GR 44053; (July, 1937) (Digest)
G.R. No. 44053; July 26, 1937
MANUEL DY KIMCHONG, plaintiff-appellee, vs. LUNETA MOTOR CO. and THE PROVINCIAL SHERIFF OF CAVITE, defendants. LUNETA MOTOR CO., defendant-appellant.
FACTS
The Provincial Sheriff of Cavite levied and sold at public auction a house to satisfy a judgment in favor of Luneta Motor Co. against Jose Gil. Manuel Dy Kimchong was the highest bidder, paying P910. Before the sale, Maura and Perpetua Pañganiban filed a third-party claim, but Luneta Motor Co. posted an indemnity bond, and the sale proceeded. The Pañganiban sisters then filed an action (Civil Case No. 2547) against Luneta Motor Co., the Sheriff, and Dy Kimchong to annul the sale and declare their ownership. The Court of First Instance of Cavite declared the sale null and void and ordered Luneta Motor Co. to reimburse Dy Kimchong the P910. On appeal (G.R. No. 39186), the Supreme Court modified the judgment by vacating the order for Luneta Motor Co. to pay Dy Kimchong. Dy Kimchong then filed the present separate action to recover the P910 from Luneta Motor Co.
ISSUE
1. Whether the present action is barred by res judicata.
2. Whether Dy Kimchong is estopped from claiming a refund for failing to set up a counterclaim in the prior case (Civil Case No. 2547).
3. Whether Dy Kimchong is entitled to recover the purchase price from Luneta Motor Co.
RULING
1. No, the present action is not barred by res judicata. The prior case (Civil Case No. 2547) was an action for annulment of sale and declaration of ownership filed by the Pañganiban sisters against Luneta Motor Co., the Sheriff, and Dy Kimchong. The present case is a separate action for reimbursement filed by Dy Kimchong against Luneta Motor Co. The causes of action and relief sought are different.
2. No, Dy Kimchong is not estopped. Under Section 96 of the Code of Civil Procedure, a counterclaim must be in favor of all defendants and against all plaintiffs. In the prior case, the counterclaim for reimbursement would have been in favor of only one defendant (Dy Kimchong) against the plaintiffs (the Pañganiban sisters), not against all parties. Therefore, it was not an available compulsory counterclaim, and its omission does not bar the present action.
3. Yes, Dy Kimchong is entitled to recover the P910 from Luneta Motor Co. Applying the doctrine in Bonzon vs. Standard Oil Co., if a purchaser at an execution sale is evicted due to a total failure of title, he may recover the price paid, with interest, from the judgment creditor (Luneta Motor Co.). Here, the sale was declared null and void because the property belonged to the Pañganiban sisters, not the judgment debtor Jose Gil, resulting in a total failure of title for Dy Kimchong. The judgment is affirmed.
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