G.R. No. L-2847 May 28, 1951
MAXIMINO VALDEZ, ET AL., plaintiffs-appellants, vs. MAGDALENA MENDOZA, ET AL., defendants-appellees.

FACTS

Plaintiffs-appellants Maximino Valdez and his daughter Emerita Valdez filed Civil Case No. 293 in September 1948 against the administrator and heirs of the deceased Juan Valdez (Maximino’s son). They sought to be declared owners of one-half of Lot No. 1882 in San Miguel, Bulacan, registered in Juan’s name under TCT No. 21866. Their claim was based on a private document (Exhibit A) executed by Juan Valdez on May 6, 1946, wherein he stated that the true owner was his father Maximino and that he was returning one-half of the property to his father and sister Emerita. The defendants moved to dismiss, pleading res judicata, citing a prior case, Civil Case No. 6159 of the same court. In that case, decided on July 31, 1943, Basilia Valdez (another daughter of Maximino), as administratrix of her mother’s estate, sued to annul a mortgage, foreclosure, and subsequent transfers involving the same lot, alleging it was conjugal property. Maximino, Maria Valdez, and Juan Valdez were among the defendants, and they successfully defended that Maximino was the exclusive owner and the mortgage was valid. The trial court dismissed Civil Case No. 293, sustaining the plea of res judicata, holding identity of parties, subject matter, and causes of action. The plaintiffs appealed.

ISSUE

Whether the plea of res judicata was correctly sustained, specifically whether the judgment in Civil Case No. 6159 is conclusive in the subsequent litigation (Civil Case No. 293) between the plaintiffs and the heirs of Juan Valdez.

RULING

No. The Supreme Court reversed the appealed resolution. The Court held that the plea of res judicata was erroneously upheld. While a judgment in favor of multiple defendants is conclusive on the plaintiff against them, it ordinarily settles nothing as to the relative rights or liabilities of co-defendants among themselves unless their hostile or conflicting claims were actually brought into issue in the former suit by cross-petition or separate and adverse answers. In Civil Case No. 6159, Maximino and Juan Valdez were co-defendants who presented a common defense against the plaintiff’s claim; their potential conflicting claims to the property were not litigated. Furthermore, Emerita Valdez was not a party to the first case and is litigating based on a document executed after that case was decided. The Court remanded the case to the lower court for further proceedings on the merits, without passing upon the enforceability of Exhibit A or the effect of any alleged fraudulent collusion between Maximino and Juan. Costs were awarded in favor of the plaintiffs.