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. The assignee in insolvency, private respondent Corazon Reyes, included the mortgaged properties in the insolvent estate’s inventory, later surrendering the leasehold rights to the lessors and realizing P86,000.00 in goodwill, which was deposited with the court.
Petitioner moved to exclude the mortgaged properties from the inventory and to be paid the P86,000.00, claiming status as a secured creditor. The insolvency court denied her motions. She then filed a petition for certiorari with the Court of Appeals (CA-G.R. SP No. 15350), arguing her subsequent mortgage registration made her a preferred creditor entitled to foreclose. The CA dismissed the petition, ruling that under Article 2140 of the Civil Code, registration is essential for a chattel mortgage’s validity, and subsequent registration does not retroact to the insolvency filing date to confer preference over other creditors.

ISSUE

Whether the Court of Appeals correctly denied due course to petitioner’s subsequent petition for certiorari (CA-G.R. SP No. 04629), which sought to have her declared a preferred creditor under Article 2244(14) of the Civil Code on the alternative ground that the obligation was embodied in a public instrument.

RULING

Yes, the Court of Appeals correctly denied the petition on the ground of res judicata. The Supreme Court affirmed the CA’s resolutions. The core legal issue—whether petitioner is a preferred creditor in the insolvency proceedings—had already been conclusively litigated and resolved against her in the first CA case (CA-G.R. SP No. 15350). In that prior proceeding, the CA definitively ruled that her unregistered chattel mortgage at the time of the insolvency petition’s filing was invalid and did not confer upon her the status of a secured or preferred creditor entitled to the proceeds from the mortgaged properties.
The principle of res judicata bars the re-litigation of the same cause of action between the same parties. Petitioner’s second petition, though invoking a different legal provision (Article 2244(14) of the Civil Code concerning credits in a public instrument), essentially sought the same ultimate relief: a declaration of preference over the insolvent estate’s assets. This issue existed and could have been raised in the first petition. A party cannot evade res judicata by varying the form of action or adopting a different legal theory for a claim that has already been adjudicated. Allowing such piecemeal litigation would be harassing and contrary to the finality of judgments. Therefore, the CA committed no error in summarily dismissing the subsequent petition.