G.R. No.

168139               January 20, 2009 The counterclaim is likewise dismissed.

FERDINAND S. AGUSTIN, Petitioner, SO ORDERED.7

vs.
The decision lapsed into finality and was enforced by the respondents
SPS. MARIANO and PRESENTACION DELOS SANTOS, Respondents.
through the imposition and collection of the monthly rent and the
DECISION corresponding fifteen percent (15%) increase thereon. A few months
thereafter, respondents, in a Notice of Termination dated October 10, 2002,
PUNO, C.J.:
informed petitioner of the termination of the verbal month-to-month contract
Before us is a petition for review on certiorari under Rule 45 seeking a review of lease and gave him thirty (30) days within which to vacate and peacefully
of the Decision1 and Resolution2 of the Court of Appeals (CA) in CA G.R. SP surrender the premises.8
No. 80586 partly reversing the decision3 of the Regional Trial Court (RTC),
The petitioner failed to vacate the premises despite notice. Thus, respondents
Branch 33, Manila.
again filed a complaint for ejectment against petitioner on the ground of
As borne by the records, respondent spouses Mariano delos Santos and termination of the contract of lease. The second ejectment case, which is the
Presentacion delos Santos are the lawful owners of apartment units located at subject of the instant petition, was docketed as Civil Case No. 174168 in
230 Manrique Street, Sampaloc, Manila.4 On the other hand, petitioner Branch 15 of the MeTC of Manila.
Ferdinand Agustin has continuously occupied one of respondents' apartment
In a decision dated June 12, 2003, the MeTC, Branch 15 ruled that
units since 1990 for a monthly rent of two thousand pesos (₱2,000.00). The
petitioner's reliance on res judicata was misplaced because the cause of
monthly rental was increased to two thousand three hundred pesos (₱2,300.00)
action in Civil Case No. 174168 is anchored on a different
in May 1999.5
ground.9 According to the MeTC, the verbal lease contract that existed
On May 10, 2000, respondents filed a complaint for ejectment against petitioner between the parties on a month-to-month basis pursuant to Article 1687 of
before Branch 22 of the Metropolitan Trial Court (MeTC) of Manila docketed as the Civil Code is one with a fixed term, and terminates at the end of each
Civil Case No. 167142-CV. Respondents alleged that they needed to repossess month, if notice to vacate is properly given. Accordingly, the lease period had
the apartment unit occupied by the petitioner because their daughter’s children already expired. Hence:
would be studying at the University of Sto. Tomas in Manila.6
WHEREFORE, premises considered, judgment is hereby rendered in favor
In a decision dated January 9, 2002, the MeTC, Branch 22 held: of plaintiffs and against defendant, ordering the latter and all persons
claiming right under him, to vacate the subject premises and surrender
Based on the evidence adduced by both parties, this Court is of the opinion, and
peaceful possession thereof to the plaintiffs, and for defendant to pay
so holds that the instant complaint for ejectment lodged by the plaintiffs against
plaintiffs:
the defendants, MUST BE DISMISSED for lack of cause of action, it appearing
that plaintiffs failed to comply with the requirements when the ground for a) the fair rental value or reasonable compensation for the continued
ejectment is personal need of the premises. use and occupation of the premises at the rate of P5,000.00 per
month effective upon the date of filing of the complaint on
WHEREFORE, premises considered, the instant complaint is hereby
November 19, 2002 and until the premises shall have been totally
DISMISSED without prejudice to the right of the plaintiffs to collect the
vacated; and
monthly rental of two thousand three hundred pesos (P2,300.00) agreed upon in
the Lease Contract and the corresponding fifteen percent (15%) increase thereof, b) attorney's fees in the amount of Ten Thousand (P10,000.00)
in accordance with the new rent control law with costs against the plaintiff. Pesos, plus the costs of suit.
