Heirs of Cornelio Miguel vs. Heirs of Angel Miguel

Res judicata in the concept of conclusiveness of judgment bars a subsequent action where the same issue was necessarily adjudicated in a prior final judgment between the same parties or their privies, even if the causes of action and subject matters differ; identity of parties and identity of issues suffice. Thus, a prior dismissal of a complaint for lack of cause of action because a simple donation is not subject to reformation conclusively settles the identity of the donated property as that described in the deed's technical description and the validity of the donation.

Cornelio Miguel and Nieves Malabad owned two parcels of land in Barrio Calero, Puerto Princesa City, Palawan: one covered by OCT No. S-14 and subdivided into Lots A to J of Psd-146880, and another covered by OCT No. G-211 and subdivided into nineteen lots under Psd-146879. Cornelio and Nieves were the parents of Angel Miguel and the petitioners' predecessor, Cornelio's other children; the petitioners are Cornelio's surviving children, while the respondents are Angel's widow and children. Cornelio sold nine of the lots in Psd-146880 to his children, with Lot G going to Angel, and kept Lot J for himself and Nieves. The dispute centers on a deed of donation inter vivos executed by Cornelio and Nieves in favor of Angel and the identity of the lot it conveyed.

Cornelio Miguel was the registered owner under Original Certificate of Title No. S-14 of a 93,844-square-meter parcel of land situated at Barrio Calero, Puerto Princesa City, Palawan. He subdivided the property into ten smaller lots designated as Lots A to J of Psd-146880. Cornelio sold nine of the lots to his children, with Lot G going to his son Angel Miguel, the respondents' predecessor-in-interest; Cornelio kept the remaining Lot J for himself and his wife, Nieves Malabad. Cornelio and Nieves also owned another property in Calero, Puerto Princesa City, with an area of 172,485 square meters, designated as Lot 2 of Psd-146879 and covered by OCT No. G-211, which was later subdivided into nineteen smaller lots.

On December 28, 1973, Cornelio and Nieves executed a deed of donation inter vivos in favor of Angel, donating two lots. One of the lots was described in the deed as "LOT 2-J, (LRC) 146880," with a technical description and an area of 9,197 square meters. Angel accepted the donation in the same instrument. The technical description in the deed corresponded to Lot J of Psd-146880, although the deed referred to the lot as Lot 2-J.

On March 25, 1977, Angel filed a petition for the issuance of a new owner's duplicate of OCT No. S-14, claiming that his father's copy had been eaten and destroyed by white ants. The Court of First Instance of Palawan, Branch II, granted the petition in Spl. Proc. No. 444, and the decision became final and executory. Subsequently, on December 12, 1977, Cornelio filed a complaint for annulment of the deed of donation, alleging that one of the properties subject of the donation, Lot 2-J of Psd-146879, had been given the technical description of Lot J of Psd-146880, a mistake attributed to the notary public or his secretary. This case was docketed as Civil Case No. 1185.

Angel later applied for the issuance of a certificate of title in his name over Lot J of Psd-146880, but the Registrar of Deeds denied the application. Angel then filed a petition for mandamus, docketed as Spl. Civil Action No. 1950. The Regional Trial Court of Palawan, Branch 48, in an Order dated February 27, 1987, directed the Registrar of Deeds to issue a certificate of title in Angel's name over Lot J of Psd-146880. The trial court found that the technical description in the deed of donation corresponded to Lot J of Psd-146880 and that the reference to "Lot 2-J" was a mere typographical error. The order became final and executory after the Registrar withdrew its appeal, and TCT No. 11349 was issued in Angel's name on December 29, 1987.

Angel later caused the subdivision of Lot J of Psd-146880 into four smaller lots, which he donated to each of his four sons, Peter Albert, Omar Angelo, Leo Antonio, and Oscar Joseph. TCT Nos. 20094, 20095, 20096, and 20097 were issued in their respective names. On July 7, 1994, the petitioners filed a complaint for declaration of nullity of Angel's TCT No. 11349 and its derivative titles, as well as the deeds of donation to Angel's sons. They claimed that the true intention of Cornelio and Nieves was to donate Lot 2-J of Psd-146879, not Lot J of Psd-146880, and that the typographical error rendered the deed void; an implied trust was thus created where Angel held Lot J of Psd-146880 in trust for the petitioners as heirs of the donors. They argued that Angel had no right to register the property in his name or to transfer it to his sons, and that the sons should reconvey the property to them. The respondents moved to dismiss, asserting that the cause of action was barred by prior judgment and that the petitioners lacked legal capacity to sue. The factual finding that the deed's technical description pertained to Lot J of Psd-146880, and that the reference to Lot 2-J was a clerical error, was central to the Supreme Court's res judicata analysis.

