G.R. No. 76671, May 17, 1989
SUSANA SALIDO, petitioner, vs. COURT OF APPEALS and CORAZON REYES, respondents.

FACTS

On July 16, 1981, spouses Jose and Adelaida Perez executed a promissory note in favor of petitioner Susana Salido, secured by a chattel mortgage over leasehold rights and goodwill of certain market stalls. The mortgage, executed only by Adelaida Perez and lacking Jose’s conforme, was not initially registered. On August 12, 1981, the Perez spouses filed a petition for voluntary insolvency and were declared insolvent. Petitioner registered the chattel mortgage on September 2, 1981, and later sought to foreclose it or to claim P86,000.00 realized by the assignee, private respondent Corazon Reyes, from the surrender of the leased stalls. The insolvency court denied her motions, holding the unregistered mortgage gave her no preference.
Petitioner filed a petition for certiorari with the Court of Appeals (CA-G.R. SP No. 15350), arguing her subsequent registration made her a preferred creditor. The CA dismissed the petition on March 22, 1983, ruling that under Article 2140 of the Civil Code, registration is essential for a chattel mortgage’s validity, and subsequent registration cannot retroact to the insolvency filing date to prejudice other creditors. This dismissal became final. Later, petitioner filed a new motion in the insolvency court, now claiming preferred status under Article 2244(14) of the Civil Code, as her credit was embodied in a public instrument (the notarized promissory note and chattel mortgage). The trial court denied this. Petitioner then filed a second certiorari petition with the Court of Appeals (CA-G.R. SP No. 04629).

ISSUE

Whether the Court of Appeals correctly denied due course to petitioner’s second certiorari petition on the ground of res judicata.

RULING

Yes, the Court of Appeals correctly applied the principle of res judicata. The Supreme Court affirmed the CA’s resolutions. The core issue in both the first and second petitions was fundamentally the same: whether petitioner Salido is a preferred or secured creditor in the insolvency proceedings. In the first petition, she anchored her claim on the chattel mortgage. In the second, she merely changed her legal theory, invoking Article 2244(14) of the Civil Code concerning credits in a public instrument. This shift in legal ground does not create a new cause of action.
The Court emphasized that res judicata bars the re-litigation of the same issue between the same parties, even if a different ground or theory of recovery is asserted, provided that ground existed at the time of the first suit. Allowing a party to pursue successive suits by varying the form of action or legal theory would result in piecemeal and harassing litigation, which the doctrine seeks to prevent. Since the CA had already rendered a final ruling rejecting her claim for preference in the first petition, she was barred from re-opening the same ultimate issue under a different legal guise. The subsequent registration of the mortgage did not alter this, as the CA had already ruled it had no retroactive effect to the critical date of the insolvency petition’s filing.