G.R. No. L-4085

CARLS PALANCA TANGUINLAY, plaintiff-appellant, vs. FRANCISCO G. QUIROS, ET AL., defendants-appellees.

March 12, 1908

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FACTS:
In 1893, Francisco G. Quiros (defendant) obtained an attachment against Carls Palanca Tanguinlay‘s (plaintiff) property, including promissory notes, money, hemp, coprax, merchandise, and furniture. Jose Reyes Tolentino, a Quiros employee, was appointed official depository but never took possession; the goods remained in Quiros’ custody. In January 1894, Germann and Co. levied a second attachment on the same property. Quiros’ attachment was dissolved in November 1897, and Germann’s lapsed. In 1898, Tanguinlay’s agent, Mr. Andrea, removed the merchandise from Quiros’ house without Quiros’ opposition. In 1904, a new attachment by Germann and Co. led to the sale of remaining hemp and coprax.

Previously, Quiros sued Tanguinlay for the purchase price of goods. In that case, Tanguinlay (as defendant) filed a counterclaim for damages (P20,000) and loss of profits (P40,000) due to the improper attachment, expressly claiming compensation for the loss of the same property now in dispute. The Court of First Instance initially allowed P6,347 on this counterclaim, but the Supreme Court, on March 3, 1906 (5 Phil. 675), reversed this allowance, holding Quiros not liable, reasoning that no damage was shown while the property was in his possession, and it was later taken and sold under Germann & Co.’s attachment. This reasoning proceeded on what Tanguinlay now claims was an error of fact.

The present action was brought by Tanguinlay “for the restitution and delivery” of the attached property, or, in default, for “the payment of the sum of P18,000” as its value. Quiros pleaded res judicata based on the prior Supreme Court judgment.

ISSUE:
Does the prior judgment, which denied Tanguinlay’s counterclaim for damages stemming from the loss of the same property due to the attachment, constitute res judicata, thereby barring the present action for the restitution or value of that property?

RULING:
Yes. The Supreme Court affirmed the lower court’s judgment in favor of the defendants, upholding the defense of res judicata.

The Court held that the prior judgment operates as an adjudication upon the matter of the present action, preventing its retrial. Under the well-settled doctrine of res judicata, a judgment between the same parties on the same claim bars a second action, not only as to issues actually litigated but also as to all matters which might have been litigated.

The Court noted that Sections 306 and 307 of the Philippine Code of Civil Procedure, derived from California law, align with this general rule. The phrase “litigating for the same thing” in Section 306 applies here. The “thing” deemed to have been adjudged in the former judgment was the conversion of the specific property now sued for.

The previous Supreme Court judgment determined that Quiros was not liable for the property. While Tanguinlay now argues this was based on an error of fact and offers new proofs, these proofs existed at the time of the first trial and should have been produced then. It is too late to repair the error through a retrial of previously determined issues.

The difference in the form of action (damages for lost property in the first case vs. restitution/value of the property in the second) is immaterial. Courts are concerned with the substance of the claim. The parties were “litigating for the same thing,” and the possession of that thing “appears upon the face of the judgment to have been so adjudged” and was “actually and necessarily included therein and necessary thereto.” The fact that the first judgment might have been erroneous does not affect the principle of res judicata; any error should have been demonstrated in the first trial. The Court cited American and Spanish jurisprudence supporting this principle.