The sole issue on which this Court granted leave to appeal is whether a voluntary dismissal with prejudice of a prior suit which failed to state a cause of action under state law precludes, under the doctrine of res judicata and/ or GCR 1963, 203.1, a plaintiff from bringing a second suit based on an alleged violation of the Federal Truth-in-Lending Act.
We find that plaintiff is not so precluded.
I. Facts
In 1972, plaintiff deeded her home to Louis Tibolla as security in connection with an agree*614ment by Tibolla to repair plaintiffs home after a fire. The conveyance itself was intended as a down payment of $5,500 on the total cost of repairs said to be $17,100. The balance of the amount due for the repairs was to be paid by plaintiff under a land contract to repurchase. The land contract had a clause authorizing Tibplla to mortgage the premises.
In September, 1972, Tibolla granted a mortgage to defendant Colonial Federal Savings and Loan Association of Grosse Pointe Woods (hereinafter Colonial), gave a personal note as well as a security interest in the property, and received from Colonial $15,000.
Later in 1972 plaintiff filed her initial lawsuit against Tibolla alleging that he had breached his contract of repair, committed fraud, used secondhand materials, made shoddy repairs and failéd to apply half the proceeds of the land contract to pay off the mortgage. By amended complaint, plaintiff joined Colonial as a party and sought rescission of the mortgage , between Tibolla and Colonial. Colonial denied that it was a party to any wrongful conduct and, at pretrial conference, January 8, 1975, plaintiffs attorney in the first case agreed to a dismissal of Colonial with prejudice. At the same time a default judgment was entered against Tibolla for the full amount of plaintiffs claim, $17,100, together with costs, interest and attorney’s fees.
Nine days later plaintiff filed the instant suit against Colonial, seeking rescission of the mortgage based on a claim that violation of the Federal Truth-in-Lending Act, 15 USC 1635,1 gave plaintiff *615a right to rescission. Colonial moved for and received an accelerated judgment on the basis of res judicata and election of remedies.
Appeal was taken by plaintiff to the Court of Appeals which affirmed by memorandum opinion of June 22, 1976. Plaintiff filed an application for leave to appeal to this Court and leave was granted March 7, 1977.
II. Res Judicata
Res judicata is a manifestation of the recognition that endless litigation leads to vexation, confusion and chaos for the litigants, and inefficient use of judicial time. See generally 46 Am Jur 2d, Judgments, § 395, p 559. The scope of res judicata has been framed in this jurisdiction in two distinct manners, one of which is literal and narrow and the other of which is broad. The former literal statement of the rule appears in the case of Clements v Constantine, 344 Mich 446; 73 NW2d 889 (1955). In that case the scope of the doctrine was set forth as follows:
" 'The first essential of the rule of res judicata is the identity of the matter in issue. The "matter in issue” is defined to be "that matter upon which the plaintiff *616proceeds by his action, and which the defendant controverts by his pleadings.” See Chand, Res Judicata, p 35. If the same subject matter comes in question in. a second action in a court of last resort, it is bound by its own former decision. Bigelow on Estoppel (1st ed), p 16.
" ' "A matter or question, either of law or fact, is res judicata, or set at rest, as to adverse parties and their respective privies, if it was a material issue in the proceeding, directly involved, and not merely incidentally cognizable nor collaterally in question, and was adjudicated after a contest, by a final judgment on the merits1 Van Fleet, Res Judicata, p 2.’” Clements, supra, 453-454. (Emphasis added.)
Literally res judicata means "[a] matter adjudged” and is further defined by Black’s Law Dictionary (4th ed) as a "[rjule that final judgment or decree on merits * * * is conclusive of rights of parties or their privies in all later suits on points and matters determined in former suit” (emphasis added). What clearly stands out in these definitions is that issues not litigated in a former suit are not res judicata.
However, the rule has also been framed more broadly. An example of this more inclusive statement of the doctrine can be found in three cases which deal with the res judicata of prior consent judgments, Gursten v Kenney, 375 Mich 330; 134 NW2d 764 (1965); Shank v Castle, 357 Mich 290, 295; 98 NW2d 579 (1959); Prawdzik v Heidema Brothers, Inc, 352 Mich 102; 89 NW2d 523 (1958). In Gursten the rule was stated in dicta as follows,
" ' "The plea of res judicata applies, except in special cases, not only to points upon which the court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have *617brought forward at the time.” ’ ” Gursten, p 335.2 (Emphasis added.)
