Facts:

• Spouses Fernando and Irma Torres (petitioners) mortgaged their property to Amparo Medina (respondent) via a Deed of Mortgage dated December 20, 1993.
• Medina applied for the extrajudicial foreclosure of the property on July 28, 1994.
• The property was sold at a public auction on June 30, 1997, with Medina as the highest bidder, and a Certificate of Sale was issued to her.
• On September 21, 1999, the Spouses Torres filed a complaint (Civil Case No. Q-99-38781) before the RTC of Quezon City to nullify the extrajudicial foreclosure.
• They argued that the mortgage deed lacked a specific term, the statement of account was not a valid loan, the credit transaction violated the Truth in Lending Act, and foreclosure would result in unjust enrichment due to double recovery.
• Medina filed a motion to dismiss the complaint on the grounds of res judicata and forum shopping, citing a previous case (Civil Case No. Q-94-18962) that had dismissed similar claims.
• The RTC granted Medina's motion, and the decision was upheld by the Court of Appeals (CA).
• The Spouses Torres then filed a petition for review with the Supreme Court.

Issue:

• (Unlock)

Ruling:

1. Yes, res judicata bars the filing of Civil Case No. Q-99-38781.
2. No, the extrajudicial foreclosure of mortgage does not contravene the equitable principle of unjust enrichment.
3. No, the filing o...(Unlock)

Ratio:

• The Supreme Court ruled that res judicata applies as all four elements are present: a final judgment on the merits by a court of competent jurisdiction, and identity of parties, subject matter, and causes of action between Civil Case No. Q-94-18962 and Civil Case No. Q-99-38781.
• The Court emphasized that the validity of the real estate mortgage had already been settled in the previous case and could not be reopene...continue reading