G.R. No. 31237, January 13, 1930
J.M. PO PAUCO and CO. vs. WISE and CO.

FACTS

Plaintiff-appellant J.M. Po Pauco & Co. filed an action for damages against defendant-appellee Wise & Co., alleging that Wise & Co. negligently failed to timely collect certain claims assigned to it by the plaintiff, causing about ₱15,000 in damages. Previously, in Civil Case No. 6416, Wise & Co. had sued J.M. Po Pauco individually for a debt. In that case, Po Pauco raised a defense and counterclaim, asserting that the debt had been satisfied by transferring certain credits to Wise & Co. and sought damages for Wise & Co.’s failure to apply those credits. The court disallowed the defense and counterclaim and rendered judgment in favor of Wise & Co. After that judgment became final, Po Pauco initiated the present suit in the name of his firm, J.M. Po Pauco & Co., to recover damages for the alleged negligent failure to collect the assigned credits.

ISSUE

Whether the plaintiff is entitled to recover damages from the defendant for the alleged negligent failure to collect the assigned credits.

RULING

No. The Supreme Court affirmed the trial court’s decision absolving Wise & Co. from liability. The Court found that the claim in this case is essentially the same as the defense and counterclaim already adjudicated in the prior litigation between the parties, even though the plaintiff here is the firm name, which appears to be a device to evade a plea of res judicata. More fundamentally, the evidence failed to establish any negligence on the part of Wise & Co. in collecting the credits. Furthermore, the testimony of Po Pauco himself indicated that the credits were transferred absolutely to Wise & Co. in full payment of the debt sued upon in the prior case. Therefore, the plaintiff has no cause of action. The judgment was affirmed with costs against the plaintiff.