Whatever the correct scope of the rule, its main purpose is to insure finality in a cause of action. Plaintiff asserts that the cause of action she presently sues upon is different, separate and distinct from that in the prior suit, thereby precluding application of res judicata, and even if this were not the case, her second suit is saved by virtue of the waiver provision of GCR 203.1.
Because we find this case controlled by GCR 203.1, and because there was no objection as discussed in the last sentence of that rule, we need not decide whether plaintiff’s second suit should have been part of her first suit under Michigan’s rather broad definition of "cause of action”,3 or the broad definition of res judicata.
GCR 203.1 reads as follows:
"A complaint shall state as a claim every claim *618either legal or equitable which at the time of serving the pleading the pleader has against any opposing party, if it arises out of the transaction or occurrence that is the subject-matter of the action and does not require for its adjudication the presence of third parties of whom the court cannot acquire jurisdiction. Failure by motion or at the pretrial conference to object to improper joinder of claims or to a failure to join claims required to be joined constitutes a waiver of the required joinder rules and the judgment shall not merge more than the claims actually litigated.” (Emphasis added.)
The first sentence of the above court rule codifies Michigan’s longstanding decisional rule against splitting a cause of action. That decisional rule is grounded on the same general policy considerations as the doctrine of res judicata and, to the extent the rule encompasses or mitigates res judicata, it must control.4
III. GCR 203.1
In examining the instant case under GCR 203.1, the matter which must be decided by this Court is the impact, if any, of the waiver provision found in the second sentence of the rule. A Court of Ap*619peals opinion which previously considered the rule is instructive.
In Malesev v Garavaglia, 12 Mich App 282; 162 NW2d 844 (1968), Justice Thomas Giles Kavanagh, then Presiding Judge of the Court of Appeals, was faced with a case similar to the instant one. Plaintiffs had initially brought a tort action to recover property damage suffered during defendants’ construction of a drain water intake system pursuant to a contract with the Wayne County Board of Road Commissioners. Defendants were awarded an accelerated judgment based on plaintiffs’ failure to comply with the three-year statute of limitations governing personal injury or property damage claims. Less than two months later the plaintiffs brought a second, separate action against the same defendants claiming they were third-party beneficiaries under the contract between the road commission and defendants and that defendants had breached that contract. Unlike their initial suit, plaintiffs’ second suit sounding in contract was subject to a six-year rather than three-year statute of limitations.
Defendants were granted an accelerated judgment in the second suit based on res judicafa, On appeal, then Presiding Judge Kavanagh correctly found the application of res judicata to be erroneous, given the circumstance that plaintiffs had not received an adjudication on the merits of any portion of their claim.5 Further, in light of GCR 203.1, he found that plaintiffs’ second suit was not barred despite the fact that they should properly have joined a separate claim for breach of contract in conjunction with the original suit. This was so because "defendant made no objection at that time *620for failure to join all actions, consequently nothing bars the bringing of [plaintiffs’] separate action now. (GCR 1963, 203.1)”. Malesev, supra, 285. See also Roberts v Duddles, 47 Mich App 601, 604; 209 NW2d 720 (1973).6
We find that the rule was interpreted and applied in the only logical manner by then Presiding Judge Kavanagh in Malesev. As quoted above, the language of the rule specifically states that "failure * * * to object * * * to a failure to join claims required to be joined constitutes a waiver of the required joinder rules”. This language is clear. Its obvious impact is that waiver by the defendant precludes later assertion of the waived defense during a subsequent suit.7
While at first glance the court rule’s waiver provision may appear to create a vast change in *621this area of law, we note that further reflection persuades us otherwise. The defenses of merger and bar have always been waivable by a defendant. The only innovative aspect of the rule’s waiver provision is that a defendant must now assert his or her objection during the first suit when there exists an opportunity for plaintiff to cure the nonjoinder defect. In substance, the harshness of the prior rule is merely mitigated by the new requirement of timely motion. 1 Honigman & Hawkins, Michigan Court Rules Annotated (2d ed), Committee Notes, Rule 203, p 472 and Authors’ Comments, pp 474-475 to Rule 203.
IV. "Merger”/”Bar” and GCR 203.1
Justice Ryan’s opinion, in its interpretation of the instant case, would limit the scope of GCR 203.1 to cases falling within the technical limits of "merger”,8 on the ground that the rule makes specific reference to "merger” without similar specific reference to "bar”.
