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11/26/2017 SUPREME COURT REPORTS ANNOTATED VOLUME 197 11/26/2017 SUPREME COURT REPORTS ANNOTATED VOLUME 197

parties, subjectmatter and cause of action, the judgment on the


merits in the first case constitutes an

________________

* EN BANC.

VOL. 197, MAY 20, 1991 201


Smith Bell and Company (Phils.), Inc. vs. Court of Appeals 202

*
G.R. No. 56294. May 20, 1991.

SMITH BELL AND COMPANY (PHILIPPINES), INC. and 202 SUPREME COURT REPORTS ANNOTATED
TOKYO MARINE AND FIRE INSURANCE CO., INC., Smith Bell and Company (Phils.), Inc. vs. Court of Appeals
petitioners, vs. THE COURT OF APPEALS and CARLOS
A. GO THONG AND CO., respondents.
absolute bar to the subsequent action not only as to every matter
which was offered and received to sustain or defeat the claim or
Judgments; Res Judicata; The Supreme Court has discretion demand, but also as to any other admissible matter which might
to decide whether a minute resolution should be used in lieu of a have been offered for that purpose and to all matters that could
fullblown decision in any particular case, and that a minute have been adjudged in that case. This is designated as bar by
resolution of dismissal of a Petition for Review on Certiorari former judgment. But where the second action between the same
constitutes an adjudication on the merits of the controversy or parties is upon a different claim or demand, the judgment in the
subject matter of the Petition.Private respondents argument prior action operates as an estoppel only as to those matters in
must be rejected. That this Court denied Go Thongs Petition for issue or points controverted, upon the determination of which the
Review in a minute Resolution did not in any way diminish the finding or judgment was rendered. In fine, the previous judgment
legal significance of the denial so decreed by this Court. The is conclusive in the second case, only as those matters actually
Supreme Court is not compelled to adopt a definite and stringent and directly controverted and determined and not as to matters
rule on how its judgment shall be framed. It has long been settled merely involved therein. This is the rule on conclusiveness of
that this Court has discretion to decide whether a minute judgment embodied in subdivision (c) of Section 49 of Rule 39 of
resolution should be used in lieu of a fullblown decision in any the Revised Rules of Court.(Citations omitted) (Emphases
particular case and that a minute Resolution of dismissal of a supplied) In Lopez v. Reyes, the Court elaborated further the
Petition for Review on Certiorari constitutes an adjudication on distinction between bar by former judgment which bars the
the merits of the controversy or subject matter of the Petition. It prosecution of a second action upon the same claim, demand or
has been stressed by the Court that the grant of due course to a cause of action, and conclusiveness of judgment which bars the
Petition for Review is not a matter of right, but of sound judicial relitigation of particular facts or issues in another litigation
discretion; and so there is no need to fully explain the Courts between the same parties on a different claim or cause of action:
denial. For one thing, the facts and law are already mentioned in The doctrine of res judicata has two aspects. The first is the
the Court of Appeals opinion. A minute Resolution denying a effect of a judgment as a bar to the prosecution of a second action
Petition for Review of a Decision of the Court of Appeals can only upon the same claim, demand or cause of action. The second
mean that the Supreme Court agrees with or adopts the findings aspect is that it precludes the relitigation of a particular fact or
and conclusions of the Court of Appeals, in other words, that the issues in another action between the same parties on a different
Decision sought to be reviewed and set aside is correct. claim or cause of action. The general rule precluding the
Same; Same; The principle of res judicata embraces two relitigation of material facts or questions which were in issue and
concepts i.e. bar by former judgment and conclusiveness of adjudicated in former action are commonly applied to all matters
judgment.In Tingson v. Court of Appeals, the Court essentially connected with the subject matter of the litigation.
distinguished one from the other the two (2) concepts embraced in Thus, it extends to questions necessarily involved in an issue, and
the principle of res judicata, i.e., bar by former judgment and necessarily adjudicated, or necessarily implied in the final
conclusiveness of judgment: There is no question that where as judgment, although no specific finding may have been made in
between the first case where the judgment is rendered and the reference thereto, and although such matters were directly
second case where such judgment is invoked, there is identity of referred to in the pleadings and were not actually or formally
presented. Under this rule, if the record of the former trial shows
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11/26/2017 SUPREME COURT REPORTS ANNOTATED VOLUME 197 11/26/2017 SUPREME COURT REPORTS ANNOTATED VOLUME 197