SO ORDERED.10 excess of P5,000.00 a month or the sum of P2,217 a month beginning August
2003. The supersedeas bond put up by the appellant is ordered cancelled and
On appeal, the RTC of Manila reversed the MeTC decision, thus:
the appellees are ordered to pay the cost of the supersedeas bond; and to pay
The Court agrees with the first error cited by the defendant-appellant. the cost of suit.

Indeed, the Court a quo cannot require the defendant-appellant to pay the SO ORDERED.11
plaintiffs-appellees the amount of Php5,000.00 per month as the fair rental value
Respondents repaired to the CA, which partially reversed the findings of the
or a reasonable compensation for the continued use and occupation of the
RTC. In its decision, the CA found that the acts and omissions complained of
premises because before the termination of the month to month verbal contract
and involved in the two civil cases were not the same.12 Likewise, the
of lease, the rental being paid was P2,530.00 per month.
appellate court applied the "same evidence" test and decided that there was
xxx xxx xxx no identity of causes of action between the first and second cases of
ejectment as different facts and evidence were needed for the resolution of
The court a quo was in error when it ruled that res judicata does not apply in
each case, and consequently, the principle of res judicata as a bar by prior
this case.
judgment was inapplicable.13 It was also found that res judicata in the
The court a quo ruled that there is no res judicata because there is no identity of concept of "conclusiveness of judgment" will not apply since the "personal
cause of action. The Court stated that in the first ejectment case decided by Hon. need" issue decided upon in the first case is different from and does not
Hipolito dela Vega the ground for ejectment was based on the need by the lessor encompass any element of the "expiration of lease contract" at issue in the
of the leased premises, while the case at bar is based on the expiration or second case.14 Lastly, the CA declared that the lease contract between the
termination. This is erroneous because there is only one cause of action– parties was on a month-to-month basis and that petitioner should vacate the
unlawful detainer–although this cause of action may give the plaintiffs several subject premises because his lease had already expired.15 Thus, the
reliefs. They may eject the defendant on the ground of 'need of premises by dispositive portion of the decision reads:
owner' or 'expiration of the period of verbal lease agreement'. And when the
WHEREFORE, premises considered, the Decision dated October 14, 2003 of
plaintiffs-appellees filed two separate complaints for these reliefs against the
the Regional Trial Court, Branch 33, Manila is PARTLY REVERSED as
defendant-appellant, such acts constitute splitting up of the cause of action.
follows:
Thus, under Section 4, Rule 2 of the Revised Rules of Civil Procedure, 'If two or
more suits are instituted on the basis of the same cause of action, the filing of a) Appellees-petitioners' complaint for Ejectment is GRANTED;
one or a judgment upon the merits in any one is available as a ground for the
b) Appellant-respondent and all persons claiming right under him
dismissal of the others.
are hereby ORDERED TO VACATE the subject premises and to
Consequently, since the ejectment case based on 'the use of the premises by the surrender peaceful possession thereof to appellees-petitioners; and
owner' filed by the plaintiffs-appellees was dismissed on the merits by the
c) The appellees-petitioners must reimburse the appellant-
Honorable Judge Hipolito dela Vega, the filing of the case at bar against the
respondent the amount in excess of the monthly rental of P2,530.00
defendant-appellant may be dismissed on the ground of res judicata.
that the appellees-petitioners can charge until the appellant-
xxx xxx xxx respondent surrenders peaceful possession of the premises to them.

WHEREFORE, the judgment appealed from is REVERSED on the ground SO ORDERED.16

of res judicata. The Clerks of Court of the Regional Trial Court and the
Metropolitan Trial Court of Manila are ordered to return to the appellant the
Petitioner filed a motion for reconsideration of said Decision, which was also settled by the judgment therein and cannot again be litigated between the
denied by the appellate court. parties and their privies whether or not the claim, demand, purpose, or
subject matter of the two actions is the same.20
Persisting in his position that the principle of res judicata in its concept of bar by
prior judgment should apply in the instant case and that therefore, the first suit In the case at bar, petitioner seeks to apply the principle of res judicata in its
for ejectment should operate as a bar to the present action for ejectment, concept of "bar by prior judgment" by pointing out that the final decision
petitioner is now before us questioning the order of the CA for him to vacate the rendered in the first case for ejectment, Civil Case No. 167142-CV,
leased premises. constitutes a bar to the litigation of the second ejectment suit, the subject of
the instant petition.21
Res judicata is defined as "a matter adjudged; a thing judicially acted upon or
decided; a thing or matter settled by judgment."17 According to the doctrine We find no merit in the argument of the petitioner.