Under such an interpretation, if a plaintiff had won a prior suit during which a defendant had failed to object to plaintiff’s nonjoinder, GCR 203.1 would operate to allow the maintenance of a second suit because the defense of "merger” would have been waived. If a plaintiff had lost the prior suit, as occurred herein, however, under Justice Ryan’s interpretation GCR 203.1 would be inapplicable despite a defendant’s similar failure to object. This inconsistent result would obtain because *622a defendant could waive assertion of the defense of "merger” but could not waive assertion of the defense of "bar” under his reading of the rule, although in fact both actions were almost identical. We cannot agree that the rule can be interpreted in this manner for a number of reasons.
First, Justice Ryan’s interpretation would mean that Malesev, which we believe correctly interpreted and applied GCR 203.1, was incorrectly decided. In Malesev, the plaintiff was unsuccessful in his first suit, but then Judge Kavanagh found that plaintiff could maintain a second suit because the waiver provision of GCR 203.1 precluded defendant’s assertion of bar.
Second, we note that the concepts of merger and bar are almost identical despite their technical distinction.9 In fact the terms "merger” and "bar” are often used interchangeably to convey the same meaning. In specific reference to the waiver provision of GCR 203.1, an example of this interchangeability in common usage can be found in Wayne Circuit Judge Horace W. Gilmore’s oft-cited treatise, Michigan Civil Procedure Before Trial. The treatise states in § 8.103,
"failure * * * to object to * * * failure to join claims required to be joined, constitutes a waiver of the required joinder, and the judgment does not merge more than the claims actually litigated.” (Emphasis added.)
In the very next section, § 8.104, the treatise states,
"[a]s pointed out in the previous section, §8.103, failure to object to the nonjoinder of mandatory claims *623means that the action does not bar a subsequent suit on that unjoined claim.”10 (Emphasis added.)
The fact that the terms are frequently not distinguished in common usage is further demonstrated by the fact that this limited interpretation of the waiver provision solely to those cases falling within the technical definition of merger has not arisen in prior Court of Appeals cases examining GCR 203.1.11
Third, even if merger is given its technical meaning, we do not find the language discussing merger to control that which precedes it. The second sentence of GCR 203.1 contains two clauses. The first states, "failure * * * to object * * * constitutes a waiver of the required joinder rules”. This clause unequivocally waives all joinders, whether plaintiff won or lost. So the technical difference between "merger” and "bar” does not come into play at all. We hold this clause is absolute and controlling. The second clause states "* * * and the judgment shall not merge more than the claims actually litigated”. We find the language in the second clause subordinate to the language contained in the first clause and hold that the term "merge” in the second clause is used in its more general sense. Waiver of the joinder rules necessarily includes waiver of the defense of "bar”.
*624This reasoning is substantiated by the Committee Notes discussing the "harshness” the waiver provision is meant to mitigate: "[t]he harshness of the present practice as it relates to the enforcement of compulsory joinder provisions * * * is the fact it almost always is enforced after the fact, through the doctrine of merger and res judicata” (emphasis added). Res judicata includes both the doctrines of merger and bar. James, Civil Procedure (Little, Brown & Company, 1965), p 549.
Further, and perhaps of greatest significance, to apply the GCR 203.1 waiver provision solely to merger and not to bar does not make sense in light of a primary purpose of the waiver provision. That purpose is to encourage a defendant to assert, by motion, an objection to plaintiff’s nonjoinder in the first suit when the defect can be cured.12 *625At this point it could not be known whether plaintiff would win or lose.
The introduction of fairness and certainty into this area of litigation is the obvious beneficial impact intended by the rule in requiring assertion in the first suit. For example, if a plaintiff initially fails to join all claims and there is no objection made by defendant to this defect, then all parties are on express notice that plaintiff may later institute suit on matters not actually litigated therein. Conversely, if plaintiff fails to join all claims and defendant does object, all parties know that plaintiff will be precluded from suing again absent an amendment in plaintiff’s complaint joining those additional claims. Hence, as stated in the Committee Notes and Authors’ Comments, the unfairness or harshness of the joinder rule is mitigated by bringing the matter to the fore in the original suit when the nonjoinder defect can be cured.
