G.R. No. L-41940 November 21, 1984
Iluminada Carandang, Eden Carandang, Swanie Carandang and Marilo Carandang, petitioners, vs. Pomposa G. Venturanza and Gregorio Venturanza, respondents.

FACTS

The petitioners are heirs of Protacio Carandang, who owned a registered parcel of land. Due to claims from relatives, the unlettered spouses Carandang sought the legal help of respondent Gregorio Venturanza, a lawyer and municipal judge. Upon his advice, they executed a Deed of Absolute Sale in favor of respondent Pomposa Venturanza, with the understanding that title would be reconveyed after settling the relatives’ claims. Title was transferred to Pomposa. The relatives then filed Civil Case No. R-2149 to annul the deed. The court upheld the sale’s validity, declaring the Venturanzas as lawful owners, a decision affirmed on appeal.
After the finality of that case, the Carandang heirs, pursuant to the alleged trust agreement, repeatedly demanded the return of the title, as they remained in possession. The Venturanzas refused, asserting ownership under the final judgment. The heirs discovered the title had been subdivided and new certificates issued in Pomposa’s name. They then filed Civil Case No. R-2480 for reconveyance based on an implied trust.

ISSUE

Whether the doctrine of res judicata bars the filing of Civil Case No. R-2480 for reconveyance based on an implied trust.

RULING

No, res judicata does not bar the subsequent action. For res judicata to apply, there must be, among other requisites, identity of parties and identity of cause of action between the prior and subsequent cases. Here, there is no identity of parties in the requisite adversarial sense. In the first case (R-2149), Protacio Carandang and the Venturanzas were co-defendants against the claiming relatives. A judgment in favor of multiple defendants does not settle their relative rights inter se unless their conflicting claims were actually litigated through cross-claims or adverse pleadings, which they were not. Thus, they were not adverse parties in the first suit.
Crucially, there is no identity of cause of action. The first case (R-2149) aimed to annul the deed of sale and recover hereditary shares, with the court merely ruling on the deed’s validity against third-party claimants. The second case (R-2480) seeks reconveyance based on an implied trust under Article 1453 of the Civil Code, arising from the alleged agreement that the Venturanzas would hold the property for the Carandangs. This cause of action, founded on a trust agreement, was not adjudicated in the prior case. The principle applicable is the “conclusiveness of judgment,” which holds a prior judgment conclusive only as to matters actually and directly litigated and determined. The trust claim was not. Therefore, the dismissal on grounds of res judicata was erroneous. The case must be remanded for trial on the merits of the implied trust.