G.R. No. 172585; June 26, 2008
CRISTITA BUSTON-ARENDAIN and HEIRS OF BAUTISTA ARENDAIN represented by CRISTITA BUSTON-ARENDAIN, petitioners, vs. ANTONIA GIL, MIGUEL ANTONIO GIL, MARLYN GIL and MANOLO GIL, respondents.

FACTS

Respondents, the Gils, filed a complaint for declaration of nullity of titles, quieting of title, and recovery of possession against petitioners, the Arendains. The Gils alleged they were co-owners of three parcels of land in Davao City covered by Original Certificates of Title (OCTs) issued in 1976. They accused the Arendains of fraudulently obtaining their own OCTs in 1981, which overlapped with the Gils’ properties, and of depriving them of possession through threats. The Arendains, in their answer, sought dismissal on grounds of lack of cause of action and failure to exhaust administrative remedies, citing a pending DENR-CENRO case. The Arendains subsequently failed to file a pre-trial brief and appear at the pre-trial conference, leading the Regional Trial Court (RTC) to declare them in default.
The Arendains challenged the order of default via certiorari at the Court of Appeals, which was dismissed. Their subsequent Petition for Review at the Supreme Court (G.R. No. 131877) was also dismissed for being filed out of time. The RTC then proceeded to hear the case ex parte based on the Gils’ evidence and rendered a decision nullifying the Arendains’ titles. The Arendains appealed this RTC decision to the Court of Appeals.

ISSUE

Whether the Court of Appeals erred in affirming the RTC’s decision which declared the petitioners’ titles null and void.

RULING

The Supreme Court denied the petition and affirmed the Court of Appeals’ decision. The legal logic is anchored on the finality of the order of default and the principle of conclusiveness of judgment. The Arendains’ failure to timely appeal the dismissal of their certiorari petition (G.R. No. 131877) challenging the order of default rendered that order final and executory. Consequently, they were barred from re-litigating the propriety of the default order in the present appeal of the main case. The Court emphasized that a final judgment on a specific issue constitutes an absolute bar to a subsequent action involving the same issue between the same parties.
On the substantive issue of title, the Court upheld the findings of the lower courts. The Gils’ titles (OCTs P-6075, P-6079, and P-6080) were issued in 1976, prior to the Arendains’ titles (OCTs P-10522 and P-10541) issued in 1981. Under the Torrens system, as between two certificates of title, the earlier in date prevails. The Arendains failed to present any evidence to rebut the Gils’ claim of prior registration and ownership due to their default status. The defense of failure to exhaust administrative remedies was correctly rejected, as the action involved a judicial question of ownership and title nullity, which is within the exclusive jurisdiction of regular courts, not administrative agencies.