Case Digest (G.R. No. 212674)
Facts:
In 1996, Central Visayas Finance Corporation lent Spouses Eliezer S. Adlawan and Leila Adlawan Php3,669,685.00, evidenced by a Promissory Note, secured by a Chattel Mortgage over a Komatsu dump truck and a Continuing Guaranty executed by Spouses Eliezer, Sr. and Elena Adlawan. After default, petitioner filed replevin in Civil Case No. CEB-22294; the RTC ruled for petitioner on June 22, 1999, ordered delivery, and petitioner foreclosed and bought the truck at auction for Php500,000.00. Petitioner later filed Civil Case No. CEB-24841 for collection/deficiency (claimed at Php2,104,604.97) against the debtors and guarantors; the RTC dismissed the case on July 31, 2008 as barred by res judicata, the Court of Appeals affirmed on February 15, 2013, and this Court denied the petition.
Issues:
- Did the Court of Appeals err in applying res judicata to bar Civil Case No. CEB-24841 given the alleged absence of identity of parties and causes of action with Civil Case No. CEB-22294?
- Did the Court of Appeals err in applying PCI Leasing v. Dai to hold that the replevin judgment barred a subsequent deficiency action?
Ruling:
The Court denied the petition and affirmed the February 15, 2013 Decision and April 24, 2014 Resolution of the Court of Appeals. The Court held that Civil Case No. CEB-24841 was barred by res judicata because the deficiency claim could have been raised in Civil Case No. CEB-22294. The Court also ruled that the guaranty-based claims against Spouses Eliezer, Sr. and Elena Adlawan were extinguished by the final resolution of the replevin action.
Ratio:
The Court reasoned that the replevin complaint in CEB-22294 prayed alternatively for possession or, if delivery was impossible, for a money judgment; thus the action was a mixed (in rem and in personam) proceeding and, under Section 47, Rule 39, a final judgment is conclusive as to matters that could have been raised therein. Precedents such as Bachrach Motor Co. v. Icarangal, PCI Leasing v. Dai, Allandale Sportsline Inc., and Marilag v. Martinez supported that a creditor may not split a single cause of action or pursue successive remedies when the claimed deficiency could have been litigated in the prior action. Finally, Article 2076 of the Civil Code rendered the guaranty accessory, so extinguishment of the principal obligation defeated recovery against the guarantors.
Doctrine:
- A replevin action is mixed; an alternative prayer for a money judgment makes deficiency claims cognizable in the same action and may bar a subsequent deficiency suit by res judicata.
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