G.R. No. 110401 August 23, 1995 GUEVARRA VS. HON.

BENITO FACTS: On March 16, 1992 petitioner spouses Guevara and the PR Far East Bank & Trust o! entered into a co"pro"ise a#ree"ent in $hich P had %rou#ht in theRT Mani&a, 'or the recover( o' propert( 'orec&osed %( the %ank! )ttached to the a#ree"ent $as a *eed o' onditiona& +a&e e,ecuted %( the parties and "ade a part o' the a#ree"ent, $here%( in consideration o' the su" o' P-9.,96/!// the %ank a#reed to rese&& to petitioners the propert( $hich the &atter 'or"er&( o$ned, $hich had %een 'orec&osed %( the %ank!0nder the co"pro"ise a#ree"ent, p $ere to #ive a *P o' P-1,///!// and pa( the %a&ance o' P-12,96/!// in t$e&ve 3124 "onth&( insta&&"ents o' P25,.2/!// each, startin# Fe%ruar( -, 1992, p&us interest a t the rate o' 226! +hou&d petitioners 'ai& to pa( an( insta&&"ent on ti"e, it $as stipu&ated that the( $ou&d 'or'eit a&& pa("ents "ade and the %ank $ou&d then %e entit&ed to rescind the *eed o' onditiona& +a&e! the RT approved the co"pro"ise a#ree"ent and rendered 7ud#"ent in accordance $ith its ter"s and conditions!P paid the 'irst three insta&&"ents! On +epte"%er 2/, 1992, ho$ever, the( 'i&ed a co"p&aint, $hich the( &ater a"ended on *ece"%er 1., 1992, in the RT o' Makati, a&&e#in# that %ecause o' race riotin# in 8os )n#e&es, a&i'ornia 'o&&o$in# the ac9uitta& o' po&ice o''icers invo&ved in the "anhand&in# o' Rodne( :in#, a %&ack, petitioners; 'i&" %usiness in a&i'ornia $as disrupted, $ith conse9uent de&a( in pa("ent %( the +tate o' petitioners; c&ai" 'or 'i&" and te&evision pro7ects, and that petitioners re9uested and private respondent a#reed to $aive the ti"e c&ause o' the "onth&( insta&&"ents! <o$ever, so it $as a&&e#ed, the parties 'ai&ed to 'i, the schedu&e o' pa("ent o' the %a&ance o' the purchase price! Petitioners pra(ed that a ne$ period 'or pa("ent o' the %a&ance %e 'i,ed and that private respondent %e ordered to reconve( the propert( to the" upon 'u&& pa("ent o' the %a&ance! Private respondent denied that it had a#reed to $aive the ti"e c&ause! =t asked the court to dis"iss petitioner;s co"p&aint on the #round that it $as %arred %( the 7ud#e"ent in the prior case 3 ivi& ase no! .5>-1-/4 decided %( the RT o' Mani&a! The RT #ranted private respondent;s "otion and dis"issed the 'i&ed %( P! MR $as a&so denied! ivi& ase

HE !: @O! For a 7ud#"ent to constitute a %ar to a su%se9uent case 314 it "ust %e a 'ina& 7ud#"entA 324 the court $hich rendered it "ust have 7urisdiction over the su%7ect "atter and the partiesA 324 it "ust %e on the "eritsA and 3-4 there "ust %e %et$een the t$o cases identit( o' parties, su%7ect "atter, and causes o' action. A"" #"#$#%ts o& res judicata, #'(#)t t*# "+st, +,# ),#s#%t *#,#! For $hi&e there is an identit( o' parties, there is none as to su%7ect "atter and cause o' action %et$een ivi& ase @o! .5>-1-/ and ivi& ase @o! 92>2.1.!The su%7ect "atter o' the 'irst case 3 ivi& ase @o! .5>-1-/4 $as the resa&e to petitioners o' the propert( $hich the %ank had ac9uired throu#h 'orec&osure sa&e, $hereas the su%7ect "atter o' the second case 3 ivi& ase @o! 92>2.1.4, is the reschedu&in# o' pa("ent o' the propert( a'ter the parties ori#ina&&( 'i,ed it in their co"pro"ise a#ree"ent!@or are the causes o' action in the t$o cases the sa"e, so "uch so that the sa"e evidence $ou&d not support %oth o' the", $hich is the test o' the identit( o' causes o' action! =ndeed the causes o' action cannot %e the sa"e 'or the reason that, i' true, the cause o' action in the co"p&aint in ivi& ase @o! 92>2.1. on&( arose after the 7ud#"ent in ivi& ase @o! .5>-1-/! T*# ),-%(-)"# o& res judicata .o#s %ot +))"/, since it e,tends on&( to the 'acts and conditions as the( e,isted at the ti"e the 7ud#"ent $as rendered! 3 a&Ba v! ourt o' )ppea&s, 229 + R) 212 3199-4 Petitioners; c&ai" is that private respondent a#reed to $aive in their 'avor the ti"e c&ause in the *eed o' onditiona& +a&e startin# $ith the insta&&"ent $hich %eca"e due on Ma( -, 1992! The( are thus a&&e#in# 'acts $hich did not occur unti& a'ter the 7ud#"ent %( co"pro"ise had %een rendered in ivi& ase @o! .5>-1-/ on March 2/, 1992! This case is #overned %( the ru&in# in Lao Lim v. Court of Appeals, 191 + R) 111 3199/4 that a co"pro"ise a#ree"ent and that an( cause o' action that "i#ht arise a'ter the "akin# o' the a#ree"ent and that an( cause o' action $hich "a( arise 'ro" the app&ication or vio&ation o' the co"pro"ise a#ree"ent is not %arred %( $hat $as sett&ed in the prior case! =t "a( ver( $e&& %e that petitioners are c&ai"in# novation o' the co"pro"ise a#ree"ent "ere&( to escape the e''ects o' their nonco"p&iance there$ith or that i' there is indeed an( ne$ contract it is unen'orcea%&e under the +tatute o' Frauds! This is, ho$ever, a "atter o' de'ense and proo' $hich is proper&( &e't 'or deter"ination %( the tria& court a'ter tria&!

ISSUE: ?O@ the 7ud#"ent %ased on the co"pro"ise a#ree"ent in ivi& ase constitutes res judicata in the su%se9uent case %et$een the sa"e parties!