GR L 12541; (March, 1960) (Digest)
G.R. No. L-12541. March 30, 1960.
ROSARIO U. YULO, assisted by her husband Jose C. Yulo, plaintiffs-appellants, vs. YANG CHIAO SENG, defendant-appellee.
FACTS
Plaintiff-appellant Rosario U. Yulo filed a motion to reopen the case, alleging that the relationship between her and defendant-appellee Yang Chiao Seng as partners had already been definitively decided by the Court of Appeals in a prior case (Sta. Marina, et al. vs. Rosario U. Yulo and Yang Chiao Seng, C.A. G.R. No. 8143-R). In that prior ejectment case, the Court of Appeals, in determining the reasonable rental value of a property, noted that partnership papers indicated P3,000 represented Yulo’s share in partnership profits, not the reasonable rent. In the present case, Yulo claims a partnership exists in a cinematograph business, while Yang Chiao Seng contends the relationship is merely that of sublessor and sublessee.
ISSUE
Whether the doctrine of res judicata applies based on the prior Court of Appeals decision, thereby binding the parties to a finding of partnership in the present case.
RULING
No, res judicata does not apply. The Supreme Court denied the motion to reopen and upheld its final conclusion that the relationship between Yulo and Yang Chiao Seng is merely that of sublessor and sublessee, not partners. For res judicata to apply, there must be identity of parties, cause of action, and subject matter. In the prior Court of Appeals case: (1) the parties were different (Emilia and Maria Carrion Sta. Marina as plaintiffs vs. both Yulo and Yang Chiao Seng as defendants); (2) the cause of action was ejectment and the issue was the reasonable rental value of the property; and (3) the subject matter involved the rental value, not the nature of the business relationship between Yulo and Yang Chiao Seng. In contrast, the present case involves Yulo and Yang Chiao Seng as direct adversaries, with the cause of action centering on whether a partnership exists in the cinematograph business. There is no identity of parties, issue, or cause of action. The Court cited Freeman on Judgments, stating that parties to a judgment are not bound by it in a subsequent controversy between each other unless they were adversary parties in the original action. The record was ordered remanded to the lower court as the judgment had become final.