Clearly, if the waiver provision were solely applied to cases which, once litigated, come within the technical definition of "merger”, there could be no certainty until plaintiff’s success was determined; that very certainty sought to be realized by the rule during the original suit would be frustrated.13 We cannot and do not find that this rule drafted to effectuate fairness and certainty during an original action, can be interpreted to render *626the matter uncertain until after finality of the original action.
Finally, the unreasonableness of interpreting the waiver provision as restricted only to cases falling within the technical definition of "merger” is further supported by the fact that we cannot logically find that the provision was intended to avoid harshness only with respect to the successful plaintiff. If a choice had been undertaken by the rule — and we do not find that one was — it would appear to us far more logical to assist the plaintiff suffering most significantly by the harshness of the traditional compulsory joinder requirement, i.e., the plaintiff who has been unsuccessful and therefore recovered nothing from the defendant as a result of the original suit.
For the above reasons we cannot conclude that the GCR 203.1 waiver provision applies only to cases falling within the technical scope of merger and therefore only in favor of previously successful plaintiffs. We find the waiver provision to mean what it says — a defendant who fails to object to a plaintiffs nonjoinder waives the use of the defense in a subsequent suit based on additional claims.
V. Conclusion
Consistent with the purpose and language of the rule, we find that defendant has waived the right to preclude the instant suit as a result of its failure to make timely objection in the original suit. Accordingly, we reverse and remand for trial on plaintiffs Federal Truth-in-Lending claim.
Costs to appellant.
Levin and Blair Moody, Jr., JJ., concurred with Williams, J.The Federal statute affords a right to rescind security transactions involving real estate and places an affirmative duty to disclose on the creditor. The act reads in part:
"Except as otherwise provided in this section, in the case of any *615consumer credit transaction in which a security interest ** * * is * * * retained or acquired in any real property which is used or is expected to be used as the residence of the person to whom credit is extended, the obligor shall have the right to rescind the transaction until midnight of the third business day following the consummation of the transaction or the delivery of the disclosures required under this section and all other material disclosures required under this part, whichever is later, by notifying the creditor, in accordance with regulations of the Board, of his intention to do so. The creditor shall clearly and conspicuously disclose, in accordance with regulations of the Board, to any obligor in a transaction subject to this section the rights of the obligor under this section. The creditor shall also provide, in accordance with regulations of the Board, an adequate opportunity to the obligor to exercise his right to rescind any transaction subject to this section.”
Factually, the matter attempted to be raised in the second trial in Gursten had been raised and pursued by the litigants in the first trial so the consent judgment would have been res judicata under either the narrow or broad statement of the rule, and the holding of the case was that plaintiff "elected to pursue the matter before the referee in bankruptcy [in the first case]. Having made that choice, he was under obligation to pursue it [by appeal] or abide by an adverse result”, Gursten, p 335. Despite this, the Court attempted to deal with the inconsistency of the two above statements of the rule by distinguishing three older cases which had employed the narrower doctrine of res judicata (Detroit Trust Co v Furbeck, 324 Mich 401; 37 NW2d 151 [1949]; Meister v Dillon, 324 Mich 389; 37 NW2d 146 [1949]; MacKenzie v Union Guardian Trust Co, 262 Mich 563; 247 NW 914 [1933]).
The Gursten opinion distinguished the three older cases by finding that the matters raised in the second suits in those cases did not properly belong in the original suits or did not have to be raised at the time of the original suits and went on to find the broader rule preferred.
See 1 Honigman & Hawkins, Michigan Court Rules Annotated (2d ed), Authors’ Comments, Rule 203, p 474, citing the Committee Comments to that Rule 203.1 and 1 Michigan Law & Practice, Action §§ 22-25, pp 132-140.
GCR 203.1 has no impact on the narrow rule of res judicata, i.e., matters actually litigated. See 1 Honigman & Hawkins, Michigan Court Rules Annotated, Rule 203, Authors’ Comments, p 476 in which it is stated "* * * sub-rule 203.1 modifies * * * res judicata, by providing that omitted claims relating to the original cause of action may be asserted later, if there was no objection to the failure to join them in the first action.
"The rule has no effect, however, on the application of res judicata to the claims actually litigated in the original action.” (Emphasis added.)
Of additional interest is the fact that, as stated in the Committee Notes to the rule, it is meant to have no impact on the doctrine of collateral estoppel. 1 Honigman & Hawkins, Michigan Court Rules Annotated, Rule 203, Committee Notes, p 473.
