RES JUDICATA: BAR BY PRIOR JUDGMENT

Under the rule of res judicata, a final judgment or decree on the merits by a court of competent jurisdiction is conclusive of the rights of the parties or their privies, in all later suits and on all points and matters determined in the previous suit. The term literally means a "matter adjudged, judicially acted upon, or settled by judgment (Dela Cruz v. Joaquin, G.R. No. 162788, July 28, 2005, 464 SCRA 576, 589).  The principle bars a subsequent suit involving the same parties, subject matter, and cause of action. The rationale for the rule is that "public policy requires that controversies must be settled with finality at a given point in time.

The doctrine of res judicata embraces two (2) concepts: the first is "bar by prior judgment" under paragraph (b) of Rule 39, Section 47 of the Rules of Court, and the second is "conclusiveness of judgment" under paragraph (c) thereof.

Res judicata applies in the concept of "bar by prior judgment" if the following requisites concur: (1) the former judgment or order must be final; (2) the judgment or order must be on the merits; (3) the decision must have been rendered by a court having jurisdiction over the subject matter and the parties; and (4) there must be, between the first and the second action, identity of parties, of subject matter and of causes of action. (Superior Commercial Enterprises, Inc. v. Kunnan Enterprises Ltd., et al., G.R. 169974, April 20, 2010 cited in SPOUSES ERNESTO and VICENTA TOPACIO vs. BANCO FILIPINO SAVINGS and MORTGAGE BANK, G.R. No. 157644, November 17, 2010, BRION J.).