G.R. No. L-18078; October 31, 1962
AGRICULTURAL CREDIT AND COOPERATIVE FINANCING ADMINISTRATION (ACCFA), plaintiff-appellant, vs. GOYENA LUMBER COMPANY, ET AL., defendants-appellees.

FACTS

The dispute involves a warehouse constructed by Bugallon Facoma on land owned by Maxima Bauson. Goyena Lumber Company supplied the construction materials. To secure a loan for the construction, Bugallon Facoma mortgaged the warehouse to the Agricultural Credit and Cooperative Financing Administration (ACCFA), with the mortgage registered on March 27, 1957. Bugallon Facoma failed to pay Goyena Lumber Company, which obtained a judgment for the debt and levied the warehouse in execution. ACCFA filed a third-party claim but failed to prosecute it. Consequently, the warehouse was sold at public auction to Goyena Lumber Company on March 3, 1958, with a certificate of final sale issued later.
Subsequently, ACCFA filed for foreclosure of its mortgage against Bugallon Facoma, without including Goyena Lumber Company as a defendant. A judgment of foreclosure was rendered, and the warehouse was sold at auction to ACCFA on May 27, 1959. Prior to this, on October 14, 1959, ACCFA filed an injunction case (Civil Case No. D-988) to restrain Goyena Lumber Company from demolishing the warehouse. This complaint was dismissed on December 17, 1959, with the court declaring Goyena Lumber Company the owner of the warehouse. ACCFA did not appeal, making the decision final.

ISSUE

Whether the trial court correctly dismissed ACCFA’s amended complaint on the ground of res judicata.

RULING

Yes, the dismissal on the ground of res judicata was proper. The Supreme Court affirmed the lower court’s order. For res judicata to apply, the following requisites must be present: (a) a final judgment; (b) the court’s jurisdiction over the subject matter and parties; (c) a judgment on the merits; and (d) identity of parties, subject matter, and cause of action between the two cases. All these requisites are satisfied here.
The judgment in the first injunction case (Civil Case No. D-988) was a final judgment on the merits by a court with proper jurisdiction. The parties in both cases are identical: ACCFA and Goyena Lumber Company. The subject matter litigated is the same warehouse. The cause of action is also identical, as both suits essentially sought to resolve the right to possess and control the warehouse to prevent its demolition. ACCFA’s argument that it sued in different capacities—first as a mortgagee and later as an owner—is inconsequential. Jurisprudence holds that where a party, though appearing in different capacities, is in fact litigating the same right, the requisite identity of parties exists for res judicata to apply. The additional cause of action for foreclosure of an equity of redemption in the amended complaint is immaterial, as it is predicated on the same claim of ownership already conclusively adjudicated in the prior case. Therefore, the principle of res judicata bars the subsequent action.