G.R. No. 166577 February 3, 2010
SPOUSES MORRIS CARPO and SOCORRO CARPO, Petitioners, vs. AYALA LAND, INCORPORATED, Respondent.

FACTS

Petitioners Spouses Morris and Socorro Carpo filed a Complaint for Quieting of Title with the RTC of Makati City against Ayala Corporation, Ayala Property Ventures Corporation (APVC), and the Register of Deeds of Las Piñas. They claimed ownership of a 171,209-square meter parcel of land covered by TCT No. 296463 issued in their names in 1970. They alleged that Ayala Corporation was claiming titles (TCT Nos. 125945, T-4366, T-4367, and T-4368) over the same property and had contributed it to APVC for development. The Carpos sought the cancellation of Ayala’s titles, a declaration of their own title’s validity, and damages. They later filed an Amended Complaint impleading respondent Ayala Land, Inc. (ALI) in lieu of Ayala Corporation. ALI, in its Amended Answer, claimed it was the true owner, tracing its title back to OCT No. 242 issued in 1950, while the Carpos’ title was derived from OCT No. 8575 issued in 1970. ALI also argued the complaint was barred by res judicata due to the 1941 Supreme Court decision in Guico v. San Pedro. During the case, ALI secured TCT No. T-41262 over the property previously covered by TCT No. T-5333 (derived from TCT No. 125945). The case was transferred to the Las Piñas RTC. ALI filed a Motion for Summary Judgment, arguing there was no genuine issue of fact and the only issue was a legal one: which title had priority. The RTC denied the motion, but the CA granted ALI’s petition for certiorari and ordered the RTC to render a summary judgment. Both parties’ petitions to the Supreme Court were denied. The RTC then rendered a Summary Judgment in favor of the Carpos, finding their title superior because ALI’s claimed OCT No. 242 was based on a survey plan (SWO) not approved by the Director of Lands, rendering it void, and because the Carpos’ predecessor’s survey (1927) predated that of ALI’s predecessor (1930). ALI appealed to the CA, which reversed the RTC’s Summary Judgment. The CA found that the Carpos’ complaint itself attached and admitted the existence of ALI’s titles, and that the Carpos failed to sufficiently allege the invalidity of ALI’s titles. The CA also held that the Guico case, which involved the same parcels of land and upheld the title of Eduardo Guico (ALI’s predecessor) over the claim of Florentino Baltazar (the Carpos’ predecessor), constituted res judicata. The Carpos’ motion for reconsideration was denied.

ISSUE

Whether the Court of Appeals erred in reversing the trial court’s Summary Judgment and in dismissing the complaint based on res judicata.

RULING

The Supreme Court DENIED the petition and AFFIRMED the Decision and Resolution of the Court of Appeals. The Court held that the CA correctly reversed the RTC’s Summary Judgment. A summary judgment is only proper when there is no genuine issue as to any material fact. The Court found that the Carpos’ Amended Complaint did not sufficiently allege facts to support the invalidity of ALI’s titles; it merely stated the titles “appear to have been issued” and “are inherently invalid.” These were conclusions of law, not factual assertions. Furthermore, by attaching ALI’s titles to their complaint, the Carpos admitted their existence, and the burden was on them to prove their alleged invalidity. The Court also upheld the CA’s application of res judicata based on the 1941 case Guico v. San Pedro. The elements of res judicata were present: the earlier judgment was final; it was rendered by a court of competent jurisdiction; it was a judgment on the merits; and there was identity of parties, subject matter, and cause of action between the prior and present cases. The parties in Guico (Eduardo Guico and Florentino Baltazar) were predecessors-in-interest of the current parties (ALI and the Carpos, respectively). The subject matter was the same land (Lot 3, Psu-80886 vs. Lot 3, Psu-56007). The cause of action was the same: ownership of the disputed property. Therefore, the Carpos’ action was barred. The Court concluded that the CA committed no reversible error.