G.R. No.
L-2464 May 18, 1951 that the kidnapping was made upon the request of Gunda and Faustino
THE PEOPLE OF THE PHILIPPINES, plaintiff-appelle,
vs.
SANTIAGO AGUILA, defendant-appellant.
Santiago Aguila, Elias Aguila, and several others were accused before
the Justice of the Peace court of Tiaong, Quezon Province, the crime of
kidnapping for ransom and serious illegal detention committed against
Arsenio Gunda and Fausto Aguila. The justice of the Peace, finding
probable cause, forwarded the case to the Court of First Instance of
Quezon Province, where two separate informations were filed, one
against Elias Aguila, and the other against Santiago Aguila and Jorge
Rosales, for said crime. Inasmuch as the other defendants were still at
large, they were not included in the informations. The two cases, being
intimately related, were tried together. After the prosecution had rested,
the court, on motion, dismissed the case against Jorge Rosales for
insufficiency of evidence. Elias and Santiago presented their evidence.
After the trial, each of these two was sentenced under Article 267 of the
Revised Penal Code to reclusion perpetua, with the accessory penalties
of the law, and to pay the costs. Both appealed. As the appeal of Elias
Aguila in a separate case has already been dispossed of, we shall
proceed with the appeal of Santiago Aguila.
From the evidence introduced by the prosecution, the following facts are
established:
Arsenio Escudero is the owner of a charcoal factory known as
bonobusan at the place called Villa Escudero, in the barrio of Lalig,
Municipality of Tiaong, Quezon Province. While Arsenio Gunda and
Fausto Aguila, godsons of Arsenio Escudero, were guarding the
charcoal factory in the evening of December 22, 1946, a group of
individuals, namely, Santiago Aguila, Elias Aguila, Pedro Aguila, and
one Sanoy, armed with a caliber revolver, and a .45 caliber automatic
pistol, respectively, arrived at said place and approached Gunda, asking
him whether he and Fausto were armed. Gunda answered that they had
returned their arms to the foreman. Santiago then, in a threatening
attitude and pointing his .45 caliber automatic pistol at Gunda, ordered
Gunda and Fausto to go away with them. Elias Aguila and Sansoy tied
the hands of Gunda and Fausto. Fausto begged that he be not taken
away but Santiago said that he would kill anyone, even his father or
brother, who would thwart him.
Fausto Aguila is an elder brother of Santiago Aguila. Santiago was
formerly working also for Escudero, but had been dismissed for mis
behaviour and breach of trust. During the Japanese occupation Santiago
had a quarrel with his brother Fausto in regard to the rice plots alloted
by Escudero to Fausto, during which Santiago challenged Fausto to a
bolo duel. Fausto did not accept the challenge and yielded to Santiago's
demand him five rice plots instead of two. This incident shows the
attitude of Santiago over Fausto. It should be considered in this
connection that the purpose of Santiago was to obtain ransom from
Escudero, using his brother as a tool to accomplish it, as will appear later
herein.
Fausto and Gunda were taken to the house of Jorge Rosales, near the
factory, where Santiago prepared a letter addressed to Escudero,
signed by Gunda and Fausto, demanding ransom from Escudero in the
sum of P7,000.00, with the warning that if Escudero refused, his two
guards would be killed by their captors. Gunda and Fausto at first
refused to sign the letter prepared by Santiago, but through intimidation,
they signed it. As Fausto signed his Christian name only, because he
did not know how to write his surname, Santiago himself wrote it. After
the letter had been signed, Santiago ordered Rosales to deliver it to the
foreman of Escudero, telling Rosales that should he fail to do so he
would be liquidated.
Santiago and Elias Aguila, with their companions, left the house of Jorge
Rosales taking with them Fausto and Gunda. They walked along the
railroad track up to the place called Burol. Leaving Pedro Aguila behind,
they boarded with the captives a truck that was traveling toward the
barrio of Bantilan, boarded another which was going toward Pallian,
where they got off and crossed a river. They boarded another truck for
San Juan, Batangas. There they transferred to another truck bound for
Pallokan, where Fausto and Gunda were left in the house of Alfonso
Alas-as. In that house they were guarded alternately by Elias Aguila and
Alfonso Alas-as who were armed with a grease gun and a .38 caliber
revolver, respectively.
On December 23, 1946, Arsenio Escudero received the first ransom
note bearing the signatures of Arsenio Gunda and Fausto Aguila, but he
ignored it. Santiago wrote another letter signed "Huks" increasing the
ransom to P50,000,000. This letter was received by Escudero on
December 29, 1946, but he paid no attention to it. Santiago wrote a third
letter reducing the amount demanded to the original sum of P7,000.00,
which letter was received by Escudero between the second the fourth
day of January, 1947. Likewise, he did not heed this letter.
Gunda and Fausto were detained in the house of Alas-as for thirteen
days, after which they were released by Santiago, with the warning that
they should not reveal what had happen to them to anybody, otherwise
they would be shot. Fausto and Gunda proceeded directly to San Pablo
City they reported the matter to a son-in-law of Escudero. The authorities
were advised of it. Gunda and Fausto who testified to the above facts
were characterized by the trial courts as "sincere and candid" witnesses,
who narrated the events "with candor and lack of artificiality".
The handwriting in the ransom letter is similar to that in Exh. F, which
was a letter written by Santiago to Arsenio Escudero before the
occurrence of the crime. For this ransom, Santiago was arrested at San
Pablo City on January 7, 1947. During the investigation Santiago made
a statement, Exh. H, in which he admitted that Gunda and Fausto had
been kidnapped by him and Elias with other companions, but claimed
themselves in order to get some money from their employer Arsenio
Esvudero. In said statement, which was sworn to before the Justice of
the Peace of Tiaong, Quezon Province, Santiago admitted that he was
the author of all the ransom letters. During his detention in the provincial
jail of Quezon Province, Santiago wrote a letter dated January 19, 1947,
to Rosario Escudero, wife of Arsenio Escudero, repeating what he had
said in his affidavit, Exh. H, and begging her pardon for what he had
done. Aside from the admission of Santiago as the author of said letters,
we have the testimony of Gunda and Fausto to the same effect, and, in
addition, the opinion of Felipe Logan, handwriting expert of the National
Bureau of Investigation, who studied and compared the letters in
question with documents admitted to have been written by Santiago,
reaching the conclusion that the incriminating letters are in the
handwriting of Santiago.
Elias Aguila, the co-conspirator of Santiago, was arrested in San Juan,
Batangas, on January 20, 1947, by Agent Belvis accompanied by some
policemen, who found in Elias' possession a grease gun which,
according to Gunda, is the same grease gun used by Elias Aguila while
guarding him and Fausto in the house of Alfonso Alas-as. When Elias
was investigated he made a statement, Exh. L, in which he admits
having been one of the authors of the kidnapping and detention, adding
that "two weeks after Fausto and Arsenio were kidnapped, I sent for
Santiago Aguila to come to my place. I sent Sanoy to fetch for him and
he arrived thereafter. Upon his arrival he asked me why I called for him
and I answered that I did not like the affair anymore and to take the two
victims away from my place." The two victims were then released.
The contradictions pointed out by the appellant do not affect the
essential facts and they are such contradictions as may be committed
by honest witnesses in regard to unimportant details which are hard for
anybody to remember.
The appellant argues that it is incredible that the captors would go
through several places, including towns, and boarding several buses in
carrying their captives. There is nothing strange in this, in view of the
prevailing conditions in regard to peace and order in the country, where
the malefactors feel safe when they are armed. This must be an
aftermath of the war..
The theory of the defense that the kidnap was instigated by the same
victims, Gunda and Fausto, in order to obtain money from Escudero is
unbelievable and fantastic. If the victims themselves were the one who
framed-up the kidnap, why should they have charged Santiago and
Elias, who were relatives of Fausto, instead of attributing the crime to
unknown persons? Gunda and even Fausto, notwithstanding the quarrel
with his brother, could have had no sufficient motive to accuse the
defendants of such a serious offense after the latter had them in their
attempt to get money. The uncorroborated story of the defendants
cannot counteract the straightforward testimony given by the witnesses
for the prosecution, reinforced by direct and circumstantial evidence and
the nature of things. Furthermore, the trial Judge who saw and heard the
witnesses, found those of the prosecution, as above stated, candid and
sincere.
The claim of the appellant for amnesty under Proclamation No. 76 has
already been declared without merit by this court.
In view of the foregoing, the judgment appealed from is affirmed, with
costs against the appellant.
It is so ordered.
G.R. No. 77733 December 20, 1988
LANDOIL RESOURCES CORPORATION, CONSTRUCTION
CONSORTIUM, INC., ASIA WATER & SEWERAGE SYSTEM, INC.,
GREATER MANILA LAND CORPORATION, PACIFIC ASIA
BUILDERS AND DEVELOPERS, INC., ET AL., petitioners,
vs.
HON. JUSTICES RICARDO TENSUAN, RODOLFO NOCON AND
FELIPE KALALO OF THE THIRD DIVISION OF THE COURT OF
APPEALS, RICHARD H.M. OUTHWAITE, AS LEAD UNDERWRITER
REPRESENTING HIMSELF AND ALL OTHER UNDERWRITERS
SUBSCRIBING TO LLOYDS' POLICY NO. MAB
255049/MA72632267 AND MANUEL CAMACHO, respondents.
PARAS, J.:
This is a petition for certiorari and prohibition with preliminary injunction
seeking (1) to annul the March 13, 1987 resolution of the Court of
Appeals, * and (2) to restrain R. Outhwaite and Company and Manuel
Camacho from enforcing the said resolution of March 13, 1987.
In January, 1983, herein petitioner Landoil Resources Corporation
(Landoil for short), through insurance brokers, obtained from herein
private respondents (Outhwaite and Company Outhwaite for short)
insurance coverage in the amount of US $50,000,000.00 for its
operation and those of its affiliates and subsidiaries against certain
political risks outside the Philippines. Upon full payment of the
corresponding premium, Outhwaite issued policy No. MAB255049 to
Landoil.
In the same year of 1981, insurance claim for its construction project in
the Middle East was made by Landoil, but the claim was denied by
Outhwaite on the alleged grounds of non-disclosure and
misrepresentation. Hence, petitioners filed Civil Case No. 12521 with the
Regional Trial Court of Makati, presided over by Hon. Rafael Mendoza,
to enforce its insurance claim and for compensatory and exemplary
damages.