of res judicata, an existing final judgment or decree rendered on the merits, and
Res judicata applies in the concept of "bar by prior judgment" if the
without fraud or collusion, by a court of competent jurisdiction, upon any matter
following requisites concur: (1) the former judgment or order must be final;
within its jurisdiction, is conclusive of the rights of the parties or their privies, in
(2) the judgment or order must be on the merits; (3) the decision must have
all other actions or suits in the same or any other judicial tribunal of concurrent
been rendered by a court having jurisdiction over the subject matter and the
jurisdiction on the points and matters in issue in the first suit.18 To state simply,
parties; and (4) there must be, between the first and the second action,
a final judgment or decree on the merits by a court of competent jurisdiction is
identity of parties, of subject matter and of causes of action.22
conclusive of the rights of the parties or their privies in all later suits on all
points and matters determined in the former suit.19 In the case before us, the existence of and compliance with the first three
elements is undisputed. Likewise, there is no issue as to the identity of the
The principle of res judicata is applicable by way of: 1) "bar by prior judgment"
parties in the two actions for ejectment. Hence, the identity of subject matter
and 2) "conclusiveness of judgment." We have had occasion to explain the
and the identity of causes of action between the first and second ejectment
difference between these two aspects of res judicata as follows:
cases are the only remaining bones of contention in need of our final
There is "bar by prior judgment" when, as between the first case where the determination concerning the issue of res judicata.
judgment was rendered and the second case that is sought to be barred, there is
As to the subject matter, we find that there is no identity. The subject matter
identity of parties, subject matter, and causes of action. In this instance, the
of an action is "the matter or thing with respect to which the controversy has
judgment in the first case constitutes an absolute bar to the second action.
arisen, concerning which the wrong has been done, and this ordinarily is the
Otherwise put, the judgment or decree of the court of competent jurisdiction on
property, or the contract and its subject matter, or the thing in dispute."23 In
the merits concludes the litigation between the parties, as well as their privies,
an unlawful detainer case, the subject matter is the contract of lease between
and constitutes a bar to a new action or suit involving the same cause of action
the parties while the breach thereof constitutes the suit’s cause of action.24 In
before the same or other tribunal.
the present case, the lease contract subject of the controversy is verbal and on
But where there is identity of parties in the first and second cases, but no identity a monthly basis. In these instances, it is well settled that the lease is one with
of causes of action, the first judgment is conclusive only as to those matters a definite period which expires after the last day of any given thirty-day
actually and directly controverted and determined and not as to matters merely period.25 Following this reasoning, it becomes apparent that what exists
involved therein. This is the concept of res judicata known as "conclusiveness of between the parties is not just one continuous contract of lease, but a
judgment." Stated differently, any right, fact or matter in issue directly succession of lease contracts, each spanning a period of one month. Hence, to
adjudicated or necessarily involved in the determination of an action before a be accurate, each action for ejectment—each referring to a unique thirty-day
competent court in which judgment is rendered on the merits is conclusively period of occupation of respondents’ property by the petitioner—deals with a
separate and distinct lease contract corresponding to a separate and distinct bar to subsequent actions.29 In one case,30 we held that the failure of the
juridical relation between the parties. Considering, therefore, that the subject petitioner to secure an injunction to prevent the respondents from entering
matter of Civil Case No. 167142-CV is a different contract of lease from the the land and gathering nuts is not inconsistent with the petitioner’s being
subject matter of the instant case, it is obvious that there is no identity of subject adjudged the owner of the land. In another case,31 we found that affirmative
matter between the first ejectment suit and the ejectment suit subject of the relief in a subsequent action for specific performance and recovery of
present action. ownership and possession with damages against the petitioner would be
inconsistent with a prior judgment holding the same petitioner the owner of
Since there is no identity of subject matter between the two cases, it is but
the lot under litigation.
