Day in court

A judgment cannot bind strangers to a case. They must have their day in court. The case of Gerry and Cely illustrates this principle. Their case also explains the meaning of "successor-in-interest".

The case stemmed from a complaint filed by Gerry as president of their Homeowners Association (PVHA) against the owner-developer of their village (PSC) with the National Housing Authority (NHA) way back in April 1979. One of the violations complained of against PSC was its failure to provide an open space in its subdivision. After an ocular inspection the NHA found that the subdivision really had no open space there although there was a vacant lot (Block 40) with an area of 22,916 square meters that could be utilized as an open space.

Hence, in a Resolution date August 14, 1980, the NHA directed the PSC to provide Block 40 of the subdivision as the open space for the village. PSC did not appeal the said resolution rendering it final and executory. However, when Gerry filed a motion for execution of the NHA resolution, the records of the case mysteriously disappeared. Hence Gerry’s motion was "provisionally dismissed without prejudice".

In the meantime, PSC sold to another company (CTDC) several lots in the subdivision including Block 40. CTDC was unaware of the NHA resolution ordering PSC to have Block 40 utilized as open space of the village.

It was only almost ten years later or on July 17, 1990, when a new president of PVHA in the person of Cely who took over from Gerry, made a move to assert its right over Block 40 as an open space. Cely filed a complaint with the Housing Land Use and Regulatory Board (HLURB) for the revival of the NHA resolution of August 14, 1980. Cely included CTDC in her complaint as defendant for being the alleged successor-in-interest of PSC over Block 40.

On October 15, 1991, the HLURB rendered its decision in favor of Cely, reviving NHA resolution of August 14, 1980 and declaring Block 40 as the legally mandated open space for the subdivision project and directing the Register of Deeds to cause the annotation of this fact on the corresponding TCT which describes and covers the said Block 40. The HLURB also issued a cease and desist order against PSC and CTDC restraining them or all other persons acting in their behalf from asserting or perpetrating any acts of dominion or claim over said Block 40. This ruling was sustained by the HLURB Commissioners with the modification declaring that CTDC has the right to recover from PSC. Was the ruling correct?

No. The basic issue is whether the NHA resolution dated August 14, 1980 may be enforced against CTDC as successor-in-interest of PSC.

An action for revival of judgment is no more than a procedural means of securing an execution of a previous judgment that has become dormant after the passage of five years without it being executed upon motion of the prevailing party. It is not intended to re-open any issue affecting the merits of the parties’ case nor the propriety or correctness of the first judgment.

Here the original judgment sought to be revived was between Gerry and PSC, not between Cely and CTDC. CTDC purchased from PSC Block 40, not as an owner developer like PSC but as an ordinary buyer of lots. Even after the sale, CTDC did not become an owner-developer. The Deed of Sale between PSC and CTDC does not include the transfer of rights of PSC as owner-developer of the subdivision. Clearly there is no basis to conclude that CTDC is the successor-in-interest of PSC. When CTDC bought Block 40, there was no annotation on PSC’s title showing that the property is encumbered. In fact the NHA resolution was not annotated thereon. CTDC is thus a buyer in good faith and for value, and such, may not be deprived of the ownership of Block 40.

The duty of providing an open space for the subdivision remains to be the obligation of PSC, the owner-developer and the real partyin-interest in the action for revival of judgment. PSC was the lone defendant in that case against whom judgment was rendered. To hold CTDC as the successor-in-interest of the owner-developer of the subdivision is far from reality. CTDC is simply on the same footing as any lot buyer member of the village association (PVHA).

Strangers to a case, like CTDC, are not bound by the judgment rendered by the court. Said judgment will not divest the rights of a party who has not and has not and never been a party to the litigation. Execution of a judgment can be issued only against a party to the action and not against one who did not have his day in court (Panotes etc. vs. City Townhouse Development Corporation G. R. 154739, January 23, 2007)

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E-mail: [email protected] or jose@sison ph.com