Facts: Respondent Gilbert dela Llana entered into an undated contract of lease with Robert de

Leon and Gilbert de Leon for a 541 square-meter property intended for us as a lottery outlet. The
contract had a term of 5 years and contained a stipulation that any case arising from such shall
be filed in the Courts of Davao City only.
The case started when respondent filed a complaint of unlawful detainer before the 3 rd Municipal
Circuit Trial Court of Nabunturan-Mawab, Compostella Valley province against Robert and Gilbert
de Leon. Gilbert claimed that Robert and Gil failed to pay their rental arrears and refused to
vacate the said property despite repeated demands. In their defense, Robert and Gil claimed that
the lease was simulated and not binding on the parties.
MTCC-NabunturanMawab dismissed the first ejectment complaint on the premise that the lease
contract was a relatively simulated contract and non-binding. And opined that granting arguendo
that the lease contract is not simulated, the dismissal was still in order on the ground of improper
venue given that the parties expressly agreed that any case arising from the same shall be
brought before the courts of Davao City only. And on August 8, 2006, an entry of final judgment
was issued that the January 24, 2006 decision of the MCTC-Nabunturan-Mawab had already
become final and executor on March 20, 2006.
Despite the decision Gilbert together with his spouse Analyn filed a second complaint for
unlawful detainer, damages and attorneys fees against Robert and his wife Nenita before the
MTCC-Davao City. Petitioners in their answer raised the defense of res judicata that the second
complaint should be dismissed since it was already barred by prior judgment. MTCC-Davao City
found that the contract was not a simulated contract of lease. Petitioners aggrieved appealed to
the RTC.
The RTC reversed and aside the MTCC-Davao City ruling and ordered dismissal of the second
ejectment complaint because of improper venue. It held that the Municipal Trial Court of
Nabunturan, Compostella Valley Province is the right venue for the said case. Respondents
elevated their case to the Court of Appeals. The CA reversed and set aside the RTCs decision
and reinstated MTCC-Davao Citys decision. Unconvinced, petitioners filed a motion for
reconsideration which the CA denied, hence, this petition.
Issue: Whether or not the principle of res judicata applies. Whether the second ejectment
complaint was barred by prior judgment.
Ruling of the Court:
The court rules that res judicata in the concept of bar by prior judgment applies in this
case.
Res judicata a principle of law which precludes parties from re-litigating issues actually
litigated and determined by a prior and final judgment. There is a bar by prior judgment where
there is identity of parties, subject matter, and causes of action between the first case where the
judgment was rendered and the second case that is sought to be barred.
In the MCTC-Nabunturan- Mawab decision, the first ejectment complaint was dismissed as
the undated lease contract entered into was relatively simulated and supposedly non-binding on
the parties. The pronouncement made was in reference to the cause of action raised in the
ejectment complaint. To find that the said contract was simulated, negates the cause of action
raised, hence resulting in dismissal. Furthermore, the decision attained finality on March 20,
2006 as per entry of final judgment.
The complaint filed before the MTCC Davao City against the same party, same subject
matter and the same cause of action. With these it clearly shows that the final and executor
judgment in the first case had already barred the resolution of the second case.
Wherefore the petition is granted. The decision dated July 30, 2013 and the resolution
dated March 31, 2014 of the Court of Appeals are hereby reversed and set aside. The ejectment
complaint of respondents-spouses before the MTCC-Davao City, Branch 2 is dismissed without
prejudice as aforementioned.