G.R. No. 163338 September 21, 2005
LUZON DEVELOPMENT BANK, Petitioner, vs. BENEDICTO C. CONQUILLA, CORNELIA C. CONQUILLA, DOROTEA C. ORCINE and FELICIANO S. CONQUILLA, Respondents.

FACTS

Respondents, the Conquilla family, obtained a series of loans from petitioner Luzon Development Bank, secured by real estate mortgages over properties where Columbia College operated. After failing to pay, the bank initiated foreclosure. To prevent this, Feliciano Conquilla first filed a suit in the name of Columbia College (Civil Case No. N-6659), which was dismissed for failure to establish a cause of action, the court noting the admission of unpaid obligations. Days later, Feliciano and his wife filed a second suit in their personal capacity (Civil Case No. N-6669), which was also dismissed as a mere rehash of the first. The foreclosure proceeded, and the properties were sold to the bank.
Subsequently, the Conquillas filed a third complaint (Civil Case No. LP 99-0019), alleging that the bank failed to release the full loan amounts, thereby breaching the contract and rendering the foreclosure premature. The bank moved to dismiss on the ground of res judicata. The trial court granted the motion, ruling the third case was barred by prior judgments.

ISSUE

Whether the trial court correctly dismissed the third complaint on the ground of res judicata.

RULING

Yes, the Supreme Court reinstated the trial court’s order of dismissal. The Court held that the third case was barred by res judicata under the concept of “conclusiveness of judgment.” The elements are present: the former judgments were final; they were rendered by courts of competent jurisdiction; and there is identity of parties, subject matter, and causes of action between the first two cases and the third.
The Court emphasized that the causes of action in all three cases were identical—they all ultimately sought to prevent the foreclosure of the mortgage based on the same loan transactions. The shift in legal theory in the third complaint (i.e., non-release of full loan proceeds) was immaterial; a change in the form of action or allegation of new facts does not constitute a new cause of action if it arises from the same transaction or seeks the same relief. The prior dismissals, which were based on the admissions in the complaints regarding the existence of the loan and the failure to pay, constituted adjudications on the merits. Therefore, the Conquillas were barred from re-litigating the same essential claim. The trial court correctly used the admissions in the pleadings as a basis for dismissal, akin to a judgment on the pleadings, and this did not violate due process.