GR 34885; (January, 1980) (Digest)
G.R. No. L-34885. January 28, 1980.
TELESFORA PAGSISIHAN, ISIDRO PAGSISIHAN, ELVIRA PAGSISIHAN, and TEOFISTO PAGSISIHAN, petitioners, vs. THE COURT OF APPEALS, SIMEON GARCIA and FELISA GARCIA, respondents.
FACTS
Ambrosio Pagsisihan executed a pacto de retro sale over a parcel of land in favor of spouses Simeon and Felisa Garcia in 1949. Failing to redeem it, Ambrosio filed a case (Civil Case No. 3599) in 1955, seeking to declare the deed an equitable mortgage and to redeem the property. However, in 1956, Ambrosio filed a petition to dismiss the case with prejudice, stating an amicable settlement had been reached. The court granted the dismissal order. In 1960, the Garcia spouses executed an affidavit consolidating their ownership.
In 1968, Ambrosio’s children, the petitioners herein, filed a new complaint (Civil Case No. 11353). They claimed the pacto de retro sale was void, as they were co-owners having inherited a share from their mother, and it was executed without their consent. They sought annulment or a declaration of an equitable mortgage and the right to redeem. The defendants moved to dismiss based on res judicata, citing the prior dismissal with prejudice. The trial court and the Court of Appeals dismissed the complaint, holding it was barred by the final order in the first case.
ISSUE
Whether the order of dismissal with prejudice in Civil Case No. 3599 bars the present action under the principle of res judicata.
RULING
No, the principle of res judicata does not apply. The Supreme Court reversed the Court of Appeals. For res judicata to apply, the judgment must be valid and rendered by a court of competent jurisdiction upon the merits. In this case, the validity of the 1956 dismissal order is itself the central issue in the subsequent action. The petitioners, as successors-in-interest, are challenging that very order, alleging the purported amicable settlement and their father’s consent to the dismissal were untrue. A judgment cannot operate as res judicata if it is assailed as a nullity. The rule requiring a party to seek relief from a void judgment within a reasonable time presupposes the order’s validity. Here, the petitioners’ complaint essentially attacks the dismissal order as void. Therefore, the prior order does not constitute a bar to the instant case. The records were remanded to the trial court for further proceedings, reserving the right to raise other grounds like prescription.