G.R. No.

L-45252, January 31, 1985

D E C I S I O N

RELOVA, J.:

Action to quiet title filed by appellants Timoteo Laroza and Conchita Uri
in the then Court of First Instance of Laguna and San Pablo City versus
appellee Donaldo Guia over a parcel of land described as follows:

"Isang (1) lagay na lupang tirikan at niyugan na natatayo sa Nayon ng San Francisco,
Lunsod ng San Pablo; may luwang na 200 metrong parisukat humigit kumulang ang
tirikan at 2210 na metrong parisukat, humigit kumulang ang niyugan. May tanim na 46
puno ng niyog at 29 puno ng lanzones na pawang nabunga. Ang kabalantay sa SE-
Remedios Bautista; sa SW-Provincial Road; sa SW at SE-Maria Umali at sa NW-
Buenaventura Guia. Ito ay hinahalagahan ng Pamahalaan ng P730.00 para sa taong
kasalukuyan at ito ay mayroong Katibayan sa pagmamay-ari Blg. 31068. Ang mga
hangganan nito ay may palatandaang buhay na madre-cacao." (pp. 4-5, Record on
Appeal)
Appellants, in their complaint, alleged that they bought the above-described property in
good faith and for valuable considerations from Francisco Guia on June 30, 1973, after
they had seen the documents of ownership of said Francisco Guia which consisted of the
following:
that they were in continuous possession of the said property from the time they acquired
the same from Francisco Guia until appellee, "through the commissioners appointed by
this Honorable Court in Civil Case No. SP-488, namely: Aproniano Mls. Magsino, Clerk
of Court; Rogaciano Borja, Deputy Clerk of Court; Atty. Ricardo Fabros, then
represented by Mr. Armadilla; and, Engr. Danilo Dichoso, the surveyor, intruded upon the
said peaceful possession by attempting to survey the above-described property and to
partition the same by virtue of a decision of this Honorable Court dated December 29,
1966 in Civil Case No. SP-488; that the attempt of herein defendant to survey and
partition the above described property beclouds the title of herein plaintiffs for which
reason, they were constrained to institute the present action with the assistance of counsel
at the agreed amount of P5,000.00 and were compelled to incur litigation expenses of not
less than P500.00." (p. 7, Record on Appeal)

Appellee, through counsel, filed a motion to dismiss the complaint alleging, among
others, "that the land subject matter of the complaint has already been the subject of a
final and executory judgment in Civil Case No. SP-488, hence, plaintiffs (appellants)
have no cause of action, or if there be any, the same is barred by a prior judgment." (p.
39, Record on Appeal)

Appellants opposed the motion to dismiss maintaining that the complaint states a
sufficient cause of action and prayed that the motion to dismiss be denied.

The lower court, on October 30, 1974, issued an order dismissing appellants' complaint
saying that:
"The motion to dismiss is well taken. It is beyond debate or question that the land over
which plaintiffs seek herein to quiet title has already been declared the property of
defendant by the final and executory judgment of this Court in SP-488, which was
affirmed by the Court of Appeals and a further attempt to challenge the adjudication by
certiorari was thrown out prefunctorily by the Supreme Court. There is no room for doubt
or for controversy that all the requisite elements of res judicata or bar by prior judgment
are present here. Plaintiffs are the supposed purchasers of the property from Francisco
Guia, defendant in SP-488. Needless to say, a judgment against a party binds his
successors in interest. A sale or similar transmission of right does not disturb the identity
of party for purposes of res judicata. In this regard, for further enlightenment on the
issues generated by this dismissal motion, the Court hereby refers to its order of March
22, 1971 in SP-488.

"Contrary to plaintiffs contention, the ground of res judicata raised by defendant is

The appellate court forwarded the records of the case to Us because "no factual issue is
involved" and "the issues raised in the instant case are purely legal questions which are
beyond the jurisdiction of the Court to determine." (p. 5, CA Resolution)

There is no merit in this appeal.