• Misapplication of Conclusiveness of Judgment: Petitioners argued that the Court of Appeals misapplied res judicata in the concept of conclusiveness of judgment because that doctrine precludes only the relitigation of a particular fact or issue in another action between the same parties on a different cause of action, and no issue resolved in Civil Case No. 1185 was being litigated anew in Civil Case No. 2735.
• Dismissal for Failure to State Cause of Action: Petitioners maintained that the complaint in Civil Case No. 1185 was dismissed for failure to state a cause of action, not because they had no cause of action; they had a cause of action but failed to sufficiently allege it.
• No Identity of Subject Matter or Cause of Action: Petitioners pointed out that there was neither identity of subject matter nor identity of cause of action between Civil Case No. 1185 and Civil Case No. 2735. The subject matter of the first was the deed of donation; the subject matter of the second was recovery of Lot J of Psd-146880. The cause of action in the first was reformation of the deed; in the second, reconveyance based on Angel's violation of an implied trust.
• Validity of Donation: Petitioners questioned the validity of the deed of donation executed by Cornelio and Nieves in favor of Angel as the foundation of their claim.

• Correctness of Lower Court Rulings: Respondents insisted on the correctness of the RTC Order dated March 21, 1995 and the Court of Appeals Decision dated January 31, 2003.
• Bar by Prior Judgment: Respondents asserted that petitioners' cause of action was barred by prior judgment in Civil Case No. 1185 because the issue of Angel's ownership and possession of Lot J of Psd-146880 had already been settled in Spl. Proc. No. 444, Civil Case No. 1185, and Spl. Civil Action No. 1950, all of which had been decided with finality.
• Reformation Not Available: Respondents contended that petitioners effectively sought correction or amendment of the deed of donation under Article 1364 of the Civil Code, but reformation was unavailable because the donation was a simple donation under Article 1366(1).
• Lack of Legal Capacity to Sue: Respondents claimed that petitioners had no legal capacity to sue because the right to seek reformation or annulment of the deed of donation pertained exclusively to Cornelio and Nieves as donors, was personal and intransmissible, and could not be claimed by petitioners.

• Res Judicata/Conclusiveness of Judgment: Whether the Court of Appeals correctly applied res judicata in the concept of conclusiveness of judgment in holding that Civil Case No. 2735 is barred by the final judgment in Civil Case No. 1185.
• Identity of Issues: Whether there is identity of issues between Civil Case No. 1185 and Civil Case No. 2735 despite the alleged differences in causes of action and subject matters.
• Nature of Dismissal: Whether the dismissal of Civil Case No. 1185 was for failure to state a cause of action or for lack of cause of action, and whether it necessarily settled the identity of the donated property and the validity of the donation.
• Validity of Donation and Property Identity: Whether the validity of the deed of donation and the identity of Lot J of Psd-146880 as the donated property were already conclusively settled in Civil Case No. 1185 and cannot be relitigated in Civil Case No. 2735.

• Res Judicata/Conclusiveness of Judgment: Yes. The Court of Appeals correctly applied conclusiveness of judgment; Civil Case No. 2735 is barred by the final judgment in Civil Case No. 1185. Under Rule 39, Section 47(c), only identity of parties and identity of issues are required, not identity of causes of action.
• Identity of Issues: Yes. The issue of the identity of the donated property and Angel's right over Lot J of Psd-146880 was necessarily adjudicated in Civil Case No. 1185. Identity of causes of action is not required for conclusiveness of judgment.
• Nature of Dismissal: The dismissal was for lack of cause of action, as the dispositive portion stated. Because a simple donation is not subject to reformation under Article 1366, the dismissal necessarily implied that the deed stood and the property donated was that described by its technical description.
• Validity of Donation and Property Identity: Already settled. The validity of the donation and the identity of Lot J of Psd-146880 cannot be relitigated against Angel's successors-in-interest without violating res judicata.

