Facts:

In the case of Urbana Velasco Aroc, assisted by her husband, Celestino Aroc, as the plaintiff-appellant versus the People's Homesite and Housing Corporation (PHHC), Cirilo B. Garcia, and Feliciana Bito as the defendants-appellees (G.R. No. L-39674, January 31, 1978), the background involves a land dispute revolving around Lot 6, Block E-144, Pinahan Subdivision, Quezon City. The story begins in 1952 when Urbana Velasco Aroc and her family occupied half of the disputed lot, while another family, led by Alfonso Naparan, occupied the other half. By 1956, Aroc had constructed a house worth approximately PHP 3,270 and initiated the process to apply for the award and sale of her portion of the lot to PHHC, submitting applications in May and January of 1957, only to discover that both applications were missing from the corporation’s records. In 1966, upholding prior suggestions from PHHC officials, Aroc reapplied for the lot. However, the lot had already been awarded to defendants

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Facts:

Background and Occupation

• As early as 1952, plaintiff Urbana Velasco Aroc and her family began occupying one-half of the parcel of land known as Lot 6, Block E-144, Pinahan Subdivision, Quezon City, while another family occupied the other half.
• In 1956, the plaintiff constructed a house of strong materials, planted fruit-bearing trees, and fenced her portion of the lot, thereby establishing tangible improvements.
• That same year, she initiated efforts to obtain legal rights to her occupied portion by filing an application for the award and sale of the property with the People’s Homesite and Housing Corporation (PHHC).

Applications and Irregularities in the Award Process

• Plaintiff filed her first application for the award and sale in May 1956 and a second application in January 1957.
• It was later discovered that both applications were missing from the records of the defendant corporation, PHHC.
• Acting on official advice from a PHHC personnel, the plaintiff refiled her application on February 3, 1966.
• Despite her efforts, the lot was unlawfully and in bad faith awarded and sold to defendants Cirilo B. Garcia and Feliciana Bito, despite their disqualification (as evidenced by their prior purchase of another lot and ownership of various other properties).

Defendants’ Actions and Legal Responses

• Upon learning of the unauthorized award and sale, the plaintiff formally protested the transaction before the Board of Directors of PHHC.
• An investigating officer recommended the rescission of the conditional sale of Lot 6 and favored awarding the lot to the plaintiff and Alfonso Naparan.
• Notwithstanding the recommendation, PHHC executed a deed of sale in favor of the defendants-spouses, resulting in the issuance of Transfer Certificate of Title No. 106146 to them by the Quezon City Register of Deeds.

Prior Litigation and the Emergence of Res Judicata Issue

• A separate action, Civil Case No. Q-10442, was filed by defendant-appellee, Colonel Cirilo B. Garcia, against plaintiff Urbana Velasco Aroc and Juan Alfonso Naparan.
• In the prior case, Garcia alleged ownership of Lot 6 and sought to quiet title by removing the plaintiff’s claim of ownership and possession; the allegations centered on the fact that despite the plaintiff’s occupancy, Garcia had acquired the lot via a purchase from PHHC.
• The trial in Civil Case No. Q-10442 resulted in a judgment in favor of Garcia, declaring him the rightful owner, and ordering the plaintiff to vacate the premises; this judgment became final and executory.

Subsequent Litigation and Procedural Developments

• On January 22, 1968, the plaintiff initiated Civil Case No. Q-11807 seeking the annulment of the award and sale of Lot 6 to the defendants-spouses and the cancellation of the certificate of title.
• In response, defendant corporation and the defendants-spouses vigorously denied her allegations and asserted multiple defenses, including:
• Arguments that the complaint stated no cause of action and that the plaintiff was merely a squatter.
• Assertions that the award and sale to the defendants were legal, having complied with PHHC's requirements.
• Reliance on the judgment in the pending Civil Case No. Q-10442 to move for dismissal of the new complaint by invoking the doctrine of res judicata.
• After defendants-spouses amended their answer to include detailed factual allegations and attached the prior complaint, answer, and decision, the court granted their motion to dismiss based on res judicata.

Issue:

• Whether the final judgment rendered in Civil Case No. Q-10442, which was solely aimed at quieting title and recovering possession, constitutes a bar by res judicata to the present case (Civil Case No. Q-11807) for the annulment of the award and sale and the cancellation of the certificate of title.
• Whether there exists an identity of cause of action between the two cases, given that the first case dealt with quieting title while the second challenges the award, sale, and the authority of PHHC.
• Whether the additional issues in the present complaint—such as the bad faith of the sale, the violation of PHHC’s charter provisions, and the disqualification of the defendants-spouses—are matters that were not litigated in the prior action and thus may warrant a separate adjudication.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)