Records show that long before appellants had acquired subject property, a notice of lis
pendens (Civil Case No. SP-488) had already been registered with the Office of the
Register of Deeds of San Pablo City affecting the property. Lis pendens is a notice of
pending litigation; a warning to the whole world that one who buys the property so
annotated does so at his own risk (Rehabilitation Finance Corporation vs. Morales, 101
Phil. 175). Notwithstanding, appellants bought the land from Francisco Guia, defendant
in Civil Case No. SP-488. Having purchased the property with notice of lis pendens,
appellants took the risk of losing it in case the decision in the said civil case, as what
actually happened, is adverse to their predecessor-in-interest, Francisco Guia. Time and
again, We have decreed that the filing of a notice of lis pendens charges all strangers with
a notice of the particular litigation referred to therein and, therefore, any right they may
thereafter acquired on the property is subject to the eventuality of the suit. The doctrine of
lis pendens is founded upon reason of public policy and necessity, the purpose of which is
to keep the subject matter of the litigation within the power of the Court until the
judgment or decree shall have been entered; otherwise, by successive alienations pending
the liti gation, its judgment or decree shall be rendered abortive and impossible of
execution. On this score alone, appellants case would necessarily fall.

In their first assigned error appellants argue that there is no res judicata because there is
no identity of causes of action since the case at bar is an action to quiet title, whereas,
Civil Case No. SP-488 is one of filiation and partition. In National Bank vs. Barreto, 52
Phil. 818, We held that "a judgment for the plaintiff sweeps away every defense that
should have been raised against the action, and this for the purpose of every subsequent
suit, whether founded upon the same or a different cause." In Civil Case No. SP-488,
appellee Donaldo Guia maintained that he is a co-owner of that parcel of land, including
the land in question, which was later adjudicated to him as his share in the inheritance
from the late Cayetana Garcia; whereas, Francisco Guia, appellants' predecessor-in-
interest, alleged that he is the sole owner of the property. Thus, both parties claim
ownership over the same property - appellee Donaldo Guia, by virtue of a final judgment
rendered in Civil Case No. SP-488, and appellants Timoteo Laroza and Conchita Uri, by
virtue of the sale executed by Francisco Guia, who lost in said civil case. In both cases,
the question boils down to ownership of the land. Thus, there is identity of causes of
action.

Anent the second assigned error, records reveal that a hearing on appellee's motion to
dismiss appel lants' complaint was conducted on August 12, 1974. There is, therefore,
no basis for appellants to say that a hearing was never held in the case.

Finally, appellants claim that the lower court erred in declaring that res judicata is
indubitable and patent from the face of the complaint itself, without the appellee pleading
the same as an affirmative defense. From a cursory reading of the pleadings, extant in the
records of the case, We find that in his motion to dismiss, appellee had thoroughly
discussed the issue of res judicata and, coupled by the fact that it was the same court
which heard and decided Civil Case No. SP-488, the trial court can rightfully rule on said
issue.

ACCORDINGLY, for lack of merit, the appeal is hereby DISMISSED.

FIRST DIVISION
G.R. No. L-37871, November 23, 1981
 RESTITUTA V. VDA. DE GORDON,[1]

PETITIONER, VS. THE COURT OF APPEALS[2]

AND ROSARIO DUAZO, RESPONDENTS.

D E C I S I O N

TEEHANKEE, Acting C.J.:

The Court affirms the appealed decision finding the same to be in accordance with the
applicable law. The appellate court correctly upheld the tax sale of the real properties at
which respondent Rosario Duazo acquired the same and her ownership upon petitioner
Restituta V. Vda. de Gordon's failure to redeem the same, having found the sale to have
been conducted "under the direction and supervision of the City Treasurer of Quezon City
after the proper procedure and legal formalities had been duly accomplished."

