court found that the CA correctly determined that it was the petitioner who did not comply with the notice of the sheriff of the implementation of the judgment through the writ of execution, and that her non-compliance justified the RTC's order to the Branch Clerk of Court to execute the deed of absolute sale. The Court held that the petitioner's deliberate refusal to comply with the judgment called for the RTC to order the Branch Clerk of Court to execute the deed of absolute sale in favor of Ramona, which move was precisely authorized by Section 10, Rule 39 of the Rules of Court, which provides that if a judgment directs a party to execute a conveyance of land and the party fails to comply within the time specified, the court may direct the act to be done at the cost of the disobedient party by some other person appointed by the court, and the act when so done shall have like effect as if done by the party.

• Res Judicata — A final judgment or decree on the merits rendered by a court of competent jurisdiction is conclusive of the rights of the parties or their privies in all later suits and on all points and matters determined in the previous suit. The doctrine requires: (a) the former judgment must be final; (b) it must have been rendered by a court having jurisdiction of the subject matter and the parties; (c) it must be a judgment on the merits; and (d) there must be identity of parties, subject matter, and cause of action. The Court applied this doctrine to bar the petitioner's objection to Ramona's citizenship, as the petitioner had the opportunity to raise the issue during trial but failed to do so, and the judgment had already become final and executory.
• Estoppel per Rem Judicatam — Also known as cause of action estoppel and issue estoppel, this doctrine's purpose is two-fold: to prevent unnecessary proceedings involving expenses to the parties and wastage of the court's time, and to avoid stale litigations as well as to enable the defendant to know the extent of the claims being made arising out of the same single incident. The foundation principle is that parties ought not to be permitted to litigate the same issue more than once.
• Waiver of Defenses and Objections Not Pleaded — Under Section 1, Rule 9 of the Rules of Court, defenses and objections not pleaded either in a motion to dismiss or in the answer are deemed waived. The Court applied this rule to hold that the petitioner's failure to raise the issue of Ramona's citizenship during trial or before the finality of the judgment constituted a waiver of that objection.
• Capacity to Challenge Alien Land Ownership — Only the Government, through the Solicitor General, has the personality to file a case challenging the capacity of a person to acquire or own land based on non-citizenship, pursuant to Section 7, Batas Pambansa Blg. 185. This limitation is based on the fact that the violation is committed against the State, not against any individual, and that the affected property reverts to the State in the event the transferee is adjudged to be not a Filipino citizen.
• Execution of Judgments for Specific Acts — Under Section 10, Rule 39 of the Rules of Court, if a judgment directs a party to execute a conveyance of land and the party fails to comply within the time specified, the court may direct the act to be done at the cost of the disobedient party by some other person appointed by the court, and the act when so done shall have like effect as if done by the party.

• "The issue of citizenship of the registered owner of land cannot anymore be raised to forestall the execution of a final and executory judgment where the objecting party had the opportunity to raise the issue prior to the finality of the judgment. The time for assailing the capacity of the winning party to acquire the land was during the trial, not during the execution of a final decision." — This passage states the core ratio decidendi of the case, establishing the rule that objections to a party's capacity to own land must be raised before the finality of judgment.
• "In every action, indeed, the parties and their counsel are enjoined to present all available defenses and objections in order that the matter in issue can finally be laid to rest in an appropriate contest before the court. The rule is a wise and tested one, borne by necessity. Without the rule, there will be no end to a litigation, because the dissatisfied litigant may simply raise 'new' or additional issues in order to prevent, defeat, or delay the implementation of an already final and executory judgment." — This passage articulates the policy rationale behind the rule on waiver of defenses and the doctrine of res judicata, emphasizing the need for finality in litigation.
• "Although the law does not categorically state that only the Government, through the Solicitor General, may attack the title of an alien transferee of land, it is nonetheless correct to hold that only the Government, through the Solicitor General, has the personality to file a case challenging the capacity of a person to acquire or to own land based on non-citizenship. This limitation is based on the fact that the violation is committed against the State, not against any individual; and that in the event that the transferee is adjudged to be not a Filipino citizen, the affected property reverts to the State, not to the previous owner or any other individual." — This passage defines the rule on who has the legal personality to challenge alien land ownership, grounding it in the State's interest in escheat proceedings under Batas Pambansa Blg. 185.