logical to conclude that there is likewise no identity of causes of action. A cause
of action is the act or omission by which a party violates the legal right of the Applying the same test to the case before us, we are convinced that a finding
other.26 Here, petitioner argues that there is but one single cause of action in in the instant case that the lease contract has already expired would not be
both ejectment suits as "the alleged acts of dispossession or unlawful inconsistent with the finding of lack of cause of action in the first ejectment
withholding of possessions were the same delict or wrong that were alleged and case. Petitioner asserts that the expiration of the lease contract is one of the
prayed for by the respondents in both complaints for ejectment."27 Petitioner is requisites of ejectment on the ground of "need of premises," and that
mistaken. In the first action for ejectment, respondents’ cause of action consists necessarily, the issue of expiration of the lease contract had already been
of petitioner’s continued possession of the premises in violation of respondents' disposed of in the first ejectment case. Accordingly, petitioner contends that a
legal rights under the provisions of the amended Rent Control Act, which rights decision in favor of respondents in the instant case would in effect be
were deemed included into the lease contract existing at the time of the filing of inconsistent with the decision rendered in the first ejectment case.
the case in May 2000.28 On the other hand, the cause of action in the second Petitioner’s contention is bereft of merit. We reiterate that the subject matter
suit only materialized when petitioner refused to vacate the premises despite of the first ejectment suit, on the one hand, and the subject matter of the
receipt of the notice of termination of lease sent by respondents on October 10, second ejectment suit, on the other, are two separate and distinct contracts of
2002 and the expiration of the 30-day grace period given him. From that lease. Given these facts, the issue of expiration of lease contract involved in
moment on, petitioner’s possession of the leased premises became unlawful and the first case is different and far removed from the issue of expiration of the
a new cause of action accrued. Hence, the cause of action in the present case for lease contract subject of the instant case. Logically, any ruling on the
ejectment only arose subsequent to the dismissal of the first ejectment suit dated expiration of lease contract in the earlier ejectment case will never be
January 9, 2002. Therefore, while the causes of action in the first and second conclusive on this subsequent case.
ejectment suits are similar in that both consist of unlawful possession by
Conceding, for the sake of argument, petitioner’s premise that the first and
petitioner, they are not identical. Each act of refusal to vacate by petitioner—one
second ejectment cases involve the same lease contract, petitioner's argument
in May 2000 and another in October 2002—breached separate and distinct lease
still does not hold water, but even serves to boost respondents’ case. It is to
contracts which consequently gave birth to separate and distinct causes of
be noted that by singling out the issue of the expiration of the lease contract,
action. Petitioner’s contention that there is but one single cause of action in the
petitioner invoked the application of res judicata in the concept of
two ejectment suits must perforce fail.