On January 7, 1986, summons was served upon Outhwaite through
Smith, Bell & Co., who, on January 9, 1986, filed a manifestation stating,
among others, that it is not authorized to receive summons in behalf of
Outhwaite.
On January 22, 1986, Outhwaite filed a Special Appearance Motion to
Quash Service of Summons (Rollo, pp. 40-45), questioning the
jurisdiction of the Philippine Court over the persons of the defendants
(private respondents herein).
On January 27, 1986, Outhwaite commenced arbitration proceedings
against petitioners in the London Court of Arbitration pursuant to the
arbitration clause contained in the policy, and the High Court of Justice,
Queen's Bench Division, Commercial Court, in an Order dated January
29, 1986 (Ibid., pp. 51-52), ordered, among others —
That the intended defendants be restrained by themselves, their
servants or agents or otherwise howsoever from causing or permitting
any further steps to be taken in Civil Case No. 12521 in the Regional
Trial Court of the National Capital Region of the Philippines; otherwise,
than by way of defending the application of the intended plaintiff herein
to quash service of Summons by which the said civil case was
commenced.
The trial court, in an Order dated February 18, 1986 (Rollo, pp. 54-55),
finding Smith, Bell & Co. as settling agent of Outhwaite, denied
Outhwaite's Special Appearance, Motion to Quash Service of Summons
— capacity as an officer of the Court and as a party to the amicable
After a careful consideration of the arguments of both parties, this Court
believes that Smith, Bell & Co.. Inc. is factually a settling agent of
defendants underwriters and not the corporation of Lloyd's.
Consequently, this Court denies the Motion to Quash Service of
Summons and declares that service of summons upon it is legally
deemed service upon the defendants underwriters. ... .
On February 26, 1986, Outhwaite moved for the reconsideration of the
said order of February 18, 1986, which was opposed by the petitioners.
The trial court, in an order dated June 6, 1986, after Outhwaite had filed
their reply to the opposition, denied the motion for reconsideration (Ibid.,
pp. 56-57).
Outhwaite file a Petition for Certiorari/Prohibition with the Court of
Appeals (Ibid., pp. 58-79), docketed therein as CA G.R. SP No. 09364,
questioning the validity of the service of summons to Outhwaite through
Smith, Bell & Co. and consequently, the jurisdiction of the Makati
Regional Trial Court over their persons.
On September 8, 1986, petitioners filed their Comment (Ibid., pp. 80-
86).
On February 20, 1987, petitioners received a copy of a Motion to
Approve Amicable Settlement (Rollo, pp. 87-94) filed by their counsel,
private respondent Manuel Camacho, with the Court of Appeals.
In a letter dated February 23,1987, Landoil formally terminated the
services of private respondent Camacho as its counsel (Ibid., p. 98).
On February 24, 1987, Agcaoili & Associates filed a Motion for
Substitution of Counsel (Ibid., pp. 99-100) to replace and substitute
private respondent Camacho as Landoil's counsel. On the same date,
Agcaoili & Associates filed a Motion to Strike Out from the Records the
"Motion to Approve Amicable Settlement" (Ibid., pp. 102-104), which
was opposed by private respondent Camacho on March 2, 1987 (Ibid.,
pp. 105-113). Petitioner Landoil filed a reply thereto on March 9,1987
(Ibid., pp. 114-115).
The Court of Appeals, in a resolution promulgated on March 13, 1987
(Ibid., pp. 25-29), approved the amicable settlement. Hence, the instant
petition.
The first Division of this Court, in a resolution dated April 1, 1987,
required the petitioners and/or counsel to submit the verification of the
petition (Ibid., p. 122) which was complied with on April 13,1987 (Ibid.,
pp. 210-212).
Meanwhile, on April 8, 1987, private respondent Camacho filed a Motion
to Dismiss and/or Comments on the instant petition (Rollo, pp. 124-158),
further reiterated and prayed that the petition be dismissed with finality
on April 28, 1987 (Ibid., pp. 217-220). The same was opposed by the
petitioners on May 4, 1987 (Ibid., pp. 221-232).
On May 15, 1987, Outhwaite, et al. filed a Manifestation dated May 14,
1987 (Ibid., pp. 238-239), stating among others, that if the amicable
settlement has been approved and the existence of this binding
settlement agreement has been upheld. Underwriter does intend to
submit to the jurisdiction of Philippine Courts and to comply with the
order putting such agreement into effect and praying that the decision of
the Court of Appeals be affirmed.
In the resolution of May 27, 1987, the petition was given due course and
the parties were required to submit simultaneous memoranda (Ibid., p.
244). On May 25, 1987, petitioners filed their comments on Outhwaite's
manifestation of May 14, 1987 (Ibid., pp. 245-247), while on July 9, 1987,
the Philippine Export and Foreign Loan Guarantee Corporation
PHILGUARANTEE for short) filed a Motion for Leave to Intervene (Ibid.,
pp. 248-252), on which the adverse parties were required to comment in
the resolution of August 10, 1987 (Ibid., p. 340).
On July 15, 1987, petitioners filed their Memorandum (Ibid., pp. 267-
299). Private respondent Camacho, on the other hand, filed his
Memorandum on July 21, 1987 (Ibid., pp. 300-332).
On August 7, 1987, private respondent Camacho filed his Reply to
petitioners' memorandum (Rollo, pp. 341-357), to which, petitioners filed
their Rejoinder (Ibid., pp. 361-363).
On September 9, 1987, petitioners filed their Comment to
PHILGUARANTEE's motion for leave to intervene (Ibid., pp. 365-368).
On September 11, 1987, Outhwaite filed a Supplemental to
Manifestation dated 12 May, 1987 (Ibid., pp. 369-371), to which
petitioners filed a comment (Ibid., 378-381).
On September 22, 1987, private respondent camacho filed his comment
to the Motion for Intervention (Ibid., pp. 382-389).
On September 22, 1987, Atty. David M. Castro, counsel for Outhwaite,
filed a refly to the comment dated September 16, 1987, filed by Messrs.
Agcoili and Associates (Ibid., pp. 385-387).
The First Division of this Court, in a resolution dated September 28,
1987, resolved to grant PHILGUARANTEE's motion for leave to
intervene, and to require it to submit its own memorandum (Ibid., p. 388).
On September 30, 1987, Atty. Alfredo D. Valmonte manifested that: (1)
he was never consulted, nor did he give his consent, permission or
approval to Atty. Manuel Camacho's unilateral execution of a
compromise agreement done for and in the name of Landoil Resources
Corporation; and (2) that he had no dealings or contract with Atty. David
Castro who represents respondents- underwriters (Rollo, pp. 389-390).
Said manifestations were noted by the First Division of this Court in a
resolution dated October 21, 1987 (Ibid., p. 391).
On November 4,1987, Atty. Crispin T. Reyes with his manifestation
dated November 2, 1987, filed for the record a copy of the complaint for
disbarment, without the voluminous annexes, against Atty. Manuel N.
Camacho, Adm. Case No. 3095 for the information of the Court (Ibid.,
pp. 392-427).
On November 27,1987, PHILGUARANTEE filed its memorandum (Ibid.,
pp. 432-453), to which Atty. David M. Castro, in his own personal
settlement, filed his reply to the Memorandum of the Intervenor on
December 9,1987 (Ibid., pp. 454455).
The sole issue raised by petitioners is —
WHETHER OR NOT THE MOTION TO APPROVE AMICABLE
SETTLEMENT IS WITHIN THE ORIGINAL OR APPELLATE
JURISDICTION OF THE COURT OF APPEALS.
On the other hand, intervenor PHILGUARANTEE raised four (4)
grounds for the reversal of the Court of Appeals' resolution, to wit:
I
THAT INTERVENOR IS AN INDISPENSABLE PARTY BUT WAS NOT
GIVEN DUE NOTICE OR DULY HEARD BY THE COURT OF
APPEALS IN VIOLATION OF FUNDAMENTAL DUE PROCESS.
II
THAT THE MEMORANDUM AGREEMENT IS PATENTLY INVALID
AND NULL AND VOID AB INITIO.
III
EVEN ASSUMING, ONLY ARGUENDO, THAT THE COURT OF
APPEALS HAS JURISDICTION, NOTWITHSTANDING, SAID
COMPROMISE AGREEMENT MAY NOT BE APPROVED BECAUSE
THE SAME WAS EXECUTED CONTRARY TO LAW AND IS NULL AND
VOID, HENCE, SAID RESOLUTION IS INVALID AND
UNENFORCEABLE.
IV
THE INDUBITABLE FACTS AND CIRCUMSTANCES SHOW BEYOND
QUESTION THE EXISTENCE OF FRAUDULENT CONSPIRACY TO
DEFEAT LANDOIL'S $540 MILLION-PLUS INSURANCE CLAIMS, THE
BULK OF WHICH WILL GO TO INTERVENOR PHILGUARANTEE,
HENCE, THE PHILIPPINE GOVERNMENT WILL THEREBY SUFFER
HUGE DAMAGES. (Memorandum, pp. 12-13; Rollo, pp. 443-444)
Petitioners, quoting Section 9 of Batas Pambansa Blg. 129, as amended
by Executive Order No. 33 (enumerating the cases wherein the Court of
Appeals has original and/or appellate jurisdiction), contends that the
Motion to Approve Amicable Settlement is not within either the original
or appellate jurisdiction of the Court of Appeals. It further contends that
to decide whether or not the Memorandum Agreement is valid and
enforceable between the purported parties therein, it is necessary to
determine various question of facts and in the process, receive evidence
thereon; but under the second paragraph of the aforesaid Section 9, the
reception of evidence and determination of factual issues can be
undertaken by the Court of Appeals only in aid of its original and
appellate jurisdiction. Hence, petitioners argue that since the Motion to
Approve Amicable Settlement is not within either the original or appellate
jurisdiction of the Court of Appeals, such court has no authority to
resolve the factual questions raised in the said motion, much less
receive evidence thereon. Accordingly, petitioners maintain that such
functions pertain not to the Court of Appeals, but to the regional trial
court.
Such contention is untenable.
