G.R. No. L-23212 May 18, 1967
CAUSAPIENCIA CLEMENTE, ET AL., plaintiffs-appellants, vs. H. E. HEACOCK CO., ET AL., defendants-appellees.

FACTS

Juan J. Clemente was the owner of three parcels of land. To guarantee payment for goods, he constituted a real estate mortgage on these lands in favor of H. E. Heacock Company on July 29, 1948. Due to Clemente’s failure to comply with his obligations, the Court of First Instance of Rizal, in a foreclosure suit (Civil Case No. 947), ordered him to pay the debt. Upon his subsequent failure to pay, the properties were sold at public auction on May 23, 1955, to H. E. Heacock Company as the highest bidder. This judicial sale was confirmed by court order on September 17, 1956. After the public sale but before its confirmation, Heacock sold the same properties to Amparo Belen de Guzman. Clemente filed a case (Civil Case No. 4365) to annul this subsequent sale, but it was dismissed on grounds of res judicata, a dismissal upheld by the Supreme Court. Clemente also appealed the orders confirming the foreclosure sale, which appeal was ultimately denied by the Supreme Court on October 25, 1960. On July 7, 1961, the heirs of Juan J. Clemente (Causapiencia Clemente, et al.) filed the present complaint (Civil Case No. Q-5894) seeking to declare the foreclosure sale and the subsequent sale to De Guzman null and void, and for reconveyance of the properties. The grounds alleged were that Heacock had no corporate authority to acquire lands at the time of the sale, that the consolidation of title was irregular, and that the purchase price was unconscionably low. The trial court dismissed the complaint on the ground of res judicata, prompting this appeal.

ISSUE

Whether the dismissal of the complaint on the ground of res judicata was correct.

RULING

Yes, the order of dismissal is affirmed. The Supreme Court held that the doctrine of res judicata bars the present action. The subject matter (the three parcels of land) and the cause of action (the validity of the foreclosure sale to H. E. Heacock Company) in the present case are identical to those already finally adjudicated in the previous foreclosure proceedings (Civil Case No. 947) and the related case (Civil Case No. 4365). The validity of the sale to Heacock, which necessarily involved the company’s capacity to acquire the land, was conclusively determined by the trial court’s order confirming the sale and the subsequent affirmations by the superior courts. The appellants’ predecessor’s failure to contest the corporate capacity of the purchaser in the original foreclosure proceeding constituted a waiver of that defense. A change in the form of action or the remedy sought does not bar the application of res judicata. Since the sale to Heacock was validly confirmed, the appellants lost all standing to question it or the subsequent transfer to the De Guzman spouses.