Heirs of Panfilo F. Abalos vs. Bucal

A final judgment in a partition case does not bind persons who were not impleaded as parties therein, even if they are compulsory heirs of a defendant, where they acquired their interests from sources other than the defendant and are asserting rights distinct and separate from his. The plaintiff in a partition action bears the duty to implead not only co-heirs but all persons claiming interests in the subject property as indispensable parties; failure to do so renders the judgment ineffective against those not joined.

The parties are members of the Abalos family, descendants of spouses Francisco Abalos and Teodorica Ferrer, who died intestate on May 4, 1928 and June 2, 1945, respectively. The spouses were survived by five children: Maria, Faustino, Pedro, Roman, and Panfilo. The estate included several parcels of land in Binmaley, Pangasinan, including two fishponds locally known as "Duyao" and "Pinirat." Following the parents' deaths, Faustino administered the estate properties, and during his lifetime transferred some of the properties to his children (respondents herein) through sale, quitclaim, or renunciation of rights. Respondents also acquired certain parcels from Maria Abalos, another sibling, who sold her share to Romulo Abalos prior to the institution of any partition proceedings.

Francisco Abalos and his wife Teodorica Ferrer died intestate on May 4, 1928 and June 2, 1945, respectively, leaving several parcels of land in Binmaley, Pangasinan, including two fishponds locally known as "Duyao" and "Pinirat." They were survived by five children: Maria, who died single on March 20, 1972; Roman, who died single on June 10, 1944; Panfilo; Pedro, who died on May 11, 1971 and was survived by his only child, Danilo; and Faustino, whose children Aurora, Artemio, Romulo, and Mauro are among the respondents herein. Because Roman predeceased his mother Teodorica, only four siblings — Maria, Faustino, Pedro, and Panfilo — inherited the Duyao as pro-indiviso co-owners. Prior to any partition proceedings, respondents acquired interests in the subject properties through various transactions: on November 11, 1968, Maria sold her ¼ share of the Duyao to Romulo, who in turn sold the same to Aurora Bucal; Faustino likewise transferred portions of the properties to his children through deeds of sale, quitclaim, and renunciation of rights, some executed as early as 1978.

On October 30, 1978, Panfilo filed Civil Case No. 15465 for Partition, Annulment of Certain Documents, Accounting and Damages against his brother Faustino and his nephew Danilo, alleging that Faustino had fraudulently taken possession of properties belonging to other heirs and had failed to render an accounting. Notably, Panfilo did not implead respondents despite knowing that they had already acquired ownership of certain parcels and had declared the same in their names for taxation purposes. After Panfilo rested his case, Faustino and Danilo were deemed to have waived their right to present evidence, and on February 21, 1984, the RTC rendered judgment ordering partition, directing Faustino to reimburse Panfilo, and annulling all documents inconsistent with the partition. That judgment was affirmed by the Supreme Court on October 30, 1985 and became final.

When Panfilo began to execute the judgment in December 1985, attempting to take possession of the subject fishponds and causing the deputy sheriff to levy upon certain parcels, respondents filed Civil Case No. 16289 for Quieting of Title, Possession, Annulment of Document and Damages with Preliminary Injunction on January 8, 1986. They contended that they had acquired the properties prior to the institution of Civil Case No. 15465 and that the judgment therein was not binding upon them because they were not parties to that case. Panfilo countered that respondents' titles had already been declared null and void in the partition case and that they were barred by res judicata and estoppel. The trial court issued a writ of preliminary injunction on July 21, 1986, a ruling upheld by the CA and affirmed by the Supreme Court in G.R. No. 77965 on December 16, 1987, on the ground that respondents were third persons not bound by the partition judgment.