It must be stated that the Court of Appeals acquired jurisdiction over the
case when the Petition for Certiorari/Prohibition was filed and the
defendants therein, now herein petitioners, filed their Comment to the
Petition. Having acquired jurisdiction, the same cannot be lost on the
basis of an intervening event, such as the amicable settlement of the
parties. Jurisdiction once acquired by a court over a case remains with
it until the full termination of the case, unless a law provides the contrary
(Bueno Industrial & Development Corp. v. Enage, 104 SCRA 600
[1981]). Moreover, the aforestated Petition for Certiorari/Prohibition
necessarily held in abeyance the original case before the trial court until
the issue of jurisdiction raised before the Court of Appeals is resolved.
Accordingly, all matters related thereto may properly be filed before the
Court of Appeals, especially so if the purpose thereof is to terminate
once and for all the controversy between the parties. To require that the
Motion to Approve Amicable Settlement be filed with the trial court, as
argued by petitioners, would only unduly delay the case, since, as
above-stated, proceedings in the trial court would necessarily be held in
abeyance.
In fact, jurisprudence in a lone line of decisions has established without
question that compromise agreements reached by the parties in a case
and filed before either the Court of Appeals or the Supreme Court, have
been approved and/or sustained by this Court (G. & S. Corp. v. C.A.,
126 SCRA 212 [1983]; Granador v. Elbinias, 126 SCRA 205 (1983];
Valdez v. C.A., 77 SCRA 336 [1977]; Tan Chuan Leong v. C.A., 80
SCRA 493 [1977]; Fernando v. Vasquez, 31 SCRA 288 [1970]; J.V.
Development Corp. v. Cabullo, 41 SCRA 129 [1971]; Gabayan v.
Navarro, 124 SCRA 608 [1983]; Mabasa v. Chang, 56 SCRA 837 [1974];
Montemar v. Geraldez, 79 SCRA 49 [1977]).
Thus, it has been held that a compromise may supersede all agreements
and proceedings that had previously taken place and may constitute a
final and definite settlement of the controversies by and between the
parties. From the time a compromise is validly entered into, it becomes
the source of the rights and obligations of the parties thereto, the
purpose of a compromise being precisely to replace and terminate
controverted claims (Article 2028, Civil Code). A compromise has upon
the parties the effect and authority of res judicata, and is enforceable by
execution upon approval by the court (Article 2037, Civil Code; Republic
v. Estenzo, 25 SCRA 122 [1968]).
There is likewise no merit in petitioners' contention, that even if
respondent Justices found the Motion to Approve Amicable Settlement
cognizable by the Court of Appeals, they should have, at the very least,
in keeping with the fundamental principle of due process, required
presentation of evidence to prove and establish the allegations in the
motion.
The evidence on record clearly shows that an amicable settlement was
reached by the parties. As found by the Court of Appeals on October 27,
1986, Landoil's Board of Directors passed and approved a resolution
authorizing its President, Atty. Ambrosio C. Collado and its counsel,
herein private respondent Manuel N. Camacho, to negotiate, discuss
and conclude an amicable settlement with the underwriters or their duly
authorized representatives/lawyers for the sum of not less than US
$4,000,000.00 and upon such conditions they may deem most beneficial
to Landoil. Pursuant to such resolution, Landoil's counsel Camacho,
initiated negotiations with underwriters' Philippine counsel, David M.
Castro who was likewise authorized by the underwriters jointly with
London Solicitors, Inc. & Co. After a series of negotiations and in
consultation with their respective clients, the parties through their
counsel, arrived at an amicable settlement in the total sum of US
$5,350,000.00 under the terms and conditions embodied in a
Memorandum Agreement (Rollo, p. 26).
Subsequently, Landoil's letter dated December 29, 1986 signed by its
Chairman and President, Ambrosio C. Collado, confirmed the amicable
settlement but asked for a deferment of the formal execution of the
settlement documents to January 26, 1987, stating among others:
Save for the definite date of documentation and mutual deliveries
scheduled today, which we ask to defer as below explained, our Group
firmly and irrevocably convey our resolve to stand by and be held bound
by the substantive aspects of our agreement in principle as among
gentlemen. Let then this, our written word, be our bond. (Rollo, pp. 170-
171)
Squarely on this point in the case of Martin v. Martin, et al. (105 Phil.
753-754 [1979]), this Court ruled that parties to the compromise
agreement who signed and executed the same willingly and voluntarily
should be bound by its terms. Thus, a person cannot repudiate the
effects of his voluntary acts simply because it does not fit him, or simply
because the judge before whom he executed the act, did not have
jurisdiction of the case. In a regime of law and order, repudiation of an
agreement validly entered into can not be made without any ground or
reason in law or in fact for such repudiation.
The fact that the signature of Landoil's Acting Chairman and President
Ambrosio C. Collado, had not yet been affixed on the amicable
settlement will not help the case of the petitioner, because as above
shown, the execution of the document of settlement is undeniable and
further confirmed by the abovecited letter of Atty. Collado affirming in
behalf of Landoil's Board of Directors, the substantive terms thereof,
although begging for the deferment of the formal execution of the
settlement document.
It has already been settled, that the only elements necessary to a valid
agreement of compromise are the reality of the claim made and the
bonafides of the compromise. Hence, if a binding oral compromise
agreement has been entered into, the mere fact that a written agreement
is subsequently drawn to evidence, does not detract from the validity of
the oral agreement, even though the written evidence thereof is not
signed Cadano v. Cadano 49 SCRA 42 [1973]).
On the other hand, the issues raised by the intervenor
PHILGUARANTEE, specifically items II and III are anchored primarily on
the validity or invalidity of the compromise agreement which have
already been thoroughly discussed in the foregoing and therefore, need
no further elaboration.
On the aspect of due process, the records show that the intervenor was
not unaware of the on-going discussion of the amicable settlement both
in the lower court and in the Court of Appeals.
In the lower court, as alleged by private respondent Camacho,
intervenor was allowed to intervene but it never came around to filing the
complaint, although it filed and was granted several motions for
extensions of time to file the same until it was finally overtaken by the
suspension of proceedings in said court (Rollo, p. 331).
In the Court of Appeals, it never intervened nor filed an opposition to the
Motion to Approve Amicable Settlement. On the contrary, the latter
dated December 29, 1986 (Rollo, pp. 170-171) of Landoil's lawyer, Atty.
Collado, addressed to Messrs. Richard M. Outhwaite, et al., stated that:
The Management of Philguarantee has been apprised of the settlement;
is supportive of that arrangement; and we are confident of obtaining
Philguarantee Board's indorsement of the action. ... (Rollo, pp. 170-171).
In any event, PHILGUARANTEE has been allowed by this Court to
intervene and to adequately present its side of the case. Accordingly,
the contention that it was not afforded due process is now less than fair.
Finally, intervenor PHILGUARANTEE's and the government's interests
in this case are already duly protected by the appointment of PCGG
members to the Board of Directors of Landoil who now constitute the
majority thereof (Rollo, p. 383).
PREMISES CONSIDERED, the questioned March 13, 1987 Resolution
of the Court of Appeals is AFFIRMED, and the instant petition is
DENIED.
SO ORDERED.
G.R. No. 120482 January 27, 1997
REFORMIST UNION OF R.B. LINER, INC., HEVER DETROS, ET
AL., petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION, R.B. LINER, INC.,
BERNITA DEJERO, FELIPE DEJERO, RODELIO DEJERO, ANA
TERESA DEJERO, and RODELIO RYAN DEJERO, respondents.
DAVIDE, JR., J.:
This is a special civil action for certiorari Rule 65 of the Rules of Court
seeking to set aside the decision1 of the National Labor Relations
Commission (NLRC) in NLRC NCR CA No. 004115-92, which affirmed
the decision2 of the Labor Arbiter in the consolidated cases NLRC NCR
Case Nos.00-03-01392-90 and 00-04-02088 -90, and the resolution of
the former denying the motion for the reconsideration of its decision.3
Petitioner Reformist Union of R.B. Liner, Inc. (hereinafter Reformist),
with Hever Detros as its president, is composed of drivers, conductors,
and mechanics of private respondent R.B. Liner, Inc. Private
respondents Bernita, Felipe, Rodelio, Ana Teresa, and Rodelio Ryan,
all surnamed Dejero, are the incorporators of R.B. Liner, Inc.
From the record and the pleadings filed by the parties, we cull the
following material facts in this case:
Petitioner union was organized in May 1989 "by affiliating itself with
Lakas Manggagawa sa Pilipinas (hereinafter Lakas)."4 Lakas filed a
notice of strike on 13 November 1989 because of alleged acts of unfair
labor practice committed by the private respondents.5 Despite
conciliation hearings held on 4 and 6 December 1989, the parties failed
to reach an agreement. Later, another act of unfair labor practice
allegedly committed by the private respondents impelled Reformist,
with the authorization of Lakas, to go on strike on 13 December 1989
even as conciliation proceedings continued.6
On 21 December 1989, R.B. Liner, Inc. petitioned then Secretary
Franklin Drilon of the Department of Labor and Employment (DOLE) to
assume jurisdiction over the ongoing dispute or certify it to the NLRC.7
Secretary Drilon determined that "[t]he ongoing work stoppage in the
company . . . adversely affects an industry indispensable to the
national interest;" thus on 28 December 1989, he certified the dispute
to the NLRC for compulsory arbitration and issued a return-to-work
order.8
The certified case (NLRC Certified Case No. 0542, entitled in Re:
Labor Dispute at RB Liner, Inc.) was dismissed on 13 February 19909
after the union and the company reached an agreement10 on 19
January 1990 providing, among other matters, for the holding of a
certification election.
On 31 January 1990, a certification election was held were Lakas won
as the collective bargaining agent of the rank-and-file employees.11 On
13 February 1990, Lakas presented a proposal for a collective
bargaining agreement to Bernita and Rodelia Dejero,12 but they
refused to bargain.13 Meanwhile, as admitted by private respondents'
witness Arcile Tanjuatco, Jr., eight R.B. Liner buses were "converted"
to Sultran Lines, one "became MCL," and another "became SST
Liner."14
The petitioners filed NLRC NCR Case No. NCR-00-03-01392-90
charging the private respondents with unfair labor practice, i.e., illegal
lock-out. The private respondents countered with NLRC Case No.
