Case Digest (G.R. No. 68053)
Facts:
Petitioners Laura Alvarez, Flora Alvarez and Raymundo Alvarez sought review of the decision of the Intermediate Appellate Court and its denial of reconsideration. The dispute concerned Lots Nos. 773-A and 773-B of Murcia, Negros Occidental, originally part of Lot 773 registered under OCT No. 8804; title passed from Fortunato Santiago (1938) to Monico B. Fuentebella, Jr. (1955), to Arsenia Vda. de Fuentebella who sold to Rosendo Alvarez (1958), and Rosendo Alvarez sold the subdivided lots to Dr. Rodolfo Siason (1961).
Private respondents Jesus Yanes, Estelita Yanes, Antonio Yanes, Rosario Yanes and Iluminado Yanes had obtained a reconveyance judgment in Civil Case No. 5022 (October 11, 1963) against Rosendo Alvarez, but execution failed because Siason held titles; they then filed Civil Case No. 8474 (filed February 21, 1968) for recovery and damages. The Court of First Instance rendered judgment on July 8, 1974 ordering the Alvarezes to pay P20,000 as actual value and other damages; the Intermediate Appellate Court on August 31, 1983 affirmed only the P20,000 award and reversed the other damage awards; petitioners brought the present petition.
Issues:
- Did the petitioners timely and properly invoke the defenses of prescription and estoppel in the lower court?
- Are the private respondents' causes of action in Civil Case No. 8474 barred by statute of limitations or estoppel?
- Did the late Rosendo Alvarez become privy or party to the waiver manifested November 6, 1962, so as to bar the Yaneses' claims against his heirs?
- Could the liabilities arising from Rosendo Alvarez's sale of the lots be legally transmitted to the petitioners without violating law or due process?
Ruling:
The Court denied the petition and affirmed the judgment of the Intermediate Appellate Court insofar as it ordered the petitioners to pay P20,000 representing the actual value of Lots Nos. 773-A and 773-B, and the Court upheld the reversal of the awards of actual damages, moral damages and attorney's fees. The Court imposed costs against the petitioners and clarified that the petitioners' liability is limited to the extent of the value of their inheritance.
Ratio:
The Court held that the right of the Yaneses to the property had been finally adjudicated in Civil Case No. 5022 and therefore, under the doctrine of res judicata, the issue could not be reopened against parties and those in privity. Execution of the reconveyance proved impossible because the lots had passed to an innocent purchaser; equity and precedent required that the rightful owners recover the monetary equivalent rather than annul the title of a buyer in good faith. The Court further applied the transmissibility of obligations under Art. 774, Art. 776 and Art. 1311 of the Civil Code, holding that the obligations of the deceased may be enforced against his heirs up to the value of the inheritance.
Doctrine:
- *Res judicata* bars relitigation of issues finally adjudicated by a competent court and binds parties and those in privity.
- When land has passed to an innocent purchaser for value, the remedy of the dispossessed owner is to recover the monetary equivalent, not to annul the purchaser's title.
- The rights and obligations of a deceased person are transmissible to his heirs by operation of law.
- Heirs are liable for the obligations of the decedent only to the extent of the value of the inheritance.