After trial on the merits, the RTC on May 25, 1992 declared Aurora Bucal the absolute owner of ¼ pro-indiviso of the Duyao and Panfilo the owner of ¾ pro-indiviso thereof, while confirming the adjudication of the Pinirat in Civil Case No. 15465, finding that the deed of sale executed by Faustino over the Pinirat in favor of Romulo and Mauro was simulated and intended to defraud the other heirs. Both parties appealed to the CA, which on August 31, 2001 modified the RTC decision: it declared the Duyao co-owned pro-indiviso by Aurora Bucal, Romulo Abalos, Panfilo Abalos, and Danilo Abalos (representing Pedro), to be divided equally; and it divided the Pinirat into three equal portions — one-third co-owned by Romulo and Mauro, one-third owned by Panfilo, and one-third for Danilo. The CA found that Faustino's transfer of his ¼ share of the Duyao to Romulo was valid, and that the Pinirat was Roman's advance legitime which, upon his death, was inherited by his surviving siblings, with Faustino holding only a 1/3 share that he could validly convey. Panfilo's motion for reconsideration was denied, prompting the present petition.

• Conclusiveness of Final Judgment: Petitioners maintained that the CA erred in failing to consider the finality of the Decision in Civil Case No. 15465, which had decreed the annulment of all documents and instruments transferring the subject properties that were inconsistent with the ordered partition. They argued that the CA's finding that respondents acquired ownership prior to the commencement of that case effectively modified the disposition previously ordered, disregarding the conclusiveness of a final judgment.
• Re-opening of Settled Factual Issues: Petitioners contended that sustaining the CA's conclusion would allow the re-opening of the factual issue of whether the documents constituting respondents' alleged title were valid — an issue already extensively litigated and supported by testimonial and documentary evidence in Civil Case No. 15465.
• Vested Rights: Petitioners asserted that, as the prevailing party in Civil Case No. 15465, they had acquired a vested right over the entire Duyao and ½ portion of the Pinirat, a right that respondents — who remained silent and did not intervene or question the judgment — could no longer defeat.
• Estoppel and Laches: Petitioners opposed the CA's failure to recognize that estoppel and laches had already set in to bar respondents from further pursuing their claims.

• Non-Party Status / Due Process: Respondents argued that to compel them to abide by the writ of execution and notice of levy issued in Civil Case No. 15465 would amount to deprivation of property without due process of law, because the decision rendered in that case was not binding upon them as they were not made parties thereto.
• Prior Acquisition of Ownership: Respondents maintained that they became owners of the subject properties prior to the institution of Civil Case No. 15465, having acquired the same not solely through Faustino but also from third persons such as Maria Abalos, and that their possession had always been in good faith, peaceful, public, exclusive, adverse, and continuous in the concept of absolute owners.
• Validity of Transfers from Faustino: Respondents contended that Faustino's transfer of his ¼ share of the Duyao to Romulo during his lifetime was perfectly legal, and that the Pinirat was Faustino's share which he validly sold to Romulo and Mauro.

• Res Judicata: Whether the principle of res judicata bars respondents from pursuing their claims in Civil Case No. 16289, given the final judgment in Civil Case No. 15465.
• Identity of Parties / Privity: Whether respondents, as children and heirs of Faustino, are in privity with the parties in Civil Case No. 15465 such that they are bound by the judgment therein.
• Duty to Implead Indispensable Parties: Whether Panfilo, as plaintiff in the partition case, had the duty to implead respondents as indispensable parties, and what the consequence of his failure to do so is.
• Scope of Partition: Whether shares in properties validly disposed of in favor of respondents prior to the partition case must be excluded from the order of partition.

• Res Judicata: No. Res judicata does not apply because the requisite of identity of parties is wanting; respondents were not impleaded in Civil Case No. 15465 and are considered third persons within the contemplation of Article 499 of the Civil Code.
• Identity of Parties / Privity: No. Although respondents are legitimate children of Faustino, they acquired the subject fishponds not solely through him but also from a third person, Maria Abalos; they are asserting their own rights and interests distinct and separate from Faustino's hereditary claim, and thus cannot be considered privies to the judgment in Civil Case No. 15465.
• Duty to Implead Indispensable Parties: Yes. Panfilo, as plaintiff in the partition case, was responsible for impleading all indispensable parties — not only co-heirs but all persons claiming interests in the property subject of partition; his omission cannot prejudice respondents, who are strangers to the first case and not bound by its judgment without violation of due process.
• Scope of Partition: Shares in properties validly disposed of in favor of respondents prior to the partition case must be excluded from the order of partition; only properties owned in common may be the object of an action for partition.