• Res Judicata/Conclusiveness of Judgment: The Court began with the elements of res judicata: (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 identity of parties, subject matter, and causes of action. Under Rule 39, Section 47, res judicata has two concepts: bar by prior judgment under Section 47(b) and conclusiveness of judgment under Section 47(c). Bar by prior judgment requires identity of parties, subject matter, and causes of action; conclusiveness of judgment requires only identity of parties and identity of issues. The final judgment in Civil Case No. 1185, a dismissal for lack of cause of action, was rendered by a competent court, and the petitioners and respondents were successors-in-interest of the original parties. Since the petitioners did not question identity of parties, the only remaining question was identity of issues. The Court held that identity of issues existed because the issue of the identity of the donated property and the validity of the donation had been necessarily adjudicated in Civil Case No. 1185. Thus, Civil Case No. 2735 was barred by conclusiveness of judgment.
• Identity of Issues: For conclusiveness of judgment, identity of cause of action is not required; identity of issue suffices. A right, fact, or matter in issue that was directly adjudicated or necessarily involved in the determination of a prior action by a competent court is conclusively settled and cannot be relitigated. The primary issue in Civil Case No. 1185 was whether the true intention of Cornelio and Nieves was to donate the property described in the deed, Lot J of Psd-146880. The dismissal of that case for lack of cause of action, because a simple donation is not subject to reformation under Article 1366, necessarily implied that the deed of donation stood and that the property donated was the parcel corresponding to the technical description in the deed. Since the technical description pertained to Lot J of Psd-146880, the issue of the identity of the donated property was settled. The claim in Civil Case No. 2735 that a clerical error prevented the deed from conforming to the donors' true intention merely reasserted the same issue of the true identity of the property. The issue of the validity of the donation was also settled in Civil Case No. 1185 and could not be resurrected against Angel's successors-in-interest.
• Nature of Dismissal: The Court rejected the petitioners' claim that Civil Case No. 1185 was dismissed for failure to state a cause of action rather than for lack of cause of action. The dispositive portion of the January 31, 1986 Order expressly stated that the amended complaint was dismissed "for lack of cause of action." The trial court had ruled that Cornelio and the petitioners had no cause of action for reformation because the deed was a simple donation not subject to reformation under Article 1366. The necessary implication was that the deed of donation remained valid and that the identity of the donated property was that described by its technical description. The Court thus treated the dismissal as a judgment on the merits for purposes of conclusiveness of judgment.
• Validity of Donation and Property Identity: The validity of the deed of donation and the identity of Lot J of Psd-146880 as the donated property had been settled with finality in Civil Case No. 1185. The petitioners, who were parties against Angel in Civil Case No. 1185, could not relitigate those issues against Angel's privies or successors-in-interest in Civil Case No. 2735 without violating res judicata. Consequently, Angel had properly sought registration of Lot J under TCT No. 11349 and had validly partitioned and donated it to his four children, who acquired TCT Nos. 20094, 20095, 20096, and 20097.

• Res Judicata — A final judgment by a court of competent jurisdiction bars a subsequent action. It has two concepts under Rule 39, Section 47: bar by prior judgment and conclusiveness of judgment. The elements are: (1) final judgment; (2) court with jurisdiction over the subject matter and parties; (3) judgment on the merits; and (4) identity of parties, subject matter, and causes of action for bar by prior judgment. The Court applied the doctrine to bar Civil Case No. 2735.
• Conclusiveness of Judgment — A fact or question in issue in a former suit and judicially passed on by a competent court is conclusively settled between the parties and their privies and cannot be relitigated in any future action on the same or a different cause of action. It requires only identity of parties and identity of issues, not identity of causes of action. The Court applied this because the issue of the identity of the donated property and the validity of the donation had been necessarily adjudicated in Civil Case No. 1185.
• Identity of Parties Through Privies/Successors-in-Interest — Identity of parties for conclusiveness of judgment exists not only when the parties are the same but also when they are privies or successors-in-interest. The petitioners were successors-in-interest of Cornelio in Civil Case No. 1185; the respondents were successors-in-interest of Angel in Civil Case No. 2735.
• Technical Description as Proof of Identity of Land — The technical description of a parcel of land embodies its identity; what is controlling is the technical description. The deed of donation's technical description pertained to Lot J of Psd-146880, so that was the property donated.
• Simple Donations Not Subject to Reformation — Under Article 1366(1) of the Civil Code, simple donations inter vivos wherein no condition is imposed cannot be reformed. Because the donation was simple, the dismissal of the reformation complaint in Civil Case No. 1185 necessarily implied that the deed stood and the donated property was that described in the deed.
• Necessary Implication of Dismissal for Lack of Cause of Action — A dismissal for lack of cause of action because reformation is unavailable necessarily settles the validity and terms of the instrument as written. The dismissal in Civil Case No. 1185 conclusively settled the identity of the donated property and the validity of the donation.

