Facts:

The case involves Felipe Juan and Faustina Chu-Ongco as plaintiffs and Go Cotay and others as defendants. The events leading to the case began when the plaintiffs purchased 203 cavanes of palay from the defendants for the sum of P398.75. Despite the plaintiffs delivering the payment, the defendants failed to deliver the palay as agreed. Consequently, the plaintiffs filed a complaint in the Justice of the Peace Court, seeking either the delivery of the palay or its monetary equivalent, along with damages and costs. The Justice of the Peace Court ruled in favor of the plaintiffs, ordering the defendants to pay the sum of P398.75. However, upon appeal to the Court of First Instance, this judgment was reversed, and the defendants were absolved of all liability. In a subsequent action, the plaintiffs reiterated their claims regarding the purchase and non-delivery of the palay, seeking a resolution of the contract, a return of the P398.75, and damages amounting to P310.25. Notably,...

Facts:

1. Parties and Claims:

   • Plaintiffs: Felipe Juan and Faustina Chu-Ongco.
   • Defendants: Go Cotay et al.
   • The plaintiffs filed two actions against the defendants.

2. First Action:

   • Filed in the justice of the peace court.
   • Alleged that plaintiffs purchased 203 cavanes of palay from defendants for P398.75.
   • Plaintiffs paid the amount but defendants failed to deliver the palay.
   • Plaintiffs sought delivery of the palay or its value in money, plus damages and costs.
   • Judgment was rendered in favor of the plaintiffs for P398.75.
   • On appeal to the Court of First Instance, the judgment was reversed, and defendants were absolved.

3. Second Action:

   • Filed in the Court of First Instance.
   • Same allegations as the first action regarding the purchase and non-delivery of palay.
   • Plaintiffs sought:
     (1) Rescission of the contract;
     (2) Return of P398.75;
     (3) Damages of P310.25 and costs.

4. Key Issue:

   • Whether the judgment in the first action operates as res judicata, barring the second action.

5. Plaintiffs' Argument:

   • The first action was for specific performance, while the second is for rescission and damages.
   • Cited Article 1124 of the Civil Code, which allows a party to choose between specific performance or rescission with damages.

6. Defendants' Position:

   • The second action is barred by res judicata because the subject matter and parties are identical to the first action.

Issue:

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Ruling:

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Ratio:

1. Res Judicata Applies:

   • The first and second actions involved the same parties, subject matter, and claims.
   • The plaintiffs' prayer for alternative relief (specific performance or rescission with damages) in the first action encompassed all issues raised in the second action.
   • The courts in the first action acted within their jurisdiction, and their judgment is final and conclusive.

2. Article 1124 of the Civil Code:

   • While Article 1124 allows a party to choose between specific performance or rescission, the plaintiffs' claim in the first action already included both remedies.
   • The plaintiffs cannot relitigate the same matter under a different legal theory after losing in the first action.

3. Finality of Judgments:

   • The principle of res judicata ensures finality in litigation and prevents endless disputes over the same issue.
   • To allow the second action would undermine the respect for final judgments and the stability of legal rights.