DIGEST/LOMOSAD/DIAZ V. VALENCIANO/2017

DIAZ, JR & McMULLEN VS. VALENCIANO JR

G.R. No. 209376, December 06, 2017

FACTS:

On June 2, 1992, a complaint for unlawful detainer was filed by petitioners Jose Diaz, Jr. and his sister Adelina D. McMullen against Salvador Valenciano Sr., the father of respondent Salvador Valenciano Jr. Petitioners alleged that they are the lawful and registered owners of a parcel of land located at Rosario St., Old Albay, Legazpi City. On the other hand, Salvador Jr. countered that his father, and the rest of his family have been in open, peaceful and actual possession of the same property since 1958 when petitioner Diaz mortgaged it to Salvador Sr. 

On July 30, 1992, petitioners and Salvador Sr. entered into a Compromise Agreement where they agreed to amicably settle the civil case. The MTCC issued a Resolution approving the Agreement. However, Salvador Sr. and his family failed to vacate the subject property in accordance with the Compromise Agreement. Thus, Diaz filed an Ex-Parte Motion for Execution which was granted by the MTCC. A writ of execution was then issued, but by sheer tolerance, petitioners allegedly chose not to implement the writ of execution, and allowed Salvador Sr. and his family to stay on the property, subject to the condition that they will vacate the same when petitioners need it. Meanwhile, Salvador Sr. passed away.

On February 9, 2009, or after more than fifteen (15) years from the issuance of the writ of execution, petitioners sent a demand letter to Salvador Jr., who refused to vacate the property despite notice. Petitioners then filed against Salvador Jr. a Complaint for unlawful detainer. Petitioners claimed to be the lawful and registered owners of the property which was also the same property subject of the previous case for unlawful detainer.

In his Answer with Affirmative Defense and Counterclaim, Salvador Jr. contended that the complaint was barred by res judicata in view of the judicially-approved Compromise Agreement in the first unlawful detainer case between petitioners and his father, Salvador Sr. He also claimed that he and his predecessor-in-interest have been occupying the subject property in the concept of an owner for more than forty-five (45) years, and have declared the same in their names for taxation purposes, paying taxes therefor.

The MTCC rendered a judgment in favor of Salvador Jr., dismissing the complaint on the ground of res judicata. Aggrieved, petitioners filed an appeal before the RTC which rendered a Decision, finding the appeal meritorious reversing the decision of the MTCC.

Dissatisfied with the RTC Decision, Salvador Jr. filed a petition for review before the Court of Appeals. The CA granted the petition which reversed the decision of the RTC and reinstated the decision of the MTCC. Petitioners filed a motion for reconsideration which was denied for lack of merit. Hence, this Petition for Review on Certiorari.

ISSUE:

WON petitioners` subsequent unlawful detainer case against Salvador Jr. involving the same property is barred by res judicata and estoppel by laches. 

RULING:

NO. The subsequent unlawful detainer case is not barred by res judicata and estoppel by laches.

Res judicata applies in the concept of "bar by prior judgment" if the following requisites concur: (1) the former judgment or order must be final; (2) the judgment or order must be on the merits; (3) the decision must have been rendered by a court having jurisdiction over the subject matter and the parties; and (4) there must be, between the first and the second action, identity of parties, of subject matter, and of causes of action.

As can be gleaned from the records and allegations, the Compromise Agreement in the first unlawful detainer case involving the same property in Legazpi City subject of the second unlawful detainer case, is already final and executory, as it was duly approved by the MTCC of Legazpi City, which has jurisdiction over the ejectment case and the parties.

Once stamped with judicial imprimatur, a Compromise Agreement becomes more than a mere contract binding upon the parties. Having the sanction of the court and entered as its determination of the controversy, it has the force and effect of any other judgment. Thus, the Resolution approving the Compromise Agreement had the same effect of an ordinary court judgment, which immediately became final and executory as to those who are bound thereby. Verily, petitioners and Salvador Sr. envisioned an end to the litigation of the First Case except only as regards to the compliance with the respective obligations thereunder in the conclusion of the said Agreement. Indeed, the Resolution was a judgment on the merits, thus satisfying the third element of res judicata.

As to substantiality of the identity of the parties in both cases, family, relatives, and other privies of the defendant are as much bound by the judgment in an ejectment case as the party from whom they derive their possession, hence, petitioners cannot claim that there is no identity of parties in the first and second unlawful detainer cases.

Be that as it may, petitioners are correct that there is no identity of cause of action between the first and second unlawful detainer cases, thereby making the fourth requirement of res judicata absent.

Applying the "same evidence rule," the Court ruled that both cases have different causes of action. The Court finds that separate and distinct demand letters are required to prove the different breaches of implied promise to vacate the property, namely, the demand letter addressed to Salvador Sr., and the demand letter dated February 9, 2009 addressed to Salvador Jr. It bears stressing the refusal to comply with the first demand to vacate constitutes a cause of action for unlawful detainer in Civil Case No. 3931, while the refusal to comply with the second demand to vacate creates a different cause of action for unlawful detainer in Civil Case No. 5570. The first case deals with Salvador Sr.'s possession by mere tolerance of petitioners, while the second case refers to Salvador Jr.'s possession by mere tolerance, which arose when they neglected to execute the judgment in the first case.

The petitioners' inaction for a period of about 15 years after the issuance of the writ of execution does not also call for the application of the equitable doctrine of estoppel by laches under Article 1144 (3) of the New Civil Code. Suffice it to state that said provision pertains to the prescriptive period to enforce or revive a final judgment. Granted that respondents can no longer enforce the judgment in the first unlawful detainer case due to the lapse of the reglementary period to execute the same, they can still file a similar action involving the same property based on the different cause of action.

The Supreme Court also held that that as registered owners of the lots in question, the private respondents have a right to eject any person illegally occupying their property. This right is imprescriptible. Even if it be supposed that they were aware of the petitioners' occupation of the property, and regardless of the length of that possession, the lawful owners have a right to demand the return of their property at any time as long as the possession was unauthorized or merely tolerated, if at all. This right is never barred by laches.

The oft-repeated rule is that a person who occupies the land of another at the latter's tolerance or permission, without any contract between them, is bound by an implied promise that he will vacate the same upon demand, failing which a summary action for ejectment is the proper remedy against him. Since Salvador Jr.'s occupation is by mere tolerance of petitioners, he is bound by an implied promise that he will vacate the property upon demand. His status is analogous to that of a lessee or tenant whose term of lease has expired but whose occupancy continued by tolerance of the owner.

Wherefore, this Petition for Review on Certiorari is granted. The Decision of the Court of Appeals is REVERSED and SET ASIDE, while the Decision of the Regional Trial Court of Legazpi City, is REINSTATED.