NCR-00-04-02088-90, which sought to declare as illegal the union's 13
December 1989 strike, as well as other "work stoppages/boycotts"
staged by the petitioners. The two cases were consolidated and
simultaneously tried.15
In his decision of 27 October 1992, Labor Arbiter Ricardo Nora ruled
that the evidence, e.g., the private respondents' proof of payment of
percentage taxes for 1990 and Conductors/Inspectors Daily Reports,
"indicate[d] against an illegal lockout," while finding that Reformist
staged an illegal strike for the following reasons:
1. The Reformist failed to show that they observed the legal
requirements of a legal strike, like the following:
First, the Reformist failed to show and present evidence that the
approval of majority vote of its members were obtained by the secret
ballot before the strike; Second, they failed to show that they submitted
the strike vote to the department of Labor at least seven (7) days prior
to the intended strike; and Third, all members of the Reformist Union
struck even before the certification election, when there was no definitive
bargaining unit duly recognized and while the conciliation process was
still on-going and in progress. Exh. 7-D is clear which states the
following: "The Union object[s] with [sic] the position of Management for
the reason that considering that they are on strike such election is moot
and academic. All employees as per union allegation participate[d] in
that concerted action.
2. The Reformist engaged in illegal, prohibited activities by obstructing
the free ingress and egress to and from the R.B. liner's garage premises
where the trucks were parked; (Exhs. "8" "8-A to "8-D").
3. The Reformist failed to present clear evidence . . . rebutting
respondents' claim that the Reformist blatantly defied the Secretary's
return to work Order dated December 28, 1989. The evidence adduced
particularly Exhibit "12" (the minutes of the conference on January 19,
1990 in Office of the NLRC Commissioner Diokno) includes the
following: "That the Union assured to cause the return within five (5) days
or January 24, of all employees who have not reported for work and
management agreed to accept them." This clearly indicates an
admission by the Reformist that its members did not comply with the
Return-to-work order of the Secretary of Labor. It may be noted though
that some members complied with the Order as per testimony of
respondents' witness, however, the same workers had earlier
participated in prohibited and illegal activities like illegal picketing that
characterized an illegal strike.16
The Labor Arbiter then disposed as follows:
IN VIEW OF THE FOREGOING, judgment is hereby rendered:
1. Dismissing the complaint of Reformist in NLRC-NCR-Case No. 00-
03-01392-90 for Unfair Labor Practice (Illegal lockout) for lack of merit;
2. Declaring the December 13, 1989 Strike by the Reformist as Illegal in
NLRC-NCR-Case No. 00-04-02088-90;
3. Declaring all the Offices and Members of the Reformist to have lost
their employment status for participating in an Illegal Strike. They are
named as follows
xxx xxx xxx
All other issues are Dismissed for lack of merit.17
On appeal, the NLRC affirmed the Labor Arbiter's finding that Reformist
held an illegal strike, reasoning as follows:
It [Reformist] disputes the holding that an illegal strike was staged on
December 13, 1989 on the ground that previous thereto, conciliation and
mediation conferences were conducted and which thus constituted . . .
evidence that there was a notice of strike filed consequent to a strike
vote had among the members of the union. This, assuming for the sake
of argument is true, did not out rightly put a stamp of validity for such
concerted action as the fact remains that no certification election was
conducted previous to the strike. Hence, the union could not have validly
claimed that it was the exclusive bargaining agent to the workers in
petitioners' premises when is staged the subject strike. Nevertheless,
such flaw, as correctly assumed by the appellants, could have been
corrected by the Return to Work Order of then Secretary of Labor
Franklin Drilon. The finding that this Order was defied is contested by
the appellants alleging that the logbook which contains an entry of all
those who reported for work was never presented by management, thus
constituting suppression of evidence. This could have been true had the
said logbook constituted as the sole evidence in support of petitioners'
assertion as to appellants' failure to comply with the return to work order.
However, the minutes of the January 19, 1990 conference before then
Commissioner Diokno establishes such fact on the strength of the
Union's admission when it undertook to assure "the return within five (5)
days or January 24 of all employees who have not reported for work . .
."18 Further, it was also established that the strikers were guilty of
committing illegal activities, particularly the obstruction of free ingress
and egress to and from the Liner's garage premises as shown by the
pictures taken thereat. All told, the foregoing established circumstances
yield no other conclusion except to declare the strike staged by the union
as a illegal.19
Anent the illegal lockout, the NLRC deemed R.B. Liner, Inc's conversion
of some of its buses into those of other bus companies as sufficient
reason for the petitioners to believe, in good faith, that the private
respondents were committing an act of unfair labor practice. The NLRC
ruled that this circumstance:
[M]itigate[d] the liability of the striking union as well as its members not
only in considering the propriety of administering the avowed principle
of equity in labor case[s] but likewise on the strength to the
pronouncements of the Supreme Court in aline of cases where it was
held that a strike undertaken on account of what the workers perceived
to be unfair labor practices acts on the part to the employer should not
be outrightly taken as illegal even if the allegations of unfair labor
practice acts are subsequently to be untrue.20
Thus, the NLRC affirmed the decision of the Labor Arbiter but allowed
reinstatement of the dismissed employees:
Accordingly, as a measure of social justice, resumption of employment
relations between the parties shall be decreed without however granting
any monetary relief considering that both parties had, to a certain extent,
engaged in the commission of acts which rendered them underserving
of their prayer for damages and other concomitant reliefs akin to their
causes of action.21
Reformist and its members moved to consider the NLRC decision, which
was, however, denied on 31, March 1995.22 The petitioners then came
to us with this special civil action for certiorari, citing the following in
support thereof:
1. RESPONDENT NLRC GRAVELY ABUSED ITS DISCRETION
AMOUNTING TO LACK OF JURISDICTION IN FAILING TO GIVE
WEIGHT TO THE OVERWHELMING EVIDENCE OF THE
PETITIONERS SHOWING [AN] ILLEGAL LOCKOUT COMMITTED BY
THE RESPONDENTS.
2. RESPONDENTS NLRC DENIED SUBSTANTIAL JUSTICE TO THE
PETITIONERS BY NOT AWARDING THEM THE MONETARY
RELIEFS PRAYED FOR.
3. RESPONDENTS NLRC ERRONEOUSLY INTERPRETED THE LAW
ENUNCIATED BY THE HON. SUPREME COURT GIVING
SEPARATION PAY PLUS BACKWAGES TO EMPLOYEES WHOSE
REINSTATEMENT TO THEIR FORMER POSITIONS HAVE BEEN
RENDERED IMPOSSIBLE BY THE RESPONDENTS.
The private respondents insist that the petitioners-employees were
validity dismissed for serious misconduct and violations of labor laws
and lawful orders of the Labor Secretary, hence not entitled to
reinstatement nor separation pay in lieu of reinstatement.
This petition must be granted, albeit not on the grounds advocated by
the petitioners.
The private respondents can no longer contest the legality of the strike
held by the petitioners on 13 December 1989, as the private respondents
themselves sought compulsory arbitration in order to resolve that very
issue hence their letter to the Labor Secretary read, in part:
This is to request your good office to certify for compulsory arbitration or
to assume jurisdiction over the labor dispute (strike continuing) between
R.B. Liner, Inc. . . . and the Lakas Manggagawa sa Pilipinas.
The current strike by Lakas which started on December 13, 1989 even
before Certification Election could be held not be resolved by the NCR
Conciliation-Mediation Division after six meetings/conferences between
the parties.23
The dispute or strike was settled when the company and the union
entered into an agreement on 19 January 1990 where the private
respondents agreed to accept all employees who, by then, had not yet
returned to work. By acceding to the peaceful settlement brooked by the
NLRC, the private respondents waived the issue of the illegality of the
strike.
The very nature of compulsory arbitration makes the settlement binding
upon the private respondents, for compulsory arbitration has been
defined both as "the process of settlement of labor disputes by a
government agency which has the authority to investigate and to make
an award which is binding on all the parties,"24 and as mode of arbitration
where the parties are "compelled to accept the resolution of their dispute
through arbitration by the a third party."25 Clearly then, the legality of the
strike could no longer be reviewed by the Labor Arbiter, much less by
the NLRC, as this had already been resolved. It was the sole issue
submitted for compulsory arbitration by the private respondents, as is
obvious from the portion of their letter quoted above. The case certified
by the Labor Secretary to the NLRC was dismissed after the union and
the company drew up the agreement mentioned earlier. This
conclusively disposed of the strike issue.
The Labor Code provides that the decision in compulsory arbitration
proceedings "shall be final and executory ten (10) calendar days after
receipt thereof by the parties."26 The parties were informed of the
dismissal of the case in a letter dated 14 February 1990, and while
nothing in the record indicates when the said letter was received by the
parties, it is reasonable to infer that more than ten days elapsed —
hence, the NLRC decision had already become final and executory —
before the private respondents filed their complaint with the Labor
Arbiter on 13 July 1990.27 A final judgment is no longer susceptible to
change, revision, amendment, or reversal.28 Neither the Labor Arbiter
nor the NLRC, therefore, could review the same issue passed upon in
NLRC Certified Case No. 0542, and their decisions to the contrary have
been rendered in grave abuse of discretion amounting to excess of
jurisdiction.
The agreement entered into by the company and the union, moreover,
was in the nature of a compromise agreement, i.e. "an agreement
between two or more persons, who, for preventing or putting an end to
a lawsuit, adjust their difficulties by mutual consent in the manner which
they agree on, and which everyone of them prefers to the hope of
gaining, balanced by the danger of losing."29 Thus in the agreement,
each party made concessions in favor of the other to avoid a protracted
litigation. While we do not abandon the rule that "unfair labor practice
acts are beyond and outside the sphere of
compromises."30 the agreement herein was voluntarily entered into and
represents a reasonable settlement, thus it binds the parties.31 On this
score, the Labor Code bestows finality to unvitiated compromise
agreements:
Art. 227 Compromise agreements — Any compromise settlement,
including those involving labor standard laws, voluntarily agreed upon
by the parties with the assistance of the Bureau or the regional office of
the Department of Labor, shall be final and binding upon the parties.
The National Labor Relations Commission or any court shall not
assume jurisdiction over issues involved therein except in case of non-
compliance thereof or if there is prima facie evidence that the
settlement was obtained through fraud, misrepresentation or coercion.
The agreement in this case complies with the above requisites, forged
as it was under authority of the Labor Secretary, with representatives
from both the union and the company signing the handwritten
agreement to signify their consent thereto. The private respondents
never alleged in their answer32 to the petitioners' complaint before the
Labor Arbiter, nor in their complaint,33 that the petitioners did not
comply with the agreement. The binding effect of the agreement on the
private respondents in thus unimpaired.
