Title
Estate of Sotto vs. Palicte
Case
G.R. No. 158642
Decision Date
Sep 22, 2008
Heirs dispute property redemption; Supreme Court upholds Matilde's ownership, bars estate's claim under res judicata.
ownership dispute
properties
res judicata

Case Summary (G.R. No. 158642)

The Originating Civil Case, Redemption, and Matilde’s Ownership

The late Filemon Y. Sotto had four children: Marcelo Sotto, Pascuala Sotto Pahang, Miguel Barcelona, and Matilde S. Palicte. In June 1967, Pilar Teves and other heirs of Carmen Rallos, Filemon’s wife, filed a complaint with the RTC Cebu City, Branch 16 seeking recovery of properties inherited by Filemon from Carmen, and prayed for damages. The case was docketed as Civil Case No. R-10027. Judgment was rendered in favor of Pilar Teves and the other heirs, and the judgment included damages in the amount of P233,963.65.

To satisfy the damages judgment, six parcels of land and two residential houses from the estate were levied and sold at a public auction on 5 July 1979. During the redemption period, Matilde, as one of Filemon’s heirs, redeemed four lots—Lot Nos. 1049, 1051, 1052, and 2179-C (“subject properties”). On 9 July 1980, the Deputy Provincial Sheriff executed a Deed of Redemption, approved by the Clerk of Court. Matilde also redeemed four lots within the period, while Pascuala redeemed one of the two residential houses located in Lahug, Cebu City. On 24 July 1980, Matilde moved to transfer the titles of the subject properties to her name, but the trial court denied the motion and declared the Deed of Redemption null and void, reasoning that although Matilde was a declared heir in SP. PROC. No. 2706-R, she allegedly did not qualify as a successor-in-interest who could redeem.

Appellate Correction and the Opportunity to Join as Co-Redemptioners

Matilde filed a petition for review with this Court. On 21 September 1987, in Palicte v. Ramolete and Sotto, the Court reversed the trial court’s order declaring the deed void. In granting relief, the Court also provided the other heirs a period of six months to join as co-redemptioners in the redemption made by Matilde before the court could grant the motion to transfer titles to Matilde’s name. The record showed that the other heirs did not join within that six-month period.

Accordingly, on 5 October 1989, the RTC Cebu City, Branch 16, issued an Order in Civil Case No. R-10027 granting Matilde’s motion and directing the Register of Deeds to register the Deed of Redemption and issue new certificates of title in Matilde’s name.

Pascuala’s Waiver, Later Challenge, and Repeated Failure to Escape Preclusion

On 25 November 1992, Pascuala signed a document renouncing her rights over the subject properties covered by the Deed of Redemption. Despite that waiver, she filed a complaint for nullification of waiver of rights on 23 September 1996 before the RTC Cebu City, Branch 8, docketed as Civil Case No. CEB-19338. The trial court dismissed the complaint on the ground of laches. Pascuala’s subsequent petition for certiorari to the Court of Appeals, docketed as CA-G.R. SP No. 44660, was dismissed on 21 November 1997. She then filed a petition for review in this Court docketed as G.R. No. 131722, which the Court denied on 4 February 1998, citing failure to pay docket fees and that the certification against forum shopping had merely been signed by her counsel.

Attempts by Other Heirs to Join Redemption and the Effect of Earlier Final Orders

In November 1998, the heirs of Miguel filed in RTC Cebu City, Branch 16 a Motion for Reconsideration of the Order dated 5 October 1989 in Civil Case No. R-10027, seeking to set aside the order to include them as co-redemptioners of the subject properties redeemed by Matilde. The RTC denied the motion in an Order dated 25 April 2000, grounding its denial on laches and res judicata. The heirs then filed a petition for certiorari and prohibition in the Court of Appeals (CA-G.R. SP No. 60225), which the appellate court dismissed on 10 January 2002, affirming the trial court.

The heirs filed a petition for certiorari with this Court, docketed as G.R. No. 154585, but the Court dismissed it on 23 September 2002 for failure to file within the period fixed and for lack of showing that the appellate judgment was tainted with grave abuse of discretion.

The Partition Case and Its Dismissal for Prior Judgment

Separately, on 10 September 1999, the heirs of Marcelo and the heirs of Miguel filed against Matilde an action for partition of the subject properties, docketed as Civil Case No. CEB-24293 before the RTC Cebu City, Branch 20. The heirs of Pascuala did not join. On 15 November 1999, the trial court dismissed the case. The Court of Appeals, in CA-G.R. CV No. 68239, dismissed the appeal on 29 November 2002, holding that the action was barred by prior judgment. The later appellate proceedings in CA-G.R. CV No. 68239 remained pending in this Court at the time of the present decision, but the earlier final orders remained executory except for that pending case.

