G.R. No. 213197 October 21, 2015
REMEGIO A. CHING, Petitioner vs. SAN PEDRO COLLEGE OF BUSINESS ADMINISTRATION, Respondent

FACTS

Petitioner Remegio A. Ching was an original incorporator, member, trustee, and treasurer of respondent San Pedro College of Business Administration (SPCBA), a non-stock corporation. On September 19, 2001, Remegio tendered his “irrevocable resignation.” SPCBA interpreted this as a resignation from all positions, including membership, and paid him P20,000,000 as a buy-out. Remegio later filed an intra-corporate case (SEC Case No. 86-2010-C) to inspect SPCBA’s corporate books, asserting his membership was not terminated. The Regional Trial Court (RTC) ruled in his favor, finding SPCBA failed to prove he ceased to be a member and ordering the corporation to allow inspection. SPCBA’s appeal was dismissed for taking the wrong mode, and the Supreme Court affirmed this dismissal, making the RTC decision final and executory on April 4, 2012.
Subsequently, on February 16, 2012, SPCBA’s Board of Trustees issued a resolution affirming/confirming Remegio’s prior removal as trustee, treasurer, and member, citing the P20,000,000 buy-out. Based on this resolution, SPCBA filed a new complaint (SEC Case No. 92-2012-C) seeking to declare Remegio validly removed and to prevent him from filing nuisance suits. Remegio raised the defense of res judicata, arguing his membership had already been conclusively settled in the first case. The RTC agreed, applying res judicata and striking off the part of the complaint concerning his removal. The Court of Appeals (CA) reversed, holding res judicata inapplicable because the February 16, 2012 Board Resolution constituted a new fact that arose after the first case, giving SPCBA a new cause of action under the Corporation Code for expulsion of a member.

ISSUE

Whether or not the Court of Appeals erred in not affirming the application by the RTC of the principle of res judicata in SEC Case No. 92-2012-C.

RULING

Yes, the Court of Appeals erred. The Supreme Court granted the petition and reinstated the RTC’s Omnibus Order, holding that res judicata, specifically “conclusiveness of judgment,” barred SPCBA from re-litigating the issue of Remegio’s membership.
The elements of conclusiveness of judgment are present: (1) the former judgment must be final; (2) it must have been rendered by a court having jurisdiction; (3) it must be a judgment on the merits; and (4) there must be identity of parties and identity of issues in the first and second cases. All elements were met. The RTC decision in SEC Case No. 86-2010-C was final and on the merits. The parties were identical. The pivotal issue of Remegio’s membership in SPCBA was directly involved and actually litigated in the first case, where the RTC definitively ruled he remained a member as SPCBA failed to prove his cessation under the articles or by-laws. The Court rejected the CA’s reasoning that the February 16, 2012 Board Resolution was a supervening event. The resolution merely “affirmed or confirmed” a removal allegedly based on the same P20,000,000 payment that was already presented and rejected as evidence in the first case. Since the factual basis (the buy-out) existed prior to the first judgment, SPCBA could not use a subsequent board resolution confirming that same fact to circumvent the final ruling. The cause of action in the second case was therefore identical to that in the first—the determination of Remegio’s membership status—which had already been conclusively settled.