The appellate court's decision under review held as follows:

"The opposition [to respondent Duazo's petition for consolidation of ownership] has not
controverted by specific denials the material averments in the petition. Hence the
material averments in the petition are deemed admitted. (Section 1, Rule 9, Revised
Rules of Court)
"Moreover, the opposition has not raised the issue of irregularity in the public sale of the
two parcels of land in question. This defense is deemed waived. (Section 2, Rule 9, id.)
"The uncontested averments in the petition and the annex attached to said petition
disclose that the two parcels of land in question were sold at public auction at the City
Hall, Quezon City on December 3, 1964 under the direction and supervision of the City
Treasurer of Quezon City after the proper procedures and legal formalities had been duly
accomplished; that the taxes against the two parcels of land in question for the years 1953
to 1963, inclusive, remained unpaid; that the City Treasurer of Quezon City, upon warrant
of a certified copy of the record of such delinquency, advertised for sale the two parcels
of land in question to satisfy the taxes, penalties and costs for a period of thirty (30) days
prior to the sale on December 3, 1964, by keeping a notice of sale posted at the main
entrance on the City Hall and in a public and conspicuous place in the district where the
same is located and by publication of said notice once a week for three (3) weeks in the
"DAILY MIRROR", a newspaper of general circulation in Quezon City, the
advertisement stating the amount of taxes and penalties due, time and place of sale, name
of the taxpayer against whom the taxes are levied, approximate area, lot and block
number, location by district, street and street number of the property; that at the public
sale on December 3, 1964, the two parcels of land in question were sold to [Duazo] for
the amount of P10,500.00 representing the tax, penalty and costs; that the certificate of
sale executed by the City Treasurer was duly registered on December 28, 1964 in the
office of the Register of Deeds of Quezon City; that upon the failure of the registered
owner to redeem the two parcels of land in question within the one year period prescribed
by law, the City Treasurer of Quezon City executed on January 4, 1966 a final deed of
sale of said lands and the improvements thereon; and that said final deed of sale was also
registered in the Office of the Register of Deeds of Quezon City on January 18, 1966.
"The principal issues to be resolved in this appeal are (1) whether the price is so grossly
inadequate as to justify the setting aside of the public sale and (2) whether the oppositor
[Gordon] is entitled to redeem the two parcels of land in question.
"The combined assessed value of the two parcels of land is P16,800.00. The price paid at
the public sale is P10,500.00. The residential house on the land is assessed at
P45,580.00. But the assessment was made in 1961. The present value of the residential
house must be much less now considering the depreciation for over ten years.
"While the price of P10,500.00 is less than the total assessed value of the land and the
improvement thereon, said price cannot be considered so grossly inadequate as to be
shocking to the conscience of the court.
"In Director of Lands vs. Abarca, 61 Phil. 70, cited by the lower court in the order
appealed from, the Supreme Court considered the price of P877.25 as so inadequate to
shock the conscience of the court because the assessed value of the property in question
was P60,000.00. The assessed value of the land was more than sixty times the price paid
at the auction sale.
"In the case at bar, the price of P10,500.00 is about one sixth of the total assessed value of
the two parcels of land in question and the residential house thereon. The finding of the
lower court that the house and land in question have a fair market value of not less than
P200,000.00 has no factual basis. It cannot be said, therefore, that the price of
P10,500.00 is so inadequate as to be shocking to the conscience of the court.
"Mere inadequacy of the price alone is not sufficient ground to annul the public sale.
(Barrozo vs. Macaraeg, 83 Phil. 378)
"Moreover, in Velasquez vs. Coronel, 5 SCRA 985, 988, the Supreme Court has held:

