G.R. No. L-33924 March 18, 1988
MARIA BALAIS and PETRONILO ERAYA as successors in interest of JUAN BALAIS and JUANCHO BALAIS, petitioners, vs. BUENAVENTURA, ADELA, ROSITA, and TERESITA, all surnamed BALAIS, respondents.

FACTS

The case originated from an action for recovery of real property and damages filed by Juan, Maria, and the respondents (illegitimate children of Escolastico Balais) against petitioner Petronilo Eraya. The Court of First Instance (CFI) in its 1965 decision declared a sale of a portion of land by the widow Eutelia Masalig to Eraya as partly void and ordered reconveyance. Crucially, it also adjudicated the hereditary estate of Escolastico, applying the New Civil Code to grant successional rights to the illegitimate children. This 1965 decision became final and executory. Subsequently, petitioners Maria Balais and Petronilo Eraya filed a separate complaint for partition and annulment of the 1965 decision’s adjudication. The CFI dismissed this new complaint, upholding its prior ruling, including the application of the New Civil Code to determine the shares of the illegitimate children.

ISSUE

The core legal issues are: (1) Whether a court, in an action primarily for reconveyance, has jurisdiction to decree partition and adjudicate successional rights; and (2) Whether the New Civil Code can be applied to determine the successionary rights of heirs where the decedent (Escolastico Balais) died during the effectivity of the Old Civil Code.

RULING

The Supreme Court dismissed the appeal. On jurisdiction, the Court held that the CFI, as a court of general jurisdiction, possessed the authority to adjudicate all matters incidental to the main action for recovery of property. The determination of ownership and the respective shares of the claimants, which inherently involved partition and succession, was necessary for a complete resolution of the case. This fell squarely within the court’s jurisdiction over actions involving title to or interest in real property. On the substantive issue of applicable law, the Court found that the trial court erred in applying the New Civil Code. Since Escolastico Balais died before its effectivity, his succession is governed by the Old Civil Code, under which illegitimate children without any status of natural children had no successional rights. However, the Court emphasized that this error could no longer be assailed. The 1965 CFI decision that applied the New Civil Code had long become final and executory. A final judgment, even if erroneous, constitutes the law of the case between the parties and is not subject to disturbance. The principle of conclusiveness of judgment bars the re-litigation of matters already settled in a prior final judgment between the same parties. Thus, the adjudication of shares to the illegitimate children in the 1965 case stands.