G.R. No. L-6809, March 22, 1912
GREGORIO PEÑALOSA, plaintiff-appellee, vs. DEMETRIO TUASON, ET AL., defendants-appellants.

FACTS

Gregorio Peñalosa entered into an oral contract of lease for a tract of land with Mariano Tuason, later ratified by Demetrio Tuason acting for himself and the other co-owner defendants. Peñalosa took possession, made improvements, and paid part of the rent. The defendants failed to execute a written contract as allegedly agreed. Demetrio Tuason (for himself and/or the co-owners) filed a summary action for ejectment (unlawful detainer) against Peñalosa before the Justice of the Peace of Manila, alleging non-payment of rent. The court ruled in favor of Tuason, ordering Peñalosa’s ejectment and payment of unpaid rent. Peñalosa was evicted and some of his personal property was sold at auction to satisfy the money judgment. Subsequently, Peñalosa filed the present action in the Court of First Instance against Demetrio Tuason and the other co-owners, seeking: (1) specific performance of the lease contract; (2) damages for his ejectment and the sheriff’s sale; and (3) compensation for improvements. The trial court ruled in favor of Peñalosa, ordering specific performance and awarding damages. The defendants appealed, raising the defense of res judicata.

ISSUE

Whether the judgment in the summary ejectment case before the Justice of the Peace constitutes res judicata and bars the present action for specific performance and damages.

RULING

Yes. The Supreme Court reversed the trial court’s decision and dismissed the complaint. The judgment in the prior ejectment case is a bar to the present action under the principle of res judicata.

The Court held that the existence of a landlord-tenant relationship and Peñalosa’s alleged breach (non-payment of rent) had already been conclusively adjudicated in the summary action. In that case, the Justice of the Peace found that a rental contract existed but was violated by Peñalosa’s failure to pay rent, justifying rescission, ejectment, and a money judgment. These findings are binding.

Peñalosa’s argument that Section 87 of the Code of Civil Procedure (stating a judgment in a summary action for possession is no bar to a subsequent action for damages) allowed the present suit was rejected. The Court reasoned that the provision could not be applied to circumvent res judicata where, as here, the facts alleged in the second action (e.g., readiness to pay rent, defendants’ failure to reduce the contract to writing) would have constituted a complete defense in the first action and should have been raised therein.

Furthermore, on the matter of parties, the Court found that whether Demetrio Tuason sued alone or represented the co-owners in the ejectment case, the res judicata defense stands. If he sued alone, the judgment binds him and bars specific performance against him, which is essential for relief against all defendants. If he represented the others, they are privies and are equally bound by the prior judgment. Therefore, the plea of res judicata should have been sustained.