GR 237369; (October, 2022) (Digest)
G.R. No. 237369 . October 19, 2022
LANDBANK OF THE PHILIPPINES, PETITIONER, VS. ALBRANDO R. ABELLANA, RESPONDENT.
FACTS
Respondent Albrando Abellana executed a Real Estate Mortgage over his property in favor of petitioner Landbank to secure a loan for Ernesto Villaos. Upon default, Landbank extrajudicially foreclosed the mortgage, acquired the property at auction, and consolidated title after the redemption period. In 2010, Abellana filed a complaint (Civil Case No. 4586) to repurchase the property, claiming he was a mere accommodation mortgagor. The Regional Trial Court (RTC) and the Court of Appeals (CA) denied his claim, a decision which became final and executory upon the Supreme Court’s denial of his petition in 2013.
Subsequently, Landbank sold the property to a third party. In 2014, Abellana filed a new complaint (Civil Case No. 5144) seeking the declaration of nullity of the extrajudicial foreclosure proceedings, alleging lack of notice. Landbank moved to dismiss on grounds of res judicata, laches, and prescription. The RTC denied the motion to dismiss but applied the doctrine of conclusiveness of judgment, estopping Abellana from relitigating issues connected to the prior repurchase case. The CA affirmed this order.
ISSUE
Whether the present action for declaration of nullity of the foreclosure is barred by res judicata in the form of conclusiveness of judgment.
RULING
Yes, the action is barred. The Supreme Court granted Landbank’s petition and ordered the dismissal of Civil Case No. 5144. The Court clarified that for conclusiveness of judgment to apply, identity of parties and issues is required, but not identity of subject matter or causes of action. The prior repurchase case (Civil Case No. 4586) and the instant nullity case involve the same parties—Abellana and Landbank. While the causes of action differ (repurchase versus nullity), the foundational issues are identical and were necessarily determined in the first case.
In the repurchase case, Abellana implicitly acknowledged the validity of the foreclosure by seeking to repurchase the property. The courts’ final rulings, which rejected his claim, constituted a definitive determination that Landbank had validly acquired ownership through the foreclosure process. By seeking to nullify that very process in the second case, Abellana is attempting to relitigate the issue of Landbank’s rightful ownership, which was already settled. The Court emphasized that a final judgment on any essential fact or issue binds the parties in all future suits, regardless of the form of the action. Therefore, Abellana is barred by conclusiveness of judgment from contesting the validity of the foreclosure proceedings, as it is a matter directly connected to and resolved by the final judgment in the prior case.