• Res Judicata: The requisites for res judicata are: (1) the judgment must be final; (2) the court must have jurisdiction over the subject matter and the parties; (3) the disposition must be a judgment on the merits; and (4) there must be identity of parties, subject matter, and causes of action. In the instant case, the fourth requisite — particularly identity of parties — is clearly wanting. This Court had already settled in G.R. No. 77965 that respondents are third persons with respect to Civil Case No. 15465 because they were not impleaded as defendants therein. All those who did not participate or intervene in the partition case are considered third persons under Article 499 of the Civil Code, which provides that partition of a thing owned in common shall not prejudice third persons. Intervention is not compulsory but merely optional and permissive; respondents, as persons in actual possession of the fishponds they claimed to own, had every right to wait until their possession was disturbed before vindicating their rights through an independent action.

• Identity of Parties / Privity: Even if res judicata requires not absolute but substantial identity of parties, substantial identity exists only when the additional party acts in the same capacity or is in privity with the parties in the former action. While respondents are legitimate children and relatives by affinity of Faustino, their documents of acquisition show they became owners of the subject fishponds not through Faustino alone but also from a third person, Maria Abalos. Respondents are asserting their own rights and interests, which are distinct and separate from Faustino's claim as a hereditary heir of Francisco Abalos. Hence, they cannot be considered privies to the judgment in Civil Case No. 15465. Petitioners relied solely on their untenable defense of res judicata instead of contesting the genuineness and due execution of respondents' documentary evidence.

• Duty to Implead Indispensable Parties: Panfilo had personal knowledge that respondents had acquired ownership of the properties prior to the filing of Civil Case No. 15465, that they were in actual possession thereof, and that they had declared the lands in their names for taxation purposes — he resided in the same locality. Despite this, and despite the fact that the defendants in the partition case raised the point that Faustino was not the owner of some of the lands and that they belonged to others not parties to the case, Panfilo did not implead respondents. Under Section 1, Rule 69 of the Rules of Court, in an action for partition, all other persons interested in the property shall be joined as defendants. Not only co-heirs but all persons claiming interests or rights in the property subject of partition are indispensable parties. Without their presence, the judgment cannot attain real finality against them; being strangers to the first case, they are not bound by the decision rendered therein, otherwise they would be deprived of their constitutional right to due process. As Panfilo's successors-in-interest, petitioners must suffer the consequences of his evident omission.

• Scope of Partition: A complaint for partition seeks, first, a declaration of co-ownership and, second, the conveyance of the plaintiff's lawful shares. Only properties owned in common may be the object of an action for partition; it will not lie if the claimant has no rightful interest over the subject property. The issue of co-ownership must first be resolved before partition can be effected. Accordingly, only the shares in the lots determined to have been co-owned by Panfilo, Faustino, and Danilo could be included in the order of partition, and shares in the lots validly disposed of in favor of respondents must be excluded. The Court found no reason to depart from the CA's findings of fact and the partition it ordered, as these are amply supported by evidence on record. Factual issues are beyond the Court's jurisdiction in a petition for review under Rule 45, which is limited to questions of law.

• Res Judicata — Requisites — For the preclusive effect of res judicata to apply, the following requisites must concur: (1) the judgment or order 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 first case must be a judgment on the merits; and (4) there must be between the first and second action, identity of parties, subject matter, and causes of action. In this case, the fourth requisite — identity of parties — was absent because respondents were not impleaded in the prior partition case.

• Substantial Identity of Parties — Privity Requirement — Even where res judicata requires not absolute but substantial identity of parties, substantial identity exists only when the additional party acts in the same capacity or is in privity with the parties in the former action. Heirs of a party are not automatically in privity where they acquired their interests from a third person and are asserting rights distinct and separate from those of the party in the prior case.

• Third Persons in Partition — Article 499, Civil Code — All those who did not in any way participate or intervene in a partition case are considered third persons within the contemplation of Article 499 of the Civil Code, which provides that the partition of a thing owned in common shall not prejudice third persons. A partition judgment does not bind third persons who were not impleaded.

• Indispensable Parties in Partition Actions — In an action for partition, not only the co-heirs but all persons claiming interests or rights in the property subject of partition are indispensable parties. The plaintiff bears the duty to implead all such persons; without their presence, the judgment cannot attain real finality against them. Failure to implead indispensable parties renders the judgment ineffective against those not joined, who cannot be bound without violation of due process.