The private respondents' cause likewise fails in light of Article 2037 of
the Civil Code, which gives compromise agreements "the effect and
authority of res judicata" upon the parties to the same, even when
effected without judicial approval.34 The Labor Arbiter and the NLRC
therefore erroneously reviewed an issue which had already been laid
to rest by the parties themselves and which, applying the principle of
res judicata, they could no longer re-litigate.35
The only barrier then to the petitioners-employees' reinstatement is
their defiance of the Labor Secretary's return-to-work order, which the
private respondents claim as one reason to validly dismiss the
petitioners-employees. We disagree, however, with the finding that
Lakas/Reformist violated the said order.
It is upon the private respondents to substantiate the aforesaid
defiance, as the burden of proving just and valid cause for dismissing
employees from employment rests on the employer, and the latter's
failure to do so results in a finding that the dismissal was unfounded.36
The private respondents fell short of discharging this burden.
Contrary to the Labor Arbiter's and the NLRC's view, the union's
undertaking to cause absentee employees to return to work was not an
admission that its members defied the Labor Secretary's order. Those
who did not report for work after the issuance of the Labor Secretary's
order may not have been informed of such order, or they may have
been too few so as to conclude that they deliberately defied the order.
The private respondents failed to eliminate these probabilities.
The most conclusive piece of evidence that the union members did not
report for work would be the company's logbook which records the
employees' attendance.37 The private respondents' own witness,
Administrative Manager Rita Erni, admitted that the logbook would
show who among the employees reported for work.38 The logbook was
supposed to be marked as Exhibit "14" for the private respondents, but
was withdrawn,39 then the private respondents' counsel, Atty.
Godofredo Q. Asuncion, later intimated that the said logbook was
"stolen or lost."40
We are not prepared to conclude that the private respondents willfully
suppressed this particular piece of evidence, in which case the same
would be presumed adverse to them if produced.41 However, other
evidence indicate that the petitioners-employees complied with the
Labor Secretary's return-to-work order, namely, the private
respondents' Exhibits "11" to "11-E."42 These are
Conductors/Inspectors Daily Reports which detail the bus trips made
by a particular conductor-driver tandem, as well as the numbers of the
bus tickets used during each trip, and these reports are all dated 30
December 1989 — merely two days after Secretary Drilon issued his
order — indicating that a number of employees did report for work in
compliance with the Secretary's order. Moreover, the said exhibits
were executed by some of the employees ordered dismissed by the
Labor Arbiter.43
The private respondents intended the exhibits to prove that only a
handful of employees reported for work following the issuance of the
Labor Secretary's order, but they never established that these exhibits
were the only reports filed on 30 December 1989, thus, there may have
been employees other than those named in the said exhibits who
reported for work in obeisance to the Labor Secretary. Certainly, the
Daily Reports accomplished by drivers and conductors would not
reflect the attendance of mechanics. Besides, it was not shown by the
private respondents that their employees were required to the file the
Conductors/Inspectors Daily Reports such that those who did not file
would be instantly deemed absent.
The private respondents thus failed to satisfactorily establish any
violation of the Labor Secretary's return-to-work order, and
consequently, the Labor Arbiter's and the NLRC's contrary finding is
not anchored on substantial evidence. Grave abuse of discretion was
thus committed once more.
As regards the illegal lockout alleged by the petitioners, we agree with
the NLRC's finding that the petitioners had sufficient basis to believe in
good faith that the private respondents were culpable. The NLRC
found this circumstance to justify the petitioners-employees'
reinstatement; we add that since there was, in fact, no defiance of the
Labor Secretary's return-to-work order, and no cause to decree the
petitioners-employees' dismissal in the first instance, reinstatement of
the dismissed employees can be the only outcome in this case.
The possibility of reinstatement is a question of fact, and where a
factual determination is indispensable to the complete resolution of the
case, this Court usually remands the case to the NLRC.44 In view,
however, of both parties' assertion that reinstatement has become
impossible because, as claimed by the petitioners, "the buses were
already disposed of"; or as claimed by the private respondents, R.B.
Liner, Inc., had "ceased operations" because "its Certificate of Public
Convenience had expired and was denied renewal," and further, of
"closure of the company" due to "lack of operational trucks and buses
and high costs of units,"45 there is no need to remand this case to the
NLRC. Due to the infeasiblity of reinstatement, the petitioners' prayer
for separation pay must be granted. Separation pay, equivalent to one
month's salary for every year of service, is awarded as an alternative to
reinstatement when the latter is no longer an option,46 and is computed
from the commencement of employment up to the time of termination,
including the period of imputed service for which the employee is
entitled to back wages. The salary rate prevailing at the end of the
period of putative service should be the basis for computation.47
The petitioners are also entitled to back wages. The payment of back
wages "is a form of relief that restores the income that was lost by
reason of unlawful dismissal."48 The petitioners' dismissal being
unwarranted as aforestated, with the employees dismissed after R.A.
No. 671549 took effect, then, pursuant to the said law and the latest rule
on the matter laid down in the Resolution of 28 November 1996 of this
Court, sitting en banc, in Bustamante vs. National Labor Relations
Commission,50 the petitioners-employees are entitled to payment of full
back wages from the date of their dismissal up to the time when
reinstatement was still possible, i.e., in this instance, up to the
expiration of the franchise of R.B. Liner, Inc.
WHEREFORE, the instant petition is GRANTED. The assailed decision
of the National Labor Relations Commission in NLRC NCR CA No.
004115-92, as well as that of the Labor Arbiter in the consolidated
cases of NLRC NCR Case Nos. 00-03-01392-90 and 00-04-02088-90
are SET ASIDE Petitioners-employees are hereby awarded full back
wages and separation pay to be determined by the Labor Arbiter as
prescribed above within thirty (30) days from notice of this judgment.
SO ORDERED.
G.R. No. L-18010 September 25, 1968
THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee,
vs.
TEOFILO CABILTES, ET AL., defendants-appellants.
This is an appeal interposed by Teofilo Cabiltes and Gonzalo Cabiltes
from the decision of the Court of First Instance of Leyte (Ormoc City) in
its criminal case 8470, finding them guilty of the crime of murder. The
dispositive portion thereof reads as follows:
The Court finds the accused Teofilo Cabiltes and Gonzalo Cabiltes
guilty beyond reasonable doubt of the crime of murder and hereby
sentences each of said accused Teofilo Cabiltes and Gonzalo Cabiltes
to suffer the penalty of reclusión perpetua and to jointly and severally
indemnify the heirs of Esteban Mesias in the sum of six thousand
pesos (P6,000.00) and to pay 2/3 of the costs. . . . .
The weapons used in the commission of the crime are hereby
confiscated.
In an amended complaint filed with the justice of the peace court of
Kananga, Leyte, seven persons, namely, Teofilo Cabiltes, Domingo
Cabiltes, Gonzalo Cabiltes, Diego Cabiltes, Arturo Allego, Carlito
Moriles and Berto Nadera, were charged with the murder of Esteban
Mesias. Domingo Cabiltes, Carlito Morales and Arturo Allego were
later excluded from the complaint because the prosecution entertained
grave doubt as to their participation in the commission of the crime.
Only Teofilo Cabiltes, Gonzalo Cabiltes, and Diego Cabiltes were
thereafter indicted in an information filed with the Court of First
Instance of Leyte (Ormoc City), which recites that on or about May 31,
1960, the three accused, conspiring and confederating, and mutually
helping one another, and with treachery, feloniously assaulted,
attacked, and wounded Esteban Mesias with a bolo, knives and
stones, inflicting injuries on him, to wit: "(1) incised wound on the chin
2-1/2 inches long, deepness reaches the bone; (2) incised wound 3
inches below the left clavicle 1-1/2 inches long and 1/4 inch deep; (3)
stab wound right side epigastric region 1 inch long 10 inches deepness
diagonal; (4) stab wound 1 inch above sternum left side 1 inch long 8
inches deepness diagonal; and (5) stab wound back left side 1 inch
long by 10 inches deepness diagonal," which injuries caused his death.
The version of the prosecution, as unfolded by witnesses Faustino
Alapan, Ceferino Moriles, Demetrio D. Sarit and Joaquin Demillo, and
the documentary evidence on record, is substantially as follows: During
a barrio fiesta in Natubgan, Kananga, Leyte, while Teofilo Cabiltes was
standing on the roadside (where a native drama was to be staged) at
around six o'clock in the evening of May 31, 1960, he was informed by
his uncle Gregorio that his father Domingo Cabiltes had been
assaulted by Esteban Mesias. Teofilo Cabiltes proposed to take
revenge. And this proposal to kill Mesias was communicated to
Gonzalo Cabiltes, Domingo Cabiltes, Diego Cabiltes, Carlito Moriles,
Arturo Allego and Gualberto Nedera all of whom gave their assent.
Teofilo Cabiltes then went home, changed his clothes, and armed
himself with a hunting knife. Upon his return, Gonzalo Cabiltes, Diego
Cabiltes, Domingo Cabiltes, Arturo Allego and Carlito Moriles and he,
as one group, left for the poblacion of Kananga, accompanied by
Faustino Alapan. At about half a kilometer from the house of Domingo
Cabiltes, they overtook Mesias. Teofilo Cabiltes walked abreast and
side by side with Mesias for a while, and then stabbed him in the back
with his hunting knife. Gonzalo Cabiltes then stabbed him in the breast
with a small bolo. When the victim slumped to the ground, the three
accused carried him to a canal filled with water, after which Teofilo
Cabiltes hacked him on the chin and other parts of the body. Diego
Cabiltes then hurried home, while Gonzalo Cabiltes ran away to the
house of his aunt where he was later arrested.
The three accused, after their arrest, as well as Faustino Alapan,
executed affidavits which were sworn to before Demetrio D. Sarit,
justice of the peace of Kananga, Leyte.
The version of the defense, on the other hand, unravelled by the
declarations of Diego Cabiltes, Teofilo Cabiltes, Gonzalo Cabiltes,
Benjamin Pore, Eufracio Zarcon and Buenaventura Taliba consists
partly in a disavowal that the written statements secured from TeofiIo,
Diego and Gonzalo Cabiltes were voluntarily made. Atty. Benjamin
Pore declared that he was informed by the three accused of their
maltreatment at the hands of the police authorities, and because of this
he advised them to submit to medical treatment, which they did.