• "The petition fails. Res judicata in the concept of conclusiveness of judgment precludes the complaint in Civil Case No. 2735." — This states the core holding of the decision and identifies conclusiveness of judgment as the specific bar applied to the petitioners' complaint.
• "For res judicata in the concept of conclusiveness of judgment to apply, identity of cause of action is not required but merely identity of issue." — This is the canonical formulation of the distinction between bar by prior judgment and conclusiveness of judgment, and it supplies the controlling rule for the case.
• "As there can be no reformation of the deed of donation pursuant to Article 1366 of the Civil Code, the necessary implication and consequence of the Order dated January 31, 1986 in Civil Case No. 1185 is that the deed of donation stands and the identity of the property subject of the donation is that parcel of land which corresponds to the technical description in the deed of donation." — This explains why the prior dismissal for lack of cause of action necessarily settled the identity of the donated property and the validity of the deed.
• "The issue of the transfer pursuant to the deed of donation to Angel of Lot J of Psd. 146880 and, corollarily, his right over the said property has been necessarily involved in Civil Case No. 1185." — This identifies the precise issue that was conclusively settled in the prior case and could not be relitigated in Civil Case No. 2735.

• Nabus vs. Court of Appeals, 271 Phil. 768, 784 (1991) — The Court quoted this case to clarify conclusiveness of judgment: a fact or question in issue in a former suit and judicially passed on by a competent court is conclusively settled between the parties and their privies and cannot be relitigated on the same or a different cause of action, identity of parties and issues being the only identities required.
• Social Security Commission vs. Rizal Poultry and Livestock Association, Inc., G.R. No. 167050, June 1, 2011, 650 SCRA 50 — Cited for the elements of res judicata and the two concepts under Rule 39, Section 47.
• P.L. Uy Realty Corporation vs. ALS Management and Development Corporation, G.R. No. 166462, October 24, 2012, 684 SCRA 453 — Cited for identity of parties through successors-in-interest and for the rule that conclusiveness of judgment requires identity of parties and issues, not identity of causes of action.
• Republic vs. Espinosa, G.R. No. 171514, July 18, 2012, 677 SCRA 92 — Cited for the principle that the technical description embodies the identity of the land.
• VSD Realty & Development Corporation vs. Uniwide Sales, Inc., G.R. No. 170677, July 31, 2013, 702 SCRA 597 — Cited in connection with the technical description as proof of the identity of the land donated.

• Rule 39, Section 47(b), Rules of Court — Defines res judicata as bar by prior judgment; applies when there is identity of parties, subject matter, and causes of action. The Court distinguished it from conclusiveness of judgment.
• Rule 39, Section 47(c), Rules of Court — Defines conclusiveness of judgment; applies when there is identity of parties but not identical causes of action. The Court applied this provision to bar Civil Case No. 2735.
• Article 1366(1), Civil Code — Provides that there shall be no reformation of simple donations inter vivos wherein no condition is imposed. The Court relied on this to explain that the dismissal in Civil Case No. 1185 necessarily implied that the deed of donation stood and the donated property was that described in its technical description.

Maria Lourdes P.A. Sereno (Chief Justice, Chairperson), Lucas P. Bersamin, Martin S. Villaraa, Jr., and Bienvenido L. Reyes.