• Two Stages of Partition — An action for partition is at once an action for declaration of co-ownership and for segregation and conveyance of a determinate portion of the properties involved. The issue of ownership or co-ownership must first be resolved before partition can be effected; only properties owned in common may be the object of partition, and shares validly disposed of in favor of third persons must be excluded from the order of partition.

• Intervention Is Permissive, Not Compulsory — Intervention is not compulsory or mandatory but merely optional and permissive. Persons in actual possession of property they claim to own may wait until their possession is disturbed before taking steps to vindicate their rights; they are not duty-bound to intervene in a case to which they are not parties.

• "In the instant case, it is the responsibility of Panfilo as plaintiff in Civil Case No. 15465 to implead all indispensable parties, that is, not only Faustino and Danilo but also respondents in their capacity as vendees and donees of the subject fishponds. Without their presence in the suit the judgment of the court cannot attain real finality against them. Being strangers to the first case, they are not bound by the decision rendered therein; otherwise, they would be deprived of their constitutional right to due process." — This passage articulates the ratio decidendi: the plaintiff in a partition action bears the burden of impleading all indispensable parties, and the judgment cannot bind those not joined, as doing so would violate due process.

• "It is only properties owned in common that may be the object of an action for partition; it will not lie if the claimant has no rightful interest over the subject property." — This defines the scope of partition actions and explains why shares validly transferred to third persons must be excluded from the order of partition.

• "Respondents are asserting their own rights and interests which are distinct and separate from those of Faustino's claim as a hereditary heir of Francisco Abalos. Hence, they cannot be considered as privies to the judgment rendered in Civil Case No. 15465." — This clarifies the privity requirement for res judicata in the context of heirs who acquired property from multiple sources, not solely from the party in the prior case.

• Khemani vs. Heirs of Anastacio Trinidad, G.R. No. 147340, December 13, 2007 — Cited for the definition of res judicata and the rule that substantial identity of parties requires the additional party to act in the same capacity or be in privity with parties in the former action.
• Heirs of Igmedio Maglaque vs. Court of Appeals, G.R. No. 163360, June 8, 2007 — Cited for the four requisites of res judicata.
• Sepulveda, Sr. vs. Pelaez, G.R. No. 152195, January 31, 2005 — Cited for the doctrine that not only co-heirs but all persons claiming interests in property subject of partition are indispensable parties.
• Reyes-de Leon vs. Del Rosario, G.R. No. 152862, July 26, 2004 — Cited for the rule that the issue of co-ownership must first be resolved in an action for partition before division can be effected, and that partition will not lie if the claimant has no rightful interest over the subject property.
• Dapar vs. Biascan, G.R. No. 141880, September 27, 2004 — Cited for the doctrine that an action for partition is at once an action for declaration of co-ownership and for segregation and conveyance of a determinate portion of the properties.
• Galicia vs. Manliquez Vda. De Mindo, G.R. No. 155785, April 13, 2007 — Cited for the principle that strangers to a case are not bound by the decision rendered therein, otherwise they would be deprived of due process.
• Catapusan vs. Court of Appeals — Cited within the Reyes-de Leon quotation for the rule that in actions for partition, the court must first determine the existence of co-ownership before ordering division.

• Article 499, Civil Code — Provides that the partition of a thing owned in common shall not prejudice third persons, who shall retain their rights before the division was made. Applied to hold that respondents, as non-parties to the partition case, are third persons whose rights are not affected by the judgment therein.
• Section 1, Rule 69, Rules of Court — Provides that in an action for partition, all other persons interested in the property shall be joined as defendants. Applied to hold that Panfilo had the duty to implead respondents as indispensable parties in Civil Case No. 15465.
• Rule 45, 1997 Rules of Civil Procedure — Governs petitions for review on certiorari, limiting the Supreme Court's power to questions of law. Applied to confine the Court's review to legal questions and to defer to the CA's factual findings.

Chief Justice Reynato S. Puno (Chairperson), Associate Justice Angelina Sandoval-Gutierrez, Associate Justice Renato C. Corona, and Associate Justice Teresita J. Leonardo-De Castro concurred. No separate concurring opinions were written.