'It is true that respondent treasurer now claims that the prices for which the lands were
sold are unconscionable considering the wide divergence between their assessed values
and the amounts for which they had been actually sold. However, while in ordinary sales
for reasons of equity a transaction may be invalidated on the ground of inadequacy of
price, or when such inadequacy shocks one's conscience as to justify the courts to
interfere, such does not follow when the law gives to the owner the right to redeem, as
when a sale is made at public auction, upon the theory that the lesser the price the easier it
is for the owner to effect the redemption. And so it was aptly said: 'When there is the
right to redeem, inadequacy of price should not be material, because the judgment debtor
may reacquire the property or also sell his right to redeem and thus recover the loss he
claims to have suffered by reason of the price obtained at the auction sale.' (Italics
copied).
"The contention that the oppositor can still redeem the two parcels of land in question
because the public sale has not been judicially confirmed deserves scant consideration.
The cases cited by the oppositor and by the lower court all refer to foreclosure of mort-
gage sales which are by express provision of law subject to judicial confirmation. The
public sale in the instant case is governed by Section 40 of Commonwealth Act No. 470
which gives the delinquent taxpayer a period of one year from the date of the sale within
which to repurchase the property sold. In case the delinquent taxpayer does not
repurchase the property sold within the period of one year from the date of the sale, it
becomes a mandatory duty of the provincial treasurer to issue in favor of the purchaser a
final deed of sale. (Velasquez vs. Coronel, supra) We find that the oppositor is not
entitled to repurchase the two parcels of land in question because she failed to do so
within one year from the date of the sale thereof.
"WHEREFORE, the order appealed from is hereby reversed and the ownership of
[Duazo] over the two parcels of land in question and the improvements thereon is
declared consolidated. The Register of Deeds of Quezon City is hereby ordered to cancel
Transfer Certificates of Title Nos. 12204 and 12205 and to issue the corresponding trans-
fer certificates of title to [Duazo] over the two parcels of land in question, upon the
payment of the prescribed fees. No pronouncement as to costs."[3]

The Court finds petitioner's assignment of errors to be without merit.

Petitioner's first assignment of error as to alleged lack of personal notice of the tax sale is
negated by her own averments in her own opposition filed in the court a quo that "(T)he
Oppositor in the above entitled petition is a woman 80 years of age. She was not aware
of the auction sale conducted by the City Treasurer of Quezon City on December 3, 1964
or if there was any notice sent to her, the same did not reach her or it must have escaped
her mind considering her age. x x x."[4]

Petitioner's second assignment of error that the period for redemption should be the two-
year period provided in Republic Act No. 1275 likewise has no merit, since the specific
law governing tax sales of properties in Quezon City is the Quezon City Charter,
Commonwealth Act No. 502 which provides in section 31 thereof for a one-year redemp-
tion period. The special law covering Quezon City necessarily prevails over the general
law. Furthermore, as respondent has pointed out, as of the time of filing in 1974 of
respondent's brief, petitioner had not then for a period of 10 years (and 17 years as of
now) sought to exercise her alleged right of redemption or make an actual tender thereof,
as follows:

"Moreover, even if we do concede, merely for the sake of argument, that the provisions of
Rep. Act No. 1275 may be made applicable in this case which is certainly not and
Petitioner should have been granted TWO (2) YEARS from date of the public sale, within
which to exercise her right of redemption, yet since the sale of the questioned land to
herein Respondent in that public auction in 1964, herein Petitioner never had shown any
good faith in exercising her right of redemption. Since 1964 when the auction sale took
place, up to the present, 1974, or a period of TEN (10) YEARS have already elapsed and
yet herein Petitioner never made any tender of payments with either the Court of First
Instance of Quezon City or the Court of Appeals, or the Supreme Court, at least to show
her good faith.
"Furthermore, if herein Petitioner really believes in good faith, that [she] had still that
right of redemption, then she should have paid the real estate taxes, but as the records will
show, since 1964, Private Respondent Rosario Duazo is the one paying the real estate
taxes of the lands in question."[5]

Petitioner's third and last assignment of error as to the alleged gross inadequacy of the
purchase price must likewise fail. As the Court has held in Velasquez vs. Coronel,[6]
alleged gross inadequacy of price is not material "when the law gives the owner the right
to redeem as when a sale is made at public auction, upon the theory that the lesser the
price the easier it is for the owner to effect the redemption." As the Court further stressed
in the recent case of Tajonera vs. Court of Appeals,[7] the law governing tax sales for
delinquent taxes may be "harsh and drastic, but it is a necessary means of insuring the
prompt collection of taxes so essential to the life of the Government."