G.R. No. L-7328 August 21, 1956
HEIRS OF LAUREANO MARQUEZ, petitioners, vs. VICENTE VALENCIA, respondent.

FACTS

Vicente Valencia applied for the registration of two parcels of land, claiming ownership because the spouses Laureano Marquez and Eusebia Capiral failed to repurchase the land under a contract of sale with pacto de retro. The spouses objected, asserting their ownership and noting the subject was under litigation in Civil Case No. 5250. One parcel was excluded as already registered. By agreement, the registration hearing was postponed pending the outcome of Civil Case No. 5250. In that case, the spouses sued Valencia to declare the 1931 deed null and void. The trial court ruled it was an antichresis; the Court of Appeals ruled it was a sale with pacto de retro. On appeal, the Supreme Court held it was an equitable mortgage and ordered the spouses to pay Valencia the mortgage debt. Subsequently, Valencia amended his registration application, now claiming he inherited the land from his maternal grandfather, Pedro Crisostomo, and that he and his predecessors had possessed it from time immemorial. The trial court dismissed Valencia’s application on the ground of res judicata, citing the judgment in Civil Case No. 5250, and decreed registration in the name of the estate of Laureano Marquez. The Court of Appeals reversed the trial court, holding that the prior judgment did not bar the amended application, and remanded the case for new trial.

ISSUE

Whether the judgment in Civil Case No. 5250 constitutes res judicata, thereby barring Vicente Valencia’s amended application for land registration based on a new claim of ownership by inheritance.

RULING

Yes. The Supreme Court reversed the judgment of the Court of Appeals and affirmed the trial court’s dismissal of the application. The Court held that the judgment in Civil Case No. 5250 constituted res judicata. In that case, Valencia defended his claim to the land solely based on the deed of sale with pacto de retro and the vendors’ failure to repurchase, thereby expressly admitting he derived title from the plaintiffs (the spouses). He did not plead an alternative defense of ownership by inheritance. Having elected to rely on one defense only, the overruling of that defense was a complete determination of the controversy, barring a subsequent action based on an unpleaded defense. The determination of the issue joined by the parties is res judicata. Furthermore, findings that Valencia had leased the land from the spouses precluded him from questioning their title. The rule allowing a new application after dismissal does not apply where ownership was already litigated and adjudicated between the same parties.