Probate Proceedings: The Estate’s Motion to Require Turnover and the Probate Court’s Reversal

The present controversy originated in the probate court. The estate, represented through its administrator, filed in SP. PROC. No. 2706-R a motion requiring Matilde to turn over and account for the subject properties allegedly owned by the estate. On 23 July 2002, the probate court issued an Order granting the motion. The probate court reasoned that although redemption had been made under Matilde’s name, it was the estate that provided the funds to redeem. It thus treated Matilde as a trustee holding the subject properties in a fiduciary capacity and held that under Article 1455 of the Civil Code, she was required to return and account for the properties.

Matilde moved for reconsideration. The probate court then granted reconsideration and set aside its earlier Order in its 20 December 2002 Order, and then denied the estate’s motion for reconsideration in its 2 June 2003 Order. In setting aside the July 23, 2002 Order, the probate court explained that it took judicial notice of the Court of Appeals’ decision in CA-G.R. CV No. 68239, promulgated on 29 November 2002, involving the same four parcels. It also observed that, according to the Court of Appeals, actions contesting Matilde’s rights to the subject properties were barred by prior judgment, referencing the earlier judgments affirming Matilde’s rights, including those arising from the redemption and related proceedings. The probate court adopted these observations, emphasizing that the same cause of action should not be litigated twice and that the trial court should respect appellate orders. It therefore denied the estate’s motion to require turnover for lack of merit.

The Issues Raised on Review

The estate, as petitioner, framed the issues as follows: first, whether the decision of this Court in G.R. No. 55076 was res judicata to the issues raised in the probate court motion for accounting and surrender; and second, whether the decision of the Court of Appeals in CA-G.R. CV No. 68239, where the petitioner in the partition case was not a party and where a motion for reconsideration was pending at the time, likewise operated as res judicata against the probate issues.

The Court’s Ruling: Petition Denied and Orders Affirmed

The Court denied the petition and affirmed the probate court’s Orders dated 20 December 2002 and 2 June 2003. The Court held that the probate proceedings were barred by prior judgments under the doctrine of res judicata in its concept of bar by prior judgment. The Court anchored its discussion on Section 47(a), Rule 39 of the Rules of Court, which provides that, in cases involving the administration of an estate of a deceased person, a judgment or final order rendered by a court with jurisdiction may be conclusive upon the administration and related matters. The Court further explained that res judicata means that when a right or fact had already been judicially tried on the merits by a court of competent jurisdiction, the final judgment becomes conclusive upon the parties and those in privity with them and operates as an absolute bar to subsequent actions involving the same claim or cause of action. The Court reiterated that the policy behind res judicata is stability in final judgments and an end to litigation, even at the risk of occasional error.

Legal Basis and Reasoning: All Requisites of Res Judicata Were Present

The Court restated the requisites for res judicata: the first judgment must be final; it must have been rendered on the merits; it must have been issued by a court with jurisdiction over the subject matter and parties; and there must be identity between the first and second actions as to parties, subject matter, and cause of action.

Applying those requisites, the Court found that all elements were present. It noted that the estate’s probate motion sought to require Matilde to turn over and account for the same subject properties that had been the focus of earlier final judgments. The Court traced the preclusion chain: In G.R. No. L-55076, Matilde had challenged the trial court’s invalidation of her redemption; the Court upheld the validity of Matilde’s redemption and granted the other heirs a period of six months to join as co-redemptioners. After the period lapsed without participation, the trial court in Civil Case No. R-10027 directed that the Register of Deeds issue new titles to Matilde. The Court also recited the related litigation in which Matilde’s ownership and the inability of other claimants to pursue their rights further were sustained, including Civil Case No. CEB-19338 where Pascuala’s action was dismissed for laches, the Court of Appeals’ dismissal of her subsequent certiorari petition, and this Court’s denial of her petition for review in G.R. No. 131722.

The Court further noted the denial of the heirs’ later bid to be included as co-redemptioners in Civil Case No. R-10027, along with the subsequent dismissal of their petitions for certiorari in the Court of Appeals and this Court. The Court then referred to Civil Case No. CEB-24293 (partition), which the trial court dismissed and which the Court of Appeals dismissed on the ground that th

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