GR L 2400; (May, 1950) (Digest)
G.R. No. L-2400. May 18, 1950.
MARIA MACAPINLAC and EUFROSINA MACAPINLAC LORENZO, petitioners, vs. THE COURT OF APPEALS (FIRST DIVISION) and AVELINA BALLESTEROS, respondents.
FACTS
Petitioners mortgaged a piece of land to respondent Avelina Ballesteros to secure a P500 debt, executing a deed titled “Mortgage with Option to Buy.” The deed contained a stipulation that in case of default within two years, the mortgagors would sell the property for an amount not exceeding P1,000, with the mortgagee given preference to buy. Petitioners failed to pay the debt and additional sums taken. Respondent initially filed an action for specific performance to compel petitioners to deed over the property, but the trial court ruled in favor of petitioners, declaring the mortgage discharged after petitioners consigned payment. Respondent appealed, but the records of the case were destroyed during the war. Reconstitution of the record failed, and the trial court authorized the filing of a new action. Respondent filed a new action for specific performance. Petitioners moved to dismiss on the ground of res judicata, which was denied. The trial court in the new case ruled in favor of respondent, ordering petitioners to execute a deed of sale. The Court of Appeals affirmed this decision.
ISSUE
1. Whether the new action for specific performance is barred by res judicata due to the judgment in the prior case.
2. Whether the deed of mortgage granted the respondent an option to purchase the mortgaged property.
RULING
1. No, the new action is not barred by res judicata. The judgment in the prior case had not attained finality because an appeal was pending when the records were destroyed. The reconstitution of the record failed, and the trial court’s order authorized the filing of a new action, which is sanctioned by law (Section 30 of Act No. 3110 ). Therefore, the prior judgment was not final and conclusive.
2. Yes, the deed granted the respondent an option to purchase. The Court of Appeals’ conclusion that the deed, interpreted together with the subsequent acts of the parties (such as receipts for additional sums), gave the mortgagee the option to buy, is a factual finding that is binding and not subject to review by the Supreme Court in this appeal. The decision of the Court of Appeals is affirmed.
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