An accelerated judgment based on the three-year statute of limitations is not an adjudication on the merits of a cause of action. See Nordman v Earle Equipment Co, 352 Mich 342; 89 NW2d 594 (1958).
In Purification Systems, Inc v The Mastan Co, Inc, 40 Mich App 308; 198 NW2d 807 (1972), another panel of the Court of Appeals discussed the waiver provision of GCR 203.1. The Court of Appeals affirmed a trial court’s holding based on res judicata because it found that the facts to be proven in a second suit were the same as those litigated in the first. That court went on to discuss GCR 203.1 and noted that defendant had not made an objection under the rule. In apparent dicta, the panel adopted a balancing approach to application of the rule.
We disagree with the Court of Appeals findings in Purification Systems as to both res judicata and GCR 203.1, and that case is hereby overruled. See criticism of the case in 57 Mich St Bar J 842-843 (Oct, 1978).
Colonial argues in this Court that,
"[t]he proper interpretation of GCR 1963, 203.1 is that claims omitted from the original suit may be asserted later if there was no objection to the failure to join them in the first action and if they do not arise out of the same transaction or occurrence involved in the first action” (emphasis in original).
The plain language of GCR 203.1 requires joinder of "every claim * * * if n arises out of the transaction or occurrence that is the subject-matter of the action” (emphasis added). In other words, it is a compulsory joinder provision for claims arising out of the same transaction. The second sentence containing the waiver provision requires objection to failure to join that which should be joined under the rule, i.e., matters arising out of the same transaction or occurrence. Colonial’s contention is contrary to the very language of the rule.
Technically, merger occurs only when a prior judgment has been rendered in favor of a plaintiff; plaintiff's cause of action is merged if he or she wins. Bar, on the other hand, technically occurs when the plaintiff has been unsuccessful in the prior action; plaintiff’s cause of action is barred if he or she lost. Under either doctrine, of course, plaintiff could not maintain a second suit based on the same cause of action.
This is not to say that it is incorrect to usually interpret language employed in a statute or court rule under its technical meaning. Within the context of GCR 203.1, we find such a restrictive reading to be inappropriate.
This common interchangeable usage is further demonstrated by the fact that following the above quotation in the Gilmore Treatise, a hypothetical factual situation is inserted to illustrate the impact of the waiver provision as it would affect two separate suits. The hypothetical does not indicate whether plaintiff was successful or unsuccessful in the first suit, but does indicate that the second suit is authorized because of defendant’s failure to object during the first suit.
While litigants normally assert any plausible (and some not so plausible) arguments beneficial to their case, this limited interpretation has also not been raised by the parties herein.
1 Honigman & Hawkins, Michigan Court Rules Annotated (2d ed), Committee Notes, Rule 203, p 472, states,
"Sub-rule 203.1 deals only with compulsory joinder of claims between those already parties to the action.
"The strictness of the compulsory joinder provision of sub-rule 203.1 and its all inclusive character is mitigated in a sensible way by its last sentence and by the provisions of Rule 301 requiring the pre-trial conference judge to inquire as to whether or not all claims required to be joined are joined. The harshness of the present practice as it relates to the enforcement of compulsory joinder provisions (this is sometimes referred to as the rule against splitting causes of actions) is the fact it almost always is enforced after the fact, through the doctrine of merger or res judicata. In other words, at the present time the question of whether or not all of a cause of action has been sued upon is seldom, if ever, challenged in the original suit when the defect might have been corrected. Normally, the challenge comes in a response to another suit alleging splitting or merger. At this late stage of the proceedings, no matter how innocent the parties were, there is no way to correct the matter and the party loses his chance to litigate the rest of his claim." (Emphasis added.)
The Authors’ Comments at p 475 states,
"An unfortunate aspect of the rule against splitting a cause of action was that it was almost always enforced after the fact. The question of whether all required matters had been joined was seldom raised in connection with the first action, when something could have been done about it. Rather, it was raised as a defense of res judicata *625to a second action attempting to present the related but previously unlitigated matters, and the penalty was that matters which should have been joined before were now forever lost.”
The defendant, aware that all claims had not been joined (whether the failure to join by plaintiff was intentional, or more likely a result of ignorance or mistake as probably occurred in the instant case) would be encouraged to engage in guesswork as to the likelihood of plaintiffs success on the limited points raised in the first suit, rather than being encouraged to make the objection as soon as he or she was aware of plaintiffs nonjoinder.