G.R. No. 229070 - Abad vs. Heirs of Gallardo

The case involves a parcel of land, Lot 5826-B, consisting of 5,000 square meters, situated in Capiddigan, Cordon, Isabela. This lot is part of a larger parcel of land (22,618 square meters) originally covered by Original Certificate of Title (OCT) No. P-2769, registered in the names of Spouses Miguel Abad and Agueda de Leon.
Upon the death of the spouses, the land was inherited by their three children: Dionisio, Isabel, and Enrique Abad. They co-owned the land and took possession of it.

On January 15, 1988, Dionisio and Isabel filed Civil Case No. 0591 against Enrique, seeking the annulment of a deed and Transfer Certificate of Title (TCT) No. T-131684, which was issued in Enrique's name after an Extrajudicial Settlement and Waiver of Rights.
On May 17, 1988, Enrique manifested that he had entered into a compromise agreement with his siblings. The case was dismissed on December 27, 1988, but reinstated on February 3, 1989, after Dionisio and Isabel claimed no compromise agreement had been reached.
On August 25, 1989, the case was dismissed again after Dionisio and Isabel manifested that a compromise agreement had been reached. A Deed of Partition was executed, dividing the land into three portions: 7,500 square meters for Dionisio, 5,000 square meters for Isabel, and 10,000 square meters for Enrique. However, the land was never physically partitioned, and TCT T-131684 remained in Enrique's name.

On May 15, 2003, an approved subdivision plan identified Lot 5826-B as the 5,000 square meters portion allocated to Isabel.
Isabel died on July 4, 2004, leaving Lot 5826-B to her son, Jose Eusebio Abad Gallardo, through a Deed of Donation.
On April 30, 2008, Dolores Lolita Gallardo (widow of Jose Eusebio) obtained a P75,000 loan from Eufemia Abad (Enrique's heir), secured by Lot 5826-B. A Kasunduan (agreement) was executed to document the transaction.
On November 15, 2015, Jonah Gallardo (one of Jose Eusebio's heirs) filed a police blotter alleging that Pollie Cezar (Eufemia's relative) had entered and cultivated the subject lot.

The Heirs of Jose Eusebio (respondents) filed a complaint for specific performance, surrender of title, redemption, and consignation with damages. They alleged that Eufemia refused to surrender the title to Lot 5826-B unless the loan was paid and demanded P350,000 instead of the original P75,000.
Petitioners (Heirs of Enrique) claimed exclusive ownership of the subject lot through hereditary succession and denied the allegations in the complaint.

The RTC granted respondents' motion for judgment on the pleadings, ruling in their favor. The court ordered the petitioners to comply with the Deed of Partition, surrender the title, and cease disturbing respondents' possession of the lot. The RTC also ordered Eufemia to accept the P75,000 consignation and declared the property legally redeemed.

Res Judicata: For res judicata to apply, there must be a final judgment on the merits in a prior case. In this case, Civil Case No. 0591 was dismissed without a final judgment on the merits, as the compromise agreement was never submitted to the court. Thus, res judicata does not apply.
Judgment on the Pleadings: Judgment on the pleadings is proper only when the answer fails to tender an issue or admits the material allegations of the complaint. Here, the petitioners' answer specifically denied the respondents' claims and raised issues regarding the ownership of the subject lot and the authenticity of the documents. Therefore, judgment on the pleadings was improper.
Trial on the Merits: The Court emphasized that disputes involving property rights should be resolved based on a full trial on the merits to ensure substantial justice. Technicalities should not deprive parties of their right to present evidence and defend their claims.

The Supreme Court reversed the RTC's Resolutions and remanded the case for trial on the merits. The motion for judgment on the pleadings was denied.