G.R. No. 153514; June 8, 2005
SPOUSES LAZARO M. ZULUETA and PERLA SUCAYAN-ZULUETA, Petitioners, vs. JOSE WONG, DOMINGO WONG, VICENTE WONG, NENITO BALLESTEROS, BEN OLIVER DIAZ and BOY DIAZ, Respondents.

FACTS

The registered owner, Ana Ballesteros, died in 1973, survived by her husband and children. In 1978, these heirs executed an “Extrajudicial Partition and Deed of Sale,” selling a 925-square-meter portion of Lot No. 87 to petitioner Lazaro Zulueta for ₱5,000. A new title was issued in Zulueta’s name. In 1995, the heirs (respondents) filed a complaint (Civil Case No. 22276) against the Zuluetas for declaration of nullity of sale, alleging the deed was fictitious and without consideration as no payment was made, and that they were intimidated by Zulueta’s position as mayor. The Regional Trial Court (RTC) dismissed this complaint for failure to state a cause of action, ruling that the admitted existence of a stated consideration in the deed meant non-payment did not render the sale void but merely gave rise to a different cause of action. The respondents’ appeal was denied for being filed out of time, rendering the dismissal final.
Subsequently, in December 1995, the respondents filed a second complaint (Civil Case No. 22733) against the same petitioners, containing substantially identical allegations and prayers for nullity and reconveyance, but with the deletion of the specific phrase alleging non-payment of the ₱5,000 consideration. The petitioners moved to dismiss, arguing the action was barred by res judicata due to the final dismissal of the first case.

ISSUE

Whether the final dismissal of the first complaint for failure to state a cause of action bars the filing of the second complaint under the principle of res judicata.

RULING

Yes, the second action is barred by res judicata. The Supreme Court reversed the Court of Appeals and reinstated the RTC’s order dismissing the second complaint. The doctrine of res judicata has two concepts: bar by prior judgment and conclusiveness of judgment. The latter applies here. The first case was dismissed on the merits—specifically for failure to state a cause of action—as the trial court ruled that the respondents’ own allegations showed a contract with a consideration, and thus non-payment did not equate to a void or simulated contract. This order became final and executory.
The second complaint, despite the minor deletion of the phrase on non-payment, essentially reasserted the same cause of action for nullity based on the same deed and the same core claim of a simulated sale. The Court held that a change in the characterization of the alleged flaw (from “no consideration” to a “fictitious” sale) did not alter the fundamental cause of action, which remained anchored on attacking the validity of the 1978 deed. The final judgment in the first case, which determined that the facts alleged did not constitute a cause of action for nullity, conclusively settled that issue between the parties. Therefore, the respondents were precluded from re-litigating the same cause under a slightly modified theory. The perfection or non-perfection of an appeal does not affect the conclusive effect of a final judgment.