G.R. No. 209535 - Lee vs. Lui Man Chong

Case Summary (G.R. No. 209535)

Petitioner’s Claims and Relief Sought

Lee alleged she was Romero’s common‑law spouse and business partner and that the subject properties were acquired during their cohabitation through their joint business efforts. She claimed co‑ownership (one‑half each) of the real properties and the PCC shares and sought annulment of Chong’s Affidavit of Self‑Adjudication, cancellation of titles in Chong’s name, and issuance of titles recognizing her one‑half interest.

Relevant Procedural Background — Prior Proceedings

After Romero’s death (Jan. 17, 2006), Chong executed an Affidavit of Self‑Adjudication (Feb. 23, 2006) and titles were transferred to him. Lee filed: (a) a Petition for Letters of Administration (Special Proceedings Case No. 1646‑R) which was dismissed and that dismissal was affirmed by the Court; (b) an Annulment of Affidavit of Self‑Adjudication (Civil Case No. 6328‑R before RTC Branch 61) seeking nullity of Chong’s affidavit and recognition of her co‑ownership; and (c) a subsequent Recovery of Ownership case (Civil Case No. 6761‑R before RTC Branch 60) seeking essentially the same relief as in the Annulment Case.

Dismissal of the Annulment Case and Its Finality

The RTC Branch 61 dismissed the Annulment Case (Apr. 29, 2008) for lack of cause of action and legal personality, reasoning that Lee, not being legally married to Romero, did not qualify as an heir under Articles 887 and 1003 of the Civil Code and had not established cohabitation. That dismissal was affirmed and attained finality on Jan. 12, 2009.

Proceedings in the Recovery Case and Trial Court Rulings

In the Recovery Case, Chong moved to dismiss for lack of jurisdiction, lack of cause of action, and later asserted res judicata based on the final dismissal of the Annulment Case. RTC Branch 60 initially denied Chong’s motion to dismiss (Feb. 28, 2011) but, on reconsideration, granted the motion and dismissed the Recovery Case on the ground of res judicata (Aug. 8, 2011), reasoning that adjudicating Lee’s co‑ownership claim would necessarily impugn the validity of Chong’s Affidavit of Self‑Adjudication and the transfer of titles, issues already settled in the Annulment Case.

Appellate Ruling of the Court of Appeals

The Court of Appeals affirmed the RTC’s dismissal (May 24, 2013) and denied reconsideration (Oct. 7, 2013). The CA held that the doctrine of res judicata, specifically bar by prior judgment, applied because: the Annulment Case was dismissed with finality by a competent court; both actions involved the same parties; both actions were founded on the same factual and legal claim (Lee’s alleged co‑ownership acquired during cohabitation); and Lee sought substantially the same relief in both cases. The CA further found that the RTC Branch 61 had in effect adjudicated the rights and obligations of the parties and that the dismissal, though via motion to dismiss, constituted an adjudication on the merits for purposes of res judicata.

Issue Presented to the Supreme Court

Whether the Court of Appeals erred in applying res judicata to bar Lee’s Recovery Case in light of the prior dismissal of the Annulment Case.

Governing Doctrine and Legal Tests Applied

Res judicata is defined as “a matter adjudged” and precludes relitigation of matters finally decided. Section 47, Rule 39 of the Rules of Court embodies two concepts: (1) bar by prior judgment, and (2) conclusiveness of judgment. The elements required for res judicata are: (1) finality of the prior judgment; (2) jurisdiction of the court that rendered the prior judgment over subject matter and parties; (3) that the prior disposition was a judgment on the merits; and (4) identity of parties, subject matter, and causes of action between the two actions. Tests for identity of causes of action include the “absence of inconsistency” test, which asks whether the relief sought in the later action would be inconsistent with the judgment in the prior action.

Supreme Court’s Application of the Doctrine to the Facts

The Court found all requisites of res judicata satisfied: the Annulment Ca

Case Syllabus (G.R. No. 209535)

Case Caption and Source

G.R. No. 209535; Decision dated June 15, 2015, reported at 759 Phil. 531, Second Division.
Petitioner: Teresita S. Lee; Respondent: Lui Man Chong.
Decision penned by Justice Mendoza; concurring: Carpio (Chairperson), Brion, Del Castillo, and Jardeleza, JJ. (Jardeleza designated Acting Member in lieu of Justice Marvic M.V.F. Leonen per Special Order No. 2056, dated June 10, 2015).
Case comes as a petition for review on certiorari under Rule 45 of the Rules of Court, assailing: (a) May 24, 2013 Decision and (b) October 7, 2013 Resolution of the Court of Appeals in CA-G.R. CV No. 98141, which affirmed the August 8, 2011 Order of the Regional Trial Court of Baguio City, Branch 60, in Civil Case No. 6761-R dismissing a case for recovery of properties.
Court of Appeals Decision authored by Associate Justice Amy C. Lazaro-Javier with Associate Justices Mariflor P. Punzalan Castillo and Zenaida T. Galapate-Laguilles, concurring. References to the rollo and specific page citations appear in footnotes.

