There is also identity of parties in both cases.
Absolute identity of parties is not required, substantial identity of parties suffices.
P.L. Uy Realty Corporation v. ALS Management and Development Corporation
"there is substantial
identity of parties when there is a community of interest between a party in the first case and a party in the
second; and such identity of interest is sufficient to make them privy-in-law."
The principle of
res judicata
may not be evaded by the expedient of adding or eliminating some parties to
the first and second action.
Accordingly, although not impleaded in Civil Case before RTC of Pasig, petitioners are "privy-in-law" to the
compromise, because they are sued under a common cause of action with the Cuaycong brothers in Civil
Case in RTC of Paranaque.
Since
res judicata
applies, respondents cannot be permitted to further pursue a complaint for moral and
exemplary damages and attorney's fees against petitioners.
A judgment based on a compromise agreement is a judgment on the merits.
Hence, the compromise in Civil Case in RTC of Pasig bars the continuation of Civil Case in RTC of
Paranaque
SC also upheld the contention of petitioners that the payment of Php 7,040,645.22 under the Compromise
Agreement has extinguished the entire claim of respondents in Civil Case in RTC of Paranaque,
Petitioners and the Cuaycong brothers were sued as solidary debtors in the Original Complaint; and under
the Civil Code, payment made by one of the solidary debtors extinguishes the obligation.
76
Hence, the
payment of the Cuaycong brothers under the Compromise Agreement effectively satisfied the claim as to all
of them (solidary debtors).
JUDGMENT: WHEREFORE
, the consolidated petitions are
GRANTED
. The assailed Decision and Resolution of the
Court of Appeals dated June 29, 2007 and August 3, 2007, respectively, are hereby
SET ASIDE.
The Order of the
trial court dated October 22, 2003 dismissing Civil Case No. 02-1049 is
REINSTATED
. No costs.
