We are convinced that the institution by respondents of their second complaint anchored on their claim that the bank breached its loan contracts with them by erroneously computing the actual and correct balance of their account when the petition for extrajudicial foreclosure of the real estate mortgage was filed by it designed to avert the dismissal of their complaint due to splitting causes of action and res judicata, following the dismissal of their first complaint and the dismissal of their appeal through their negligence. The SC is constrained to conclude that this was a last-ditch chance to resuscitate their lost cause, a brazen violation of the principle of res judicata.
SECTION 49. EFFECTS OF JUDGMENTS - The effect of a judgment or final order rendered by a court or judge of the Philippines, having jurisdiction to pronounce the judgment or order, may be as follows:
(b) In other cases the judgment or order is, with respect to the matter directly adjudged or as to any other matter that could have been raised in relation thereto, conclusive between the parties and their successors in interest by title subsequent to the commencement of the action or special proceeding, litigating for the case things and under the same title and in the same capacity.
(c) In any other litigation between the same parties or their successors in interest, that only is deemed to have been adjudged in a former judgment which appears upon its face to have been so adjudged, or which was actually and necessarily included therein or necessary thereto.
Section 49(b) enunciates the first concept of res judicata known as BAR BY PRIOR JUDGMENT or ESTOPPEL BY JUDGMENT, which refers to a theory or matter that has been definitely and finally settled on its merits by a court of competent jurisdiction without fraud or collusion.
There are 4 essential requisites which must concur for the application of this doctrine:
- finality of the former judgment;
- the court which rendered it had jurisdiction over the subject matter and the parties;
- it must be a judgment on the merits; and
- there must be, between the first and second actions
- identity of parties;
- identity of subject matter; and
- identity of causes of action.
A judgment or order is on the merits of the case when it determines the rights and liabilities of the parties based on the ultimate facts as disclosed by the pleadings or issues presented for trial. An order of the trial court on the ground that the complaint does not state a cause of action is a determination of the case on its merits. Such order, whether right or wrong bars another action based upon the same cause of action. The operation of the order as res judicata is not affected by a mere right of appeal where the appeal has not been taken or by an appeal which never has been perfected.
The ultimate test to ascertain identity of causes of action is whether or not the same evidence fully supports and establishes both the first and second cases. The application of the doctrine of res judicata cannot be excused by merely varying the form of the action or engaging a different method of presenting the issue.
Section 49(c) of Rule 39 enumerates the concept of CONCLUSIVENESS OF JUDGMENT. This is the second branch, otherwise known as COLLATERAL ESTOPPEL or ESTOPPEL BY VERDICT. This applies where, between the first case wherein judgment is rendered and the second case wherein such judgment is involved, there is no identity of causes of action.
If a particular point or question is in issue in the second action, and the judgment will depend on the determination of that particular point or question, a former judgment between the same parties will be final and conclusive in the second if that same point or question was in issue and adjudicated in the first suit; but the adjudication of an issue in the first case is not conclusive of an entirely different and distinct issue arising in the second.
More telling is the private respondents' failure to object to the extrajudicial foreclosure of the real estate mortgage and the sale at public auction; they even pleaded to be allowed to redeem the property after it had already been sold at public auction. Patently then, the respondents were proscribed from claiming that the foreclosure of the real estate mortgage was for an amount in excess of the balance of their account and that the sale at public auction was irregular/illegal.
If petitioner indeed felt that the assailed foreclosure proceedings were attended with any irregularity, he should have filed the appropriate action with the court. Instead, he offered to repurchase the subject properties without any condition or reservation. Nevertheless, he failed to comply with his undertaking and instead defaulted in his subsequent payments.
REDEMPTION IS INCONSISTENT WITH THE CLAIM OF INVALIDITY OF THE SALE. Redemption is an implied admission of the regularity of the sale and would estop the respondents from later impugning its validity on that ground. Thus, the private respondents' please for extensions of time to redeem the subject property are of the same genre.
The Order of the Court dismissing the first complaint is a judgment of the case on the merits.
The attempt of the respondents in their second complaint to avoid the application of the principle of res judicata by claiming the nature of their account on the ground therefor and their legal theory cannot prosper. Their second complaint cannot be maintained without trying the facts material to the first case, and the second case cannot be maintained if all disputed factual issues raised in the first complaint are considered in favor of the bank.
the principle of res judicata applies when the opportunity to raise in issue the first complaint exists but the plaintiff failed to do so. Indeed, if the pleading of a different legal theory would have convinced the trial court to decide a particular issue in the first action, which, with the use of diligence, the plaintiffs could have raised therein but failed to do, so they are barred by res judicata. nor do legal theories operate to constitute a cause of action. New legal theories do not amount to a new cause of action so as to defeat the application of the principle of res judicata.
It bears stressing that a party cannot divide the grounds for recovery. A plaintiff is mandated to place in issue in his pleading all the issues existing when the suit began. a lawsuit cannot be tried piecemeal. The plaintiff is bound to set forth in his first action every ground for relief which he claims to exist and upon which he relied, and cannot be permitted to rely upon them by piecemeal in successive action to recover for the same wrong or injury.
A party seeking to enforce a claim, legal or equitable must present to the court either by the pleadings or proofs, or both on the ground upon which to expect a judgment in his favor. He is not at liberty to split up his demands and prosecute it by piecemeal or present only a portion of the grounds upon which a special relief is sought and leave the rest to the presentment in a second suit if the first fails. There would be no end to litigation if such piecemeal presentation is allowed.
SPLITTING A SINGLE CAUSE OF ACTION consists in dividing a single or indivisible cause of action into several parts or claims and instituting 2 or more actions tehrein. A single cause of action or entire claim or demand cannot be split up or divided so as to be made the subject of 2 or more different actions.
A single act or omission may be violative of various rights at the same time, such as when the act constitutes a violation of separate and distinct legal obligations. The violation of each of these rights is a cause of action in itself. However, if only one right may be violated by several acts or omissions, there would only be one cause of action. Otherwise stated, if 2 separate and distinct primary rights are violated by one and the same wrong; or if the single primary right should be violated by 2 distinct and separate legal wrongs; or when the 2 primary rights are each broken by a separate and distinct wrongs; in either case, 2 causes of action would result. Causes of action which are distinct and independent, though arising out of the same contract, transaction, or state of fact may be sued separately, recovery on one being no bar to subsequent actions on the others.
The mere fact that the same relief is sought in the subsequent action will not render the judgment in the prior action as res judicata. Causes of action are not distinguishable for purposes of res judicata by difference in the claims for relief.
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