The appellant Gonzalo Cabiltes, while admitting that he was with
Teofilo Cabiltes on the way to the poblacion of Kananga on the day of
the killing, disclaimed knowledge of the plot to kill Mesias. He declared
that on their way to the poblacion, they met Mesias, who thereupon
asked Teofilo Cabiltes if he was the son of Domingo Cabiltes, and
when Teofilo answered that he was, Mesias forthwith boxed him on the
right forehead. Surprised at what he saw, he fled to the house of his
aunt, Poying Cabiltes. He was later apprehended and brought to the
municipal jail together with Teofilo Cabiltes, Diego Cabiltes and
Domingo Cabiltes. He claims that all of them were manhandled by the
police, for which reason they sought medical treatment at the Ormoc
Public Dispensary.
Upon its evaluation of the evidence on record, the trial court rendered
the judgment theretofore adverted to. Teofilo Cabiltes has withdrawn
his appeal,1 so we are here concerned only with Gonzalo Cabiltes'
appeal.2
Gonzalo Cabiltes puts squarely in issue the credibility of Faustino
Alapan, the only eyewitness for the prosecution, averring that this
witness has enmeshed himself in irretrievable inconsistencies and
grave contradictions. Specifically, it is averred that while in his affidavit
(exhs. 1, 1-A), Alapan stated that when the killing took place at around
six o'clock in the evening of May 31, 1960, he was in the house of
Domingo Cabiltes, pounding rice, after which he was told to go to the
poblacion of Kananga, in his direct testimony he declared that at the
time the killing took place, he was in Diego Cabiltes' house in barrio
Tubgan, Kananga, pounding rice, and, on cross-examination, he stated
that he started to live in the house of Javier Porras at three o'clock in
the afternoon of the same date. The appellant's submission, on the
basis of the abovestated contradictions, is that Alapan was not present
at the scene of the killing as it was impossible for him to be in two
places at the same time.
Our own perceptive examination of Alapan's oral testimony vis-a-vis his
affidavit reveals no material contradiction of consequence. Although in
his affidavit he did state that he was in the house of Domingo Cabiltes
at about six o'clock in the evening of May 31, 1960, his oral testimony
that he was in the house of Diego Cabiltes in the afternoon of the same
date makes no mention of the exact time of his presence in the house
of the latter. We are therefore not prepared to accept the appellant's
thesis that Alapan's being in Diego's house earlier precluded him from
being present at six o'clock of the same afternoon in the house of
Domingo Cabiltes, especially if we take into account that the barrios
where the houses of Domingo and Diego are located, Natubgan and
Tubgan, respectively, are in the same municipality of Kananga. There
is no evidence whatsoever that would suggest that if Alapan was
initially in the barrio of Tubgan, it was impossible for him to be in the
house of Domingo Cabiltes in barrio Natubgan in the afternoon of the
same day.
The appellant lays stress on the import of the testimony of Alapan on
cross-examination that he started to live in the house of Javier Porras
at three o'clock in the afternoon of May 31, 1960, that he did not leave
the house of Porras except at 4: 00 p.m. when he went out to fetch
water, and that he had never gone to barrio Natubgan. The pertinent
testimony reads:
Q. On that date when you started living with Mr. Porras, what time of
day did you go to the house of Mr. Porras to start living with him?
A. I went to the house of Mr. Porras in the afternoon of that day.
Q. Approximately what time in the afternoon?
A. I went to the house of Mr. Porras on May 31, 1960, at about 3:00
o'clock.
Q. And you did not leave the house of Mr. Porras from that time on, did
you?
A. I left the house of Mr. Porras.
Q. When, what time did you go out from the house of Mr. Porras on
May 31, 1960?
A. At about 4:00 o'clock.
Q. Where did you go at 4:00 o'clock in the afternoon of May 31, 1960?
A. I fetched water to be used for cooking.
Q. And you never had gone to the barrio of Natubgan?
A. No, sir.
But as aptly stated by the Solicitor General, when the witness stated
that he had never gone to barrio Natubgan, the question that was
asked him did not make reference to any particular date or hour. So
that his negative answer could refer to any day other than that of the
commission of the crime. But whatever doubt may have been
engendered by the above interrogation and the answer thereto elicited
regarding his presence at the scene of the crime, was dissipated when
he made the clarification that the killing had already happened when he
went to live in the house of Porras.
It is further argued that there was no sense in the Cabilteses' bringing
Alapan along with them to kill Mesias, because as there were already
six in the group, Alapan, who was a mere youngster of 15 years of age,
could not be of any conceivable help to them. We deem it unnecessary
to speculate on the possible reasons or motives that impelled the
accused to take Alapan with them in the execution of their mission to
liquidate Mesias, but it is pertinent to observe in this regard that Alapan
was a former neighbor of Teofilo Cabiltes and Gonzalo Cabiltes in
barrio Minuto, Kananga and that for sometime he lived in the house of
Teofilo Cabiltes.
Further assailing Alapan's credibility, the appellant not only accords
undue emphasis to the statement made by Alapan in his affidavit to the
effect that Domingo Cabiltes, Arturo Allego and Carlito Moriles helped
in stabbing Mesias, but as well contrasts his declaration in direct
examination that Gonzalo, Teofilo and Diego Cabiltes inflicted the
wounds sustained by the deceased, with his declaration on cross-
examination that Domingo Cabiltes, Teofilo Cabiltes and Gonzalo
Cabiltes were the only participants in the stabbing incident. Be that as
it may, as regards the participation of Teofilo Cabiltes and Gonzalo
Cabiltes in the stabbing, Alapan's testimony was consistent both in the
direct and cross-examinations, although this appears to be at variance
with the narration in his affidavit. The discrepancy regarding who took
part in the stabbing, is of course patent, but such contradiction may
justifiably be overlooked because it is not infrequent that a witness
may, without design, inaccurately narrate certain facts arising from
extraordinary occurrences. As Moore on Facts, 1098, has said, an
affidavit, "being taken ex parte, is almost always incomplete and often
inaccurate sometimes from partial suggestion, and sometimes from
want of suggestion and inquiries, without the aid of which a witness
may be unable to recall the connected collateral circumstances
necessary for the correction of the first suggestion of his memory and
of his accurate recollection of all that belongs to the subject."
Moreover, Alapan was a lowly laborer, an illiterate barrio lad, 15 years
of age, who signed his name by affixing his thumbmark, did not know
how to write, did not know what a minute or an hour is, or how many
days there are in a month, or what a year is, and could not recall the
different barrios where he lived.
Although it is neither the function nor the prerogative of a court to
conjure up a meaning that is not there or to give to the testimony of a
witness a meaning that cannot reasonably be inferred from the entirety
of his integrated testimony, we are of the opinion, nevertheless, that
this Court is required by the recognized canons of judicial review to
determine whether under the environmental circumstances
surrounding the declarations of a witness, the said witness can be
accorded credence. In the case at bar, we are satisfied, after a
searching scrutiny of the testimony and the affidavit of eyewitness
Alapan, that the contradictions and inconsistencies in his declarations
are trivial mistakes which cannot be attributed to a desire to pervert the
truth. It is a truism that the most candid witness oftentimes commits
mistakes and incurs in inconsistencies in his declarations, but such
honest lapses do not necessarily impair his intrinsic credibility. Far from
being evidence of falsehood they could justifiably be rewarded as a
demonstration of good faith and, in this case before us, a confirmation
of the fact that Alapan was not a rehearsed witness.
Indeed, we note that Alapan appears to be a person who bore
absolutely no ill-feeling against any of the accused; the record does not
disclose any untoward motive which could have induced him to perjure
himself in a prosecution for a heinous crime. The theory of intentional
falsehood which is the central theme of the appellant in his brief must
therefore be discounted. At all events, there is proof beyond
reasonable doubt that the appellant, acting in conspiracy, participated
in the killing of the deceased.1awphîl.nèt
Firstly, his disclaimer of knowledge of the plot to kill Mesias is negated
by the following circumstances: (1) the plan to kill Mesias was discussed
before they left for the poblacion; (2) Teofilo Cabiltes personally
explained to him the plan to go to the poblacion; (3) he joined the other
accused and was with them on the way to Kananga; and (4) he was
admittedly present when the stabbing was committed.
Secondly, his declaration that when Teofilo Cabiltes stabbed the
deceased he ran away, is of doubtful veracity. For, if as testified to by
him, it was Mesias who first hit Teofilo Cabiltes on the right forehead,
causing the latter to fall to the ground, then his natural reaction as an
uncle would be to rush to the aid of his prostrate nephew. Abandoning
his relative in the condition pictured by him is contrary to human instinct:
blood is still thicker than water. Indeed, it is more reasonable to believe
that Gonzalo Cabiltes is not the type of a man so devoid of courage and
so lacking in human feeling as not to give succor or defend his nephew
from his alleged assailant whom he described as being twice taller and
bigger than Teofilo Cabiltes. Thus it is that we accept as the true version
of the appellant's behavior during the incident that testified to by Alapan
who affirmed that after Teofilo Cabiltes stabbed Mesias, Gonzalo
Cabiltes also stabbed him.
Thirdly, corroboration can be gleaned from the autopsy findings of
sanitary inspector Joaquin Demillo. The various stab wounds found in
the body of the deceased were obviously caused by more than one
weapon and inflicted by more than one person. During the trial, two
different weapons were presented in evidence, which supports the
thesis that at least two persons participated in the stabbing. Alapan
identified the hunting knife (exh. E) as the weapon used by Teofilo
Cabiltes, and the small bolo (Exh. F) as that wielded by Gonzalo
Cabiltes.
Fourthly, the mute but eloquent physical evidence proves beyond
peradventure that the mortal "stab wound 1 inch above sternum left side
1 inch long 8 inches deepness diagonal" sustained by Mesias was
caused by the small bolo which measures about eight inches in length
and about one inch in width.
Finally, the testimony of Alapan finds indirect corroboration in the
extrajudicial confession of Teofilo Cabiltes, Gonzalo's co-accused,
which in part states "That when he [Esteban Mesias] was already hit my
companions rushed at him namely; . . . Gonzalo Cabiltes, . . . and they
help one another in stabbing Esteban Mesias and they also stoned him."