Facts

Decedent: Conrado P. Romero died intestate on January 17, 2006.
Properties left by Romero: four (4) parcels of land in Baguio City (covered by Transfer Certificate of Title Nos. T-70887, T-73161, T-73523, T-73836) and 4,600 shares of Pines Commercial Corporation (PCC) — collectively referred to as the subject properties.
On February 23, 2006, respondent Lui Man Chong executed an "Affidavit of Self-Adjudication," adjudicating to himself the entire estate of Romero as the sole and exclusive heir, and caused transfer of titles over the said properties to his name.
On April 10, 2006, petitioner Teresita S. Lee, claiming to be Romero’s common-law wife, filed a Petition for Letters of Administration of the Estate of Conrado K. Romero before the RTC (raffled to Branch 5), docketed as Special Proceedings Case No. 1646-R.
The RTC Branch 5 dismissed SPC No. 1646-R on August 24, 2006; the dismissal was eventually affirmed by the Supreme Court and attained finality (dates and proceedings referenced in the record).
On August 24, 2006, Lee, with Linda Ng-Perido, filed a complaint for "Declaration of Nullity of Affidavit of Self-Adjudication" against Chong before the RTC (raffled to Branch 61), docketed as Civil Case No. 6328-R (the Annulment Case).
Lee claimed to own one-half of Romero’s estate by virtue of cohabitation as common-law spouses and sought nullification of Chong’s affidavit and declaration of her co-ownership.
On April 29, 2008, RTC Branch 61 dismissed the Annulment Case for lack of cause of action and for lack of legal personality to sue, explaining that Lee, not having a matrimonial bond with Romero, did not qualify as an heir under Articles 887 and 1003 of the Civil Code; the RTC also found she failed to establish that she cohabited with Romero. The dismissal was affirmed by the Supreme Court and attained finality on January 12, 2009.
On September 4, 2008, Lee filed another case, initially titled "Annulment of Title with Damages," subsequently amended to "Recovery of Ownership," against Chong before the RTC, raffled to Branch 60, docketed as Civil Case No. 6761-R (the Recovery Case).
In the Recovery Case, Lee alleged she was Romero’s common-law wife and business partner, that they ran various businesses together, and that the subject properties were acquired during their cohabitation using business funds; she claimed co-ownership pro indiviso of the subject properties (one-half share each) and prayed for cancellation of titles in Chong’s name and issuance of new titles recognizing her one-half share and 50% of Romero’s 4,600 PCC shares.
Chong moved to dismiss the Recovery Case on grounds of lack of jurisdiction and lack of cause of action; later he pleaded res judicata, invoking final and executory judgments in the previously filed Special Proceedings Case and the Annulment Case, asserting the causes of action in the Annulment and Recovery Cases were both anchored on Lee’s claim of being Romero’s common-law spouse and that the prior final dismissal had effectively settled the validity of the Affidavit of Self-Adjudication and the ownership consequences.

Trial Court Proceedings (RTC Branch 60)

On February 28, 2011, RTC Branch 60 issued an Order denying Chong’s motion to dismiss for lack of merit.
Chong filed a motion for reconsideration; on August 8, 2011, RTC Branch 60 issued an Order granting the motion to dismiss on the ground of res judicata.
The trial court’s reasoning: determination of whether Lee was entitled to recovery of her alleged portion of the subject properties would inevitably tackle the validity of the Affidavit of Self-Adjudication; a ruling recognizing co-ownership would undermine the validity of the affidavit and its consequences (including issuance of Transfer Certificate of Title in Chong’s name). Because the issue on the validity of the Affidavit of Self-Adjudication had been settled with finality in the prior Annulment Case, Lee’s prayer in the Recovery Case could not be lawfully granted.
Lee moved for reconsideration before the trial court; the motion was denied.

Court of Appeals Ruling

On appeal, the Court of Appeals, in its Decision dated May 24, 2013, affirmed the RTC Branch 60’s dismissal.
The CA’s reasoning centered on the doctrine of res judicata, specifically the concept of "bar by prior judgment."
The CA observed that the Annulment Case ha