GR 110401; (August, 1995) (Digest)
G.R. No. 110401 , August 23, 1995
Edgardo Guevara and Lourdes Guevara, petitioners, vs. Hon. Herminio I. Benito, Presiding Judge of Branch 132 of the RTC of Makati, and Far East Bank & Trust Co., respondents.
FACTS
Petitioners Edgardo and Lourdes Guevara and respondent Far East Bank & Trust Co. entered into a compromise agreement, which included a Deed of Conditional Sale, to settle Civil Case No. 87-4140 concerning a foreclosed property. The RTC of Manila approved the agreement on March 30, 1992, rendering a judgment based on its terms, which required petitioners to pay the balance in monthly installments with a stipulation for forfeiture and rescission upon default.
After paying the first three installments, petitioners filed a new complaint (Civil Case No. 92-2818) in the RTC of Makati. They alleged that due to business disruptions from the Los Angeles riots, they requested and the bank agreed to waive the time clause for installments starting May 4, 1992, but the parties failed to set a new payment schedule. They prayed for the fixing of a new period and reconveyance. The bank denied any such agreement and moved to dismiss the new case on the ground of res judicata, citing the prior judgment.
ISSUE
Whether the judgment based on the compromise agreement in Civil Case No. 87-4140 constitutes res judicata, thereby barring the subsequent case (Civil Case No. 92-2818).
RULING
The Supreme Court ruled that res judicata does not apply. For a judgment to bar a subsequent case, there must be identity of parties, subject matter, and causes of action. While identity of parties exists, there is no identity of subject matter or cause of action between the two cases.
The subject matter of the first case was the resale of the property under the compromise agreement. In contrast, the subject matter of the second case is the rescheduling of payments based on a subsequent alleged waiver of the time clause. The causes of action are also different. The cause of action in the second case, alleging a post-judgment agreement to waive the time clause, arose after the rendition of the judgment in the first case. The evidence required to support each claim would not be the same. Res judicata extends only to facts and conditions existing at the time of the judgment and does not cover rights acquired or facts occurring thereafter, such as a subsequent agreement modifying the terms of payment. The trial court thus erred in dismissing the complaint, and the case was remanded for trial on the merits.