True it is that an extrajudicial confession is admissible only against the
person who made it; jurisprudence, however, makes it admissible as
corroborative evidence of other facts that tend to establish the guilt of
his co-defendant(s) (People v. Simbajon, et al., L-18073-75, Sept. 30,
1965). Conspiracy having been established in this case, each of the
statements is admissible against all the conspirators (People v. Belen,
et al., L-13895, Sept. 30, 1963). The appellant's conduct before, during
and after the commission of the crime, conclusively shows that he acted
in concert with his co-accused.
Of course, Gonzalo Cabiltes claims with vehemence that their
statements were wrenched from them thru force and violence. This claim
does not command respect, as no motive on the part of the investigating
officer has been proven, and none was in fact given, that could have
impelled him to concoct the facts narrated in the extrajudicial
confessions in question. Moreover, judging from the nature of the facts
stated therein, it is clear that it is only the affiants who could have
supplied them. In fact Demetrio Sarit, justice of the peace of Kananga,
Leyte, before whom the affidavits were sworn to, testified that the
contents thereof which are in the Cebu-Visayan dialect were read to the
affiants, and that they confirmed the contents thereof as true and correct,
after which they voluntarily affixed their signatures. And although they
signed that several persons were looking at them when they signed their
affidavits at the point of a gun, oddly enough not one of these supposed
onlookers testified in their behalf. Regarding Pore's testimony that he
was informed by the three accused that they were maltreated by the
police, because of which he advised them to secure medical certificates,
the accused failed to produce any medical certificate at the trial attesting
to the alleged injuries. The trial court, therefore, correctly found that the
affidavits in question were freely and voluntarily executed.
In the face of the evidence against the appellant, his avowal of
innocence must be rejected.
ACCORDINGLY, the judgment a quo, in so far as the appellant Gonzalo
Cabiltes is concerned, is affirmed in toto, at the said appellant's cost.
G.R. No. L-21416 December 31, 1965
REPUBLIC OF THE PHILIPPINES, plaintiff-appellant,
vs.
MARCELO B. GARAY, defendant-appellee.
Appeal by the Government, on questions purely of law, from an
amended decision of the Court of First Instance of Manila.
This is an ordinary action for the recovery by the Government of several
sums of money allegedly due from defendant Marcelo B. Garay by way
of deficiency income tax for the years 1946, 1948 and 1949. After
answering the complaint, defendant filed a pleading, which was also,
signed by counsel for the plaintiff stating substantially that, in a
communication dated November 2,1962, the Acting Commissioner of
Internal Revenue — hereinafter referred to as the Commissioner —
demanded from him (defendant) the payment, by way of deficiency
income tax for said years, of the aggregate amount of P14,843.22,
itemized as follows:
1946 P1,207.60
1948 9,642.67
1949 3,992.95
including 1/2% monthly interest up to June 30, 1960; that on December
18, 1962, defendant agreed to pay said sum of P14,843.22, but
requested that he be allowed to settle his obligation in twelve (12)
equal monthly instalments; and that, in a letter dated January 3, 1963,
the Commissioner had acquiesced to this request, provided that
defendant paid P2,843.22 upon receipt of said letter and the balance of
P12,000 in twelve equal monthly instalments of P1,000 each,
beginning from January 30, 1963, and that defendant's conformity
thereto be expressed in a proper pleading in order that judgment could
be rendered in accordance therewith; and that defendant, accordingly,
confessed judgment in line with this undertaking. Thereupon, the lower
court rendered a decision, the dispositive part of which reads:
WHEREFORE, the above-quoted confession of judgment is hereby
approved and judgment rendered thereon ordering the defendant to
pay to the plaintiff, in accordance with paragraph 3 thereof in relation to
the second paragraph of Annex 6, the sum of P2,843.22 immediately
and the balance of P12,000 in twelve monthly installments of
P1,000.00 beginning January 30, 1963 and every month thereafter
until the said balance is fully paid.
Soon thereafter, plaintiff filed a motion stating that, "due to an
oversight," the lower court had "failed to provide for the surcharges and
interests which defendant became liable under his admission, as ... the
taxes involved were to be paid on instalments," and praying that said
decision be amended to sentence the defendant to pay, also, the
following:
(a) 5% surcharges:
1946 P58.38
1948 408.59
1949 169.19
TOTAL P636.16
(b) 1% monthly
interests:
1946 P1,261.01
1948 1,253.55
1949 519.08
TOTAL P3,033.64
GRAND TOTAL P3,669.80
By an order dated March 15, 1963, the lower court denied the relief
prayed for by the plaintiff, upon the ground that the aforementioned
judgment was "based upon a compromise agreement of the parties"
and that the "suppose surcharges and other penalties now being
claimed by the plaintiff must have been taken into consideration" when
said agreement was entered into and filed with the court. The latter,
however, amended the dispositive part of said decision, by adding
thereto the following:
With the legal rate of interest at six per cent (6%) per annum upon the
amount of P12,000 from the date of this decision until the same shall
have been fully paid.
Hence, this appeal by the plaintiff, who maintains that the decision
appealed from is not based upon a compromise agreement, because
the parties therein had merely agreed to a delay in the payment of the
tax and no advantage to the government would come from such
agreement, and that the same was not signed by the Commissioner.
We find no merit in this pretense. Article 2028 of the Civil Code of the
Philippines provides:
A compromise is a contract whereby the parties, by making reciprocal
concessions, avoid a litigation or put an end to one already
commenced.
It is obvious that the entitled "Confession of Judgment," filed by the
defendant on January 15, 1963, and bearing, not only the signature of
his counsel, but, also, that of counsel for the Commissioner, partook of
the nature of a compromise, for, in consideration of defendant's
recognition of his obligation to pay the aforementioned sum of
P14,843.22, and the Commissioner's willingness to allow its payment
on installments, both had agreed to put an end to the present litigation,
thru the rendition of a specific request for "a sort of compromise
agreement," which was expressly "granted," in the letter of the
Commissioner dated January 3, 1963. Then, also, plaintiff derived from
said agreement the advantage of collecting P2,843.22, upon receipt of
said letter by the defendant, aside from putting an end to the litigation
and the assurance of monthly collections of P1,000 for one year.
Again, although the motion captioned "Confession of Judgment" was
not signed by the Commissioner, his letter of January 3, 1963,
annexed to said motion, and, accordingly, forming part thereof, bears
his signature.
The decision appealed from is, accordingly, affirmed without special
pronouncement as to costs. It is so ordered.
Bengzon, C.J., Bautista Angelo, Reyes, J.B.L., Barrera, Dizon,
Makalintal, Bengzon, J.P. and Zaldivar concur.
G.R. No. L-51461 April 26, 1991
CRISPIN DASALLA, SR., petitioner,
vs.
COURT OF FIRST INSTANCE OF NUEVA ECIJA, Branch IV and
ROGELIO SUMANGIL, respondents.
This is a direct appeal from the Order of the Court of First Instance
(now Regional Trial Court) of Nueva Ecija, Guimba, dismissing the
complaint filed by herein petitioner, Crispin Dasalla, Sr.
The complaint sought to recover damages sustained for the death of
Dasalla's son who died when the passenger jeepney driven and owned
by Sumangil figured in an accident. The complaint prayed for payment
of P30,000.00 moral damages; exemplary damages in an amount left
to the discretion of the court, attorney's fees of P5,000.00 and costs (p.
14, Rollo).
In his answer, Sumangil prayed for the dismissal of the complaint. He
denied the allegations of the complaint and alleged that this civil
obligations to Dasalla was already settled; and that the latter executed
an affidavit condoning, waiving and forgiving all others damages he
may be entitled to after receipt of P6,000.00 from the former.
Before the scheduled hearing of the complaint, on September 14,
1978, Sumangil filed a motion for preliminary hearing of the affirmative
defense. On January 26, 1979, the trial court issued an order
dismissing the complaint.
ORDER
When this case was called for preliminary hearing today, the
defendant, thru counsel, resuscitated his defense for the dismissal of
this case on the ground that there has been payment of the obligation
stated in the complaint. As evidence, he presented Exhibit 1, which is
the Pinanumpaang Salaysay, executed by the plaintiff Crispin Dasalla,
Sr., before the Office of the Provincial Fiscal Guimba, Nueva Ecija. The
said Exhibit 1 specifically and categorically states in par. 5 that, "Na
tinanggap ko ngayon ika-14 ng Hunyo, 1976 kay Rogelio Sumangil and
halagang LIMANG LIBO at LIMANG DAAN PISO (P5,500,00), sa
nabanggit na areglo namin, at sang-ayon sa aming usapan pa rin
ibibigay niya sa akin ang halagang P500.00 sa o bago dumating ang
ika-31 ng Enero, 1977, sa Baloy Cuyapo, Nueva Ecija;" In the other
paragraph of d Exhibit 1, specifically par. 4, it states the following; "Na
pinatutunayan ko sa pamamagitan ng kasulatang ito na ang aming
usapan ay bibigyan tulong ako sa pamamagitan ng pagbabayad ng
danyos na ANIM NA LIBONG PISO (P6,000.00) Salaping Pilipino, at
pagkatapos into ay wala na kaming habol pa laban sa kay Rogelio
Sumangil na anumang danyos o paghahabol." It has been further
proven by the defendant that the balance of P500.00 has already been
paid.
To rebut this evidence presented by the defendant during this
preliminary hearing, counsel for the plaintiff presented the plaintiff
himself who testified that allegedly, Exhibit 1 was signed by him based
on information that he was being given the amount for the awe purpose
of the accused not going to jail. Upon cross-examination, however, by
this Court, said witness reluctantly admired that he knew that the
amount given to him has a direct connection with the death of his son.
WHEREFORE, based on the preponderance of the evidence
presented by the defendant, thru counsel, especially Exhibit 1, which
has been executed by the witness, Crispin Dasalla, Sr., a first year
high school and presumably knew what has been contained in said
document, the Court hereby dismisses this complaint on the ground
that the obligation has been fully paid as to the date of the execution of
Exhibit 1. With costs against the plaintiff.
IT IS SO ORDERED. (pp. 22-23, Rollo)
From the order of dismissal, Dasalla directly appealed to Us. On
January 21, 1980, We required the respondent to comment on the
petition which he complied with on March 12, 1980 (p. 53-57, Rollo).
