G.R. No. 247844 . July 26, 2023.
NORMA M. BALEARES AND HEIRS OF SANTOS BALEARES, PETITIONERS, VS. FELIPE B. ESPANTO, HEIRS OF ARNOLD V. MARANAN, REGISTER OF DEEDS MAKATI, AND CITY ASSESSOR OF MAKATI, RESPONDENTS.

FACTS

Petitioners Norma M. Baleares and the Heirs of Santos Baleares are occupants and possessors of a parcel of land covered by TCT No. RT-57 (9482) registered in the name of Santos Baleares, his siblings, and a nephew as co-owners. In 1988, the Baleares siblings mortgaged the property to Arnold V. Maranan. On June 17, 1998, petitioners filed a complaint (Civil Case No. 98-1360) for cancellation of the mortgage annotation, arguing Arnold’s mortgage right had prescribed. On July 18, 2003, the RTC ordered the cancellation of the mortgage annotation, declared Arnold’s extrajudicial foreclosure and auction sale void, and this decision became final and executory on February 1, 2008. Despite this, Arnold consolidated title and obtained TCT No. 225363 in his name on September 9, 2008, and subsequently sold the property to Felipe B. Espanto, who obtained TCT No. 225428 on September 25, 2008.
On May 10, 2012, petitioners filed an Amended Complaint (Civil Case No. 09-746, the First Case) for nullification of Arnold’s foreclosure sale and subsequent titles. The RTC dismissed this First Case on October 22, 2013, for failure of petitioners and counsel to appear at the pre-trial conference (First Dismissal Order). Petitioners did not appeal this dismissal.
On October 29, 2015, petitioners filed a new Complaint (Civil Case No. 15-1229, the Present Case) for Annulment of Title and Related Documents and Damages, seeking annulment of TCT Nos. 225363 and 225428 and reinstatement of TCT No. RT-57 (9482). Felipe filed a Motion to Dismiss on the ground of res judicata. On April 25, 2017, the RTC dismissed the Present Case (Second Dismissal Order), ruling it was barred by the prior judgment of dismissal in the First Case. The CA dismissed petitioners’ appeal, holding it raised pure questions of law which should have been brought directly to the Supreme Court via Rule 45.

ISSUE

1. Whether the CA erred in dismissing the appeal for lack of jurisdiction.
2. Whether the filing of the Present Case is barred by the prior dismissal of the First Case on the ground of res judicata.

RULING

1. On the CA’s dismissal of the appeal: The Supreme Court held the CA did not err. The appeal raised a pure question of law—specifically, the application of res judicata—which, under Section 2, Rule 50 of the Rules of Court, mandates the CA to dismiss outright an appeal erroneously taken to it. The proper remedy was a petition for review on certiorari under Rule 45 directly to the Supreme Court.
2. On res judicata: The Supreme Court ruled the Present Case is not barred by res judicata. For res judicata (bar by prior judgment) to apply, the judgment or order must be a final judgment on the merits. The First Dismissal Order in Civil Case No. 09-746 was a dismissal due to petitioners’ failure to appear at pre-trial under Section 5, Rule 18 of the Rules of Court. Such a dismissal is with prejudice (an adjudication on the merits) only if the order expressly states it is with prejudice. The First Dismissal Order was silent on whether the dismissal was with or without prejudice. Under the prevailing rules and jurisprudence, a dismissal for failure to appear at pre-trial that does not specify its nature is deemed to be without prejudice. Therefore, it does not constitute a final adjudication on the merits that would bar the refiling of the action. Consequently, the RTC erred in dismissing the Present Case on the ground of res judicata.
The Supreme Court, in the greater interest of substantial justice, granted the petition, reversed the CA’s Decision and Resolution, and remanded the Present Case to the RTC for further proceedings.