"conclusiveness of judgment." Well settled is the rule that where there is
We have previously employed various tests in determining whether or not there identity of parties in the first and second cases, but no identity of causes of
is identity of causes of action as to warrant the application of the principle of res action, the first judgment is conclusive only as to those matters actually and
judicata. One test of identity is the "absence of inconsistency test" where it is directly controverted and determined and not as to matters merely involved
determined whether the judgment sought will be inconsistent with the prior therein.32 In the first case for ejectment, it bears stressing that the dismissal
judgment. If no inconsistency is shown, the prior judgment shall not constitute a of the complaint only declared that the respondents failed to comply with the
requirements when the ground for ejectment is personal need of premises. subsequent demand and refusal of the tenant to vacate shall constitute a new
Notably, no express pronouncement can be found in the decision of the MeTC of cause of action.36
Manila, Branch 22 as to whether or not the lease contract subsisting between the
Finally, the circumstances of the case at bar are comparable to those in
parties had already expired. The decision therefore only directly attests to
Siapian v. Court of Appeals, which likewise involved a monthly verbal
respondents’ lack of cause of action when the ground for ejectment is personal
contract of lease. We disposed of the issue of identity of causes of action in
need of premises, and not to the particular issue of expiration of the contract of
the following manner:
lease subsisting between the parties. Hence, we cannot sustain petitioner’s
reliance on the doctrine of conclusiveness of judgment as regards the expiration The first ejectment case had for a cause of action based on the need for the
of the purportedly subsisting lease contract. premises. The second ejectment case involved a different cause of action, that
is, for non-payment of rentals up to February 1982. In the third case, the
The more common approach in ascertaining identity of causes of action is the
cause of action was the need for the premises and non-payment of rentals
"same evidence test," whereby the following question serves as a sufficient
from November 1987 up to May 1988. In this latest ejectment suit, the cause
criterion: "would the same evidence support and establish both the present and
of action is the non-payment of rentals from December 1987 accumulating to
former causes of action?"33 If the answer is in the affirmative, then the prior
P17,064.65. Clearly, the cause of action and the circumstances present in the
judgment is a bar to the subsequent action; conversely, it is not.
instant case are not the same but differ markedly from those in previous suits
In our view, a simple application of this test to the facts of the instant case cited. Reliance on the doctrine of res judicata by petitioner is sadly
readily reveals that the evidence necessary to obtain affirmative relief in the misplaced.37
present action for ejectment based on expiration of lease contract is not the same
We are not unaware of authorities that tend to widen rather than to restrict the
as that in the first ejectment case based on "need of premises." At this juncture,
doctrine of res judicata for the reason that public interest, as well as private
we again stress that there is no identity of subject matter between the previous
interest, demands an end to litigation as well as the protection of the
and present ejectment suits. This finding necessarily translates to the utter
individual from being vexed twice for the same cause.38 Indeed, to adhere
difference in the pieces of evidence necessary to prove the causes of action in
otherwise would "subject the public peace and quiet to the will and neglect of
the two actions.
individuals and prefer the gratification of the litigious disposition on the part
Aside from the "absence of inconsistency test" and "same evidence test," we of suitors to the preservation of the public tranquility and
have also ruled that a previous judgment operates as a bar to a subsequent one happiness."39 However, as in this case, we do not see how untempered
when it had "touched on [a] matter already decided,"34 or if the parties are in overzealousness can help work justice into a situation where an application
effect "litigating for the same thing."35 Under these tests, however, petitioner’s of the principle of res judicata is clearly not proper.
reliance on the applicability of the principle of res judicata is still for naught,
As to the issue of novation raised by petitioner, we are not persuaded by the
given that the two cases for ejectment do not share the same subject matter. We
latter’s theory that the acceptance of rental payments by respondents pending
have consistently held that a judgment in a previous case of ejectment could not
the final determination of the instant petition amounts to a novation of the
serve as a bar to a subsequent one if the latter is predicated on a new factual and
decision of the CA ordering petitioner to vacate the subject leased premises.
juridical situation. As a consequence, even in cases where the dismissal of a suit
In the first place, there is nothing to novate because as petitioner himself
brought for the ejectment of the lessee for nonpayment of rentals for a given
pounds on, the judgment to vacate has not yet become final. Furthermore, it
period becomes final and executory, the lessor is still not precluded from making
bears stressing that novation is never presumed, and the animus novandi,
a new demand upon the tenant to vacate should the latter again fail to pay the
whether totally or partially, must appear by express agreement of the parties,
rents due or should another ground for ejectment arise, in which case such
or by acts that are too clear and unequivocal to be mistaken.40 In the present
case, no intent to novate can be gleaned from the parties’ actuations as they
entered into the subsequent lease contracts with the qualification that the instant
petition is pending before this Court. Hence, the final outcome of the judgment
in this case will only operate as a resolutory condition to the existing contract
between the parties as regards the leased premises.

IN VIEW WHEREOF, the instant petition is DENIED. The decision of the Court
of Appeals is AFFIRMED.

SO ORDERED.