that the judgment could not have been rendered without deciding one who has been trained as such and who is given no other duty
the particular matter, it will be considered as having settled that save to act as a lookout and who is stationed where he can see
matter as to all future actions between the parties, and if a and hear best and maintain good communication with the officer
judgment necessarily presupposes certain premises, they are as in charge of the vessel, and who must, of course, be vigilant.
conclusive as the judgment itself. Reasons for the rule are that a Judge Cuevas wrote: The lookout should have no other duty to
judgment is an adjudication on all the matters which are essential perform. (Chamberlain v. Ward, 21, N.O.W. 62, U.S. 548, 571). He
to support it, and that every proposition assumed or decided by the has only one duty, that which its name impliesto keep a look
court leading up to the final conclusion and upon which such out. So a deckhand who has other duties, is not a proper lookout
conclusion is based is as effectually passed upon as the ultimate (Brooklyn Perry Co. v. U.S., 122, Fed. 696). The navigating officer
question which is finally solved. (Citations omitted) (Emphases is not a sufficient lookout (Larcen B. Myrtle, 44 Fed. 779)
supplied) Griffin on Collision, pages 277278). Neither the captain nor the
[helmsman] in the pilothouse can be considered to be a lookout
203 within the meaning of the maritime law. Nor should he be
stationed in the bridge. H e should

VOL. 197, MAY 20, 1991 203 204

Smith Bell and Company (Phils.), Inc. vs. Court of Appeals

Compromise Agreements; An offer to compromise does not, in 204 SUPREME COURT REPORTS ANNOTATED
legal contemplation, involve an admission on the part of the
defendant that he is legally liable, nor, on the part of plaintiff that Smith Bell and Company (Phils.), Inc. vs. Court of Appeals
his claim or demand is groundless or even doubtful.The familiar
rule is that an offer of compromise is not an admission that be as near as practicable to the surface of the water so as to be
anything is due, and is not admissible in evidence against the able to see lowlying lights (Griffin on Collision, page 273). On the
person making the offer. A compromise is an agreement between strength of the foregoing authorities, which do not appear to be
two (2) or more persons who, in order to forestall or put an end to disputed even by the defendant, it is hardly probable that neither
a law suit, adjust their differences by mutual consent, an German or Leo Enriquez may qualify as lookout in the real
adjustment which everyone of them prefers to the hope of gaining sense of the word. (Emphases supplied) In the case at bar, the
more, balanced by the danger of losing more. An offer to failure of the Don Carlos to recognize in a timely manner the
compromise does not, in legal contemplation, involve an risk of collision with the Yotai Maru coming in from the opposite
admission on the part of a defendant that he is legally liable, nor direction, was at least in part due to the failure of the Don
on the part of a plaintiff that his claim or demand is groundless or Carlos to maintain a proper lookout.
even doubtful, since the compromise is arrived at precisely with a
view to avoiding further controversy and saving the expenses of PETITION for certiorari to review the decision of the Court
litigation. It is of the very nature of an offer of compromise that it of Appeals.
is made tentatively, hypothetically and in contemplation of
mutual concessions. The above rule on compromises is anchored The facts are stated in the opinion of the Court.
on public policy of the most insistent and basic kind; that the Bito, Misa & Lozada for petitioners.
incidence of litigation should be reduced and its duration Rodriguez, Relova & Associates for private
shortened to the maximum extent feasible. respondent.

Transportation; Admiralty; The failure of the Don Carlos to FELICIANO, J.:


have on board, on the night of the collision, a proper lookout
constitutes negligence.The second circumstance constitutive of In the early morning of 3 May 1970at exactly 0350 hours,
negligence on the part of the Don Carlos was its failure to have on the approaches to the port of Manila near Caballo
on board that night a proper lookout as required by Rule I (B). Island, a collision took place between the M/V Don
Under Rule 29 of the same set of Rules, all consequences arising Carlos, an interisland vessel owned and operated by
from the failure of the Don Carlos to keep a proper lookout private respondent Carlos A. Go Thong and Company (Go
must be borne by the Don Carlos. Judge Cuevas summary of Thong), and the M/S Yotai Maru, a merchant vessel of
the evidence said: The evidence on record likewise discloses very Japanese registry. The Don Carlos was then sailing south
convincingly that Don Carlos did not have a lookout whose sole bound leaving the port of Manila for Cebu, while the Yotai
and only duty is only to act as such. x x x A proper lookout is Maru was approaching the port of Manila, coming in from
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