• Gabuya vs. Layug, G.R. No. 104846, November 23, 1995, 250 SCRA 218 — Cited as controlling authority for the proposition that a judgment involving the same parties, the same facts, and the same issues binds the parties not only as to every matter offered and received to sustain or defeat their claims, but also as to any other admissible matter that might have been offered for that purpose and all other matters that could have been adjudged in that case.
• Custodio vs. Corrado, G.R. No. 146082, July 30, 2004, 435 SCRA 500 — Cited for the requisites of res judicata: the former judgment must be final, rendered by a court having jurisdiction, a judgment on the merits, and identity of parties, subject matter, and cause of action.
• Henderson vs. Henderson, 3 Hare 100, pp. 114-115 — Cited for the guiding principle of res judicata formulated by Vice Chancellor Wigram, requiring parties to bring forward their whole case and prohibiting the reopening of the same subject of litigation in respect of matters which might have been brought forward but were omitted due to negligence, inadvertence, or accident.
• Dela Cruz vs. Joaquin, G.R. No. 162788, July 28, 2005, 464 SCRA 576 — Cited for the definition of res judicata as a doctrine under which a final judgment or decree on the merits rendered by a court of competent jurisdiction is conclusive of the rights of the parties or their privies in all later suits.
• Republic vs. Court of Appeals, G.R. No. 101115, August 22, 2002, 387 SCRA 549 — Cited for the foundation principle of res judicata that parties ought not to be permitted to litigate the same issue more than once, and that when a right or fact has been judicially tried and determined by a court of competent jurisdiction, it should be conclusive upon the parties and those in privity with them.
• Foronda vs. Guerrero, A.C. No. 5469, August 10, 2004, 436 SCRA 9 — Cited as the administrative case cataloguing the petitioner's multiple recourses to assail Ramona's qualification, which resulted in a finding of forum shopping against the petitioner's attorney and his suspension from the practice of law for two years.

• Section 1, Rule 9, Rules of Court — Provides that defenses and objections not pleaded either in a motion to dismiss or in the answer are deemed waived. The Court applied this rule to hold that the petitioner's failure to raise the issue of Ramona's citizenship during trial constituted a waiver of that objection.
• Section 47(b), Rule 39, Rules of Court — Provides that a judgment or final order is conclusive between the parties and their successors in interest by title subsequent to the commencement of the action, with respect to the matter directly adjudged or as to any other matter that could have been raised in relation thereto. The Court cited this provision to support the application of res judicata.
• Section 10, Rule 39, Rules of Court — Provides that if a judgment directs a party to execute a conveyance of land and the party fails to comply within the time specified, the court may direct the act to be done at the cost of the disobedient party by some other person appointed by the court, and the act when so done shall have like effect as if done by the party. The Court applied this provision to uphold the validity of the deed of absolute sale executed by the Branch Clerk of Court.
• Section 7, Batas Pambansa Blg. 185 — Provides that the Solicitor General or his representative shall institute escheat proceedings against violators of the constitutional limitation on alien land ownership. The Court applied this provision to hold that only the Government, through the Solicitor General, has the personality to challenge the capacity of a person to acquire or own land based on non-citizenship.
• Canon 12, Code of Professional Responsibility — Provides that a lawyer shall exert every effort and consider it his duty to assist in the speedy and efficient administration of justice. The Court cited this provision in its discussion of the petitioner's attorney's violation of his duties through forum shopping, along with Rule 12.02 and Rule 12.04 of the Code.

Conchita Carpio Morales (Acting Chairperson), Teresita J. Leonardo-de Castro, Diosdado M. Peralta, and Roberto A. Abad.