FACTS:

The case involves a dispute over the ownership of a condominium unit and parking slots in Bayfront Tower Condominium. Keyser Mercantile, Inc. entered into a contract to sell with Bayfront Development Corporation for the purchase of Unit G and two parking slots. However, the contract was not registered and the unit remained in Bayfront's name. Spouses Carlos and Rosario Suntay also purchased condominium units in the same building but Bayfront failed to deliver the units. The Suntays filed a case against Bayfront and obtained a decision rescinding the contract and ordering Bayfront to pay them. The Suntays levied on Bayfront's titled properties, including Unit G and the parking slots. They subsequently became the highest bidder in the auction sale and a Certificate of Sale was issued in their favor. However, it was discovered that Keyser had also executed a Deed of Absolute Sale with Bayfront for the subject property. Keyser filed a complaint for annulment of the auction sale, which was initially ruled in their favor by the HLURB. The HLURB's decision was later set aside by the Supreme Court. Keyser then filed a new complaint before the RTC, which ruled in their favor, declaring the auction sale null and void. The CA affirmed the RTC's decision, stating that the Suntays did not acquire the subject property as it had already been sold to Keyser.

Spouses Suntay filed a motion for reconsideration, but it was denied by the Court of Appeals (CA). Spouses Suntay then filed a petition, asserting several issues. They argued that res judicata existed because the Housing and Land Use Regulatory Board (HLURB) case involving the same parties and subject matter had already been decided on appeal by the court. They also claimed that there was forum shopping in the refiling of the case with the Regional Trial Court (RTC) for the second time.

Spouses Suntay further argued that the action had already prescribed, as it had been more than four years since the injury occurred. They contended that HLURB Case No. REM-032196-9152 should not toll the prescriptive period due to its null and void judgment. They also claimed that their right as purchasers in a public action should be preferred over Keyser's right, as they had purchased the subject property in a legitimate auction sale prior to Keyser's registration of the deed of absolute sale.

Lastly, Spouses Suntay sought the award of moral and exemplary damages, as well as attorney's fees. They alleged mental anguish and besmirched reputation, and argued that exemplary damages should be awarded due to the baseless action filed against them. They also claimed reimbursement for the expenses incurred in hiring legal representation.

ISSUES:

1. Whether the doctrine of res judicata applies in this case.

2. Whether there is forum shopping.

3. Whether the defense of prescription is applicable.

4. Whether the levy on execution is superior to the subsequent registration of the deed of absolute sale.

5. Whether the auction sale had glaring irregularities.

6. Whether the Spouses Suntay are entitled to actual, moral, exemplary damages, and attorney's fees.

7. Whether the petitioner has a cause of action against the respondents.

8. Whether the complaint filed by the petitioner is sufficient in form and substance.

RULING:

1. The defense of res judicata is not applicable because the previous case was denied on jurisdictional grounds, and therefore was not adjudicated on the merits.

2. There is no forum shopping since there is no res judicata in this case.

3. The defense of prescription is not valid because the filing of the first action interrupted the prescriptive period, and the second action was filed within the remaining period.

4. The levy on execution is superior to the subsequent registration of the deed of absolute sale. The doctrine is well-settled that a levy on execution duly registered takes preference over a prior unregistered sale. Even if the prior sale was subsequently registered before the sale in execution but after the levy was duly made, the validity of the execution sale should be maintained because it retroacts to the date of the levy. In this case, the Notice of Levy in favor of Spouses Suntay was registered ahead of Keyser's registration of its Deed of Absolute Sale, therefore, Spouses Suntay have a better right than Keyser.

5. The Court disagrees that the auction sale had glaring irregularities. The court found that the auction sale was conducted in accordance with the law, and the documentary evidence presented shows that the notices and publication were complied with.

6. The Spouses Suntay are not entitled to actual, moral, exemplary damages, and attorney's fees. As to the claim for damages, Spouses Suntay failed to show compelling reasons to warrant the award of damages. In addition, the court held that not every winning party is entitled to an automatic grant of attorney's fees.

7. No, the petitioner does not have a cause of action against the respondents.

8. Yes, the complaint filed by the petitioner is sufficient in form and substance.

PRINCIPLES:

• Res judicata precludes parties from re-litigating issues actually litigated and determined by a prior and final judgment.

• Forum shopping occurs when the elements of litis pendentia are present, or when the final judgment in one case amounts to res judicata in another.

• The prescriptive period is interrupted when the first action is filed and lasts during the pendency of the action until the order of dismissal becomes final.

• Under the Torrens System, every person dealing with a registered land may safely rely on the correctness of the certificate of title issued therefor and is not obligated to look beyond the certificate to investigate the title of the seller appearing on the face of the certificate.

• The act of registration is the operative act to convey or affect the land insofar as third persons are concerned, and purchasers are not required to explore further than what the Torrens title upon its face indicates in quest for any hidden defect or inchoate right that may subsequently defeat their right to the property.

• Levy on execution, duly registered, takes preference over a prior unregistered sale.

• The preference created by the levy on attachment is not diminished even by the subsequent registration of the prior sale.

• The filing alone of a civil action is not a ground for an award of moral damages.

• Exemplary damages may be imposed by way of example or correction for the public good, but the claimant must first establish his right to moral or compensatory damages.

• Not every winning party is entitled to an automatic grant of attorney's fees.

• Cause of action refers to the legal ground or basis of a suit. In order to have a cause of action, the plaintiff must allege facts which would entitle him to the relief sought.

• A complaint is sufficient in form and substance if it contains a concise statement of the ultimate facts constituting the plaintiff's cause of action and the remedy or relief sought. It should state the essential elements of the cause of action and must contain factual allegations that support each element.

• The sufficiency of a complaint should be determined by its allegations alone, and not by the defenses which may be set up by the defendant in his answer or motion to dismiss.