**Title:** Allied Banking Corporation v. Court of Appeals and Filoteo Alano
**Facts:**
– **Initial Complaint:** On May 25, 1987, Allied Banking Corporation filed a complaint (Civil Case No. 16837, First Case) in the Regional Trial Court (RTC) of Makati against Dearfield, Incorporated, and several parties, including Filoteo Alano. The complaint was based on promissory notes, letters of credit, and trust receipts executed by Dearfield.
– **Motion to Dismiss:** On November 16, 1987, Alano filed a motion to dismiss, arguing that the complaint did not state a cause of action against him since it did not mention his involvement in the transactions nor include certain annexes. On June 20, 1988, the trial court granted Alano’s motion, finding no cause of action against him.
– **Procedural History:** Allied’s motion for reconsideration was denied on September 15, 1988. On December 14, 1988, Allied appealed by certiorari to the Supreme Court (G.R. No. 86009), which dismissed the petition on April 17, 1989, for being filed late and lacking merit.
– **Second Complaint:** On October 31, 1990, Allied filed a new complaint (Civil Case No. 90-54998, Second Case) in the RTC of Manila against Alano and Feliciana Camara, based on the same instruments and causes of action as the First Case. Alano filed a motion to dismiss arguing res judicata and no cause of action.
– **Trial Court and Appellate Decision:** On March 1, 1991, the RTC dismissed the Second Case. Allied appealed to the Court of Appeals, which affirmed the trial court in CA-G.R. CV No. 33307 on November 25, 1992.
– **Supreme Court Petition:** Allied filed a petition for review with the Supreme Court on January 21, 1993, arguing that the dismissal of the First Case was not a judgment on the merits and that there was no identity of causes of action.
**Issues:**
1. Whether the dismissal of the First Case constitutes a judgment on the merits.
2. Whether the doctrine of res judicata applies, thereby barring the Second Case.
**Court’s Decision:**
– **Judgment on the Merits:** The Supreme Court held that the dismissal of the First Case was indeed on the merits. Although no trial occurred and the dismissal was based on a motion, it was still a judgment on the merits because it addressed the substantial rights and obligations of the parties.
– **Res Judicata:** The Supreme Court found all four elements of res judicata present:
1. **Final Judgment:** The RTC’s dismissal and the Supreme Court’s dismissal of Allied’s appeal made the judgment final.
2. **Court’s Jurisdiction:** The RTC of Makati had jurisdiction over the First Case.
3. **Judgment on the Merits:** As previously determined, the dismissal for lack of cause of action addressed the substantive rights.
4. **Identity of Parties, Subject Matter, and Causes of Action:** The same parties (Allied and Alano), same subject matter (promissory notes, letters of credit, trust receipts), and identical causes of action were involved in both cases.
The Supreme Court denied the petition, affirming the application of res judicata to bar the Second Case.
**Doctrine:**
– **Res Judicata:** A matter already adjudged by a competent court is conclusive between the same parties on the same issues in any future lawsuit. This doctrine ensures finality in litigation.
– **Judgment on the Merits:** Even dismissals based on motions can constitute judgments on the merits if they address the substantive rights of the parties involved.
**Class Notes:**
– **Res Judicata:** Four essential elements: (1) final judgment, (2) jurisdiction over parties and subject matter, (3) judgment on the merits, and (4) identity of parties, subject matter, and causes of action. (Art. 131, Admin Code)
– **Cause of Action:** Defined as the act or omission by which a party violates a right of another (Sec. 1, Rule 2, Rules of Court).
**Historical Background:**
– **Judicial Economy:** The case emphasizes the importance of judicial economy and finality, resonating with global principles to mitigate prolonged litigation.
– **Procedural Nuances:** The maneuvering through procedural dismissals, and appeals reinforce the need for thorough initial pleadings and strategically filing motions.
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