The only issue raised in this petition is whether or not the "Sinumpaang
Salaysay" (pp. 6-7, Petition) which was made the basis of the dismissal
of the complaint by the trial court, is contrary to law, public order, public
policy, morals or good customs, or prejudicial to a third person with a
right recognized by law.
There is no law which prohibits a person who has incurred damages by
reason of the act of another from waiving whatever' rights he may have
against the latter. If the act causing damage to another also constitutes
a crime, the civil liability arising from the criminal act may also be
validly waived.
What is not allowed in this jurisdiction is to compromise or to waive the
criminal aspect of a case.1âwphi1 The reason or principle underlying
the difference between rights which may be waived and rights which
may not be waived is that those rights which may be waived are
personal, while those rights which may not be waived involve public
interest which may be affected. (Moran, Rules of Court, Vol. 2, p. 748,
1952 Edition, cited in L.B. Reyes, The Revised Penal Code, Eleventh
Edition, Revised 1977, p. 5).
In a compromise or a waiver of the civil aspect of the case, the
restriction imposed by law is that it must be entered into before or
during litigation, never after final judgment (Romero v. Amparo, 91
Phil., 228). A compromise on the civil aspect of a case is valid even if it
turns out to be unsatisfactory to either or both of the parties (Castro v.
Castro, 97 Phil., 705). The case of Balite v. People, (L-21475, Sept. 30,
1966, 18 SCRA 280, 290) enumerated the reasons to support the
conclusion that civil liability may be waived or condoned:
. . ., express condonation by the offended party has the effect of
waiving civil liability with regard to the interest of the injured party
(Article 23, Revised Penal Code). For, civil liability arising from an
offense is extinguished in the same manner as other obligations, in
accordance with the provisions of the civil law (Art. 112, Revised Penal
Code. See also Article 2034, Civil Code which reads: "There may be a
compromise upon the civil liability arising from an offense; but such
compromise shall not extinguish the public action for the imposition of
the legal penalty").
It is true, as alleged by petitioner, that the minimum amount of
compensatory damages for death that may be awarded to petitioner at
the time of the death of his son is P12,000.00. However, for reasons
stated in the "Sinumpaang Salaysay," petitioner voluntarily released
the private respondent from his civil obligations. The "Sinumpaang
Salaysay", presented in court and admitted by him, states:
PINANUMPAANG SALAYSAY
AKO, CRISPIN DASALLA, SR., Filipino, may sapat na gulang, may
asawa at naninirahan sa Baloy Cuyapo, Nueva Ecija, pagkatapos kong
manumpa sang-ayon sa batas, ay buong laya at kusang loob kong
isinasalaysay ang mga sumusunod:
1. Na ako ang ama ni Crispin Dasalla, Jr., na namatay sa isang
aksidente (jeep) sa Baloy Cuyapo, Nueva Ecija, noong ika-15 ng
Pebrero 1976;
2. Na dahil dito ay nagsampa ako ng isang asunto criminal bilang Crim.
Case No. 526-G laban kay Rogelio E. Sumangil, na siyang
nagmamaneho ng nabanggit na sasakyan;
3. Na dahilan sa mga pakiusap ni Rogelio Sumangil sampu ng
kaniyang mga amain at magulang, at sapagkat hindi naman kami iba-
iba at mga kamag-anak ko rin ang kanyang kamag-anak, ay
iginagawad ko ang pagpapatawad sa kanya (Rogelio) pagkatapos na
binigyan nila ako ng gugulin o danyos at ako ay lumagda sa isang pag
urong ng nabanggit na demands;
4. Na pinatutunayan ko sa pamamagitan ng kasulatang ito na ang
aming usapan ay bibigyan tulong ako sa pamamagitan ng pagbabayad
ng danyos na ANIM NA LIBONG PISO (P6,000.00) Salaping Pilipino,
at pagkatapos nito ay wala na kaming habol pa laban sa kay Rogelio
Sumangil na anumang danyos o paghahabol;
5. Na tinanggap ko ngayong ika-14 ng Hunyo, 1976 kay Rogelio
Sumangil ang halagang LIMANG LIBO at LIMANG DAAN PISO
(P5,500.00), sa nabanggit na areglo namin, at sang-ayon sa aming
usapan parin ay ibibigay niya sa akin ang halagang P500.00 sa o bago
dumating ang ika-31 ng Enero, 1977, sa Baloy Cuyapo, Nueva Ecija
6. Na dahil dito, at sapagkat ang nabanggit na asunto criminal laban
kay Rogelio Sumangil ay pinawalang-saysay na, ay muli kong
pinagtitibay ang aking nilagdaan na "Affidavit of Desistance" sa harap
ng piskal noong ika-5 ng Mayo, 1975;
7. Na wala na akong paghahabol pa, maging ang aking asawang si
Regina Diascan laban kay Rogelio Sumangil ay buong laya akong
tumatalima sa anumang hatol ng Hukuman sa nabanggit na asunto ng
petsa Mayo 17, 1976. "SA KATUNAYAN NG LAHAT, lumagda ako sa
ibaba nito ngayong ika-14 ng Hunyo, 1976 dito sa Guimba, Nueva
Ecija.
(Sgd.) CRISPIN DASALLA, SR.
SUBSCRIBED AND SWORN TO before me this 14th day of June,
1976 at Guimba, Nueva Ecija.
(Sgd.) JOSUE C. GASPAR
(pp. 19-20, Rollo)
It is Our opinion that the above affidavit executed by the petitioner,
releasing the respondent from additional civil liability arising from the
death of the former's son, is legal. It is not contrary to law, morals,
good customs, public policy or public order. Consequently, he can no
longer institute a complaint to recover damages arising from the same
incident subject of the affidavit.
A party to the settlement cannot be allowed to renege on his
undertaking therein after receiving the benefits thereof. As long as the
parties entered into the settlement voluntarily and intelligently, the
courts are bound to respect the agreement.
ACCORDINGLY, the petition is DISMISSED. No costs.
SO ORDERED.
Narvasa, Cruz, Gancayco and Griño- Aquino, JJ., concur.
G.R. No. L-11943 December 21, 1918
MARIA FERRER, in her own behalf and as administratrix of the
intestate estate of Mariano Trias, plaintiff-appellant,
vs.
MARIA IGNACIO, ET AL., defendants-appellees.
On December 21, 1908 or 1910, the Court of First Instance of Cavite
rendered two judgments in favor of the spouses Mariano Trias and Maria
Ferrer, and against the brothers Buenaventura Dimaguila and Perfecto
Dimaguila, in the total sum of P13,500.
To satisfy these judgments, the sheriff attached the five parcels of land
described with the letters (a), (b), (c), (d), and (e) in paragraph 4 of the
complaint. At a public auction, the said parcels were sold to different
persons, and the total price of P2,750 was realized from the sale of the
parcels (a), (b), (c), and (d).
In another case instituted in the Court of First Instance of Laguna
between Emilio Buenaventura as plaintiff and the same brothers,
Perfecto Dimaguila and Buenaventura Dimaguila, as defendants, a
judgment was rendered in favor of the former. To satisfy this judgment,
four parcels of land described with the numbers (1), (2), (3), and (4) in
paragraph 6 of the complaint were sold at public auction. At the instance
of Mariano Trias, the right to repurchase, which the Dimaguila brothers
had over these parcels of land, was likewise sold at public auction,
adjudicating it to the same Mariano Trias for the sum of P150. Mariano
Trias redeemed these lands from the purchasers at the public sale, and
later sold them for P3,700.
Subsequently, Maria Ignacio, the mother of Perfecto Dimaguila and
Buenaventura Dimaguila, claiming to be the owner of the lands sold by
the sheriff at public auction, as lands belonging to Perfecto Dimaguila
and Buenaventura Dimaguila, brought an action to recover said lands
against the spouses Mariano Trias and Maria Ferrer, and the sheriff who
sold the lands. Pending this litigations, the spouses Mariano Trias and
Maria Ferrer, parties of the first part, and Maria Ignacio, Perfecto
Dimaguila, and Buenaventura Dimaguila, as principal obligors, and
Pedro Guevara as surety, parties of the second part, executed a
compromise agreement (Exhibit A), on February 6, 1912, whereby said
litigation was terminated.
In this compromise agreement, Maria Ignacio, Perfecto Dimaguila, and
Buenaventura Dimaguila bound themselves to pay jointly and severally
to Mariano Trias the amount of P13,500; to redeem the parcels of land
described with the letters (a), (b), (c), and (d) in paragraph 4 and all the
parcels described in paragraph 6 of the complaint, retaining and
deducting from the amount of P13,500 the amount of P6,450, which is
the total amount that should be paid to the purchasers in redeeming from
them the said lands. Because the amount of P2,000 was formerly paid
to Mariano Trias, this amount should likewise be deducted from the
amount of P13,500, thereby leaving a total balance of P5,050. Maria
Ignacio, Buenaventura Dimaguila, Perfecto Dimaguila, and Pedro
Guevara jointly and severally bound themselves, the first three as
principal obligors and the latter as solidary surety, to pay to the spouses
Mariano Trias and Maria Ferrer this balance of P5,050, within a period
of one year and a half, to be counted from the date of the agreement,
that is, from July 6, 1913.
Mariano Trias and Maria Ferrer, after recognizing Maria Ignacio's title to
the parcels of land referred to in the agreement, bound themselves, in
turn, to cooperate, with all the means in their power, in redeeming the
said lands.
About the 29th day of December, 1913, Buenaventura Dimaguila paid
to Mariano Trias the amount of P500 on account of the balance of
P5,050. Mariano Trias died in February, 1914. Up to this time, the
parcels of land had not been redeemed, and the period within which to
exercise the right of redemption over the lands described in paragraph
4 of the complaint appears to have already lapsed since the date of the
agreement, and the parcels described in paragraph 6 of the complaint
had been sold in an absolute sale by Mariano Trias. The purchasers of
all these parcels refused to allow their redemption.
The plaintiff, for herself and as administratrix of the estate of Mariano
Trias, now brings this action against the defendants, Maria Ignacio,
Buenaventura Dimaguila, Perfecto Dimaguila, and Pedro Guevara to
recover from the said defendants the amount of P5,050 with interest
thereon. The defendants, in their cross complaint, claim from the plaintiff
the payment of the amount of P13,250 as damages, for the reason that
the plaintiff failed to redeem the lands. The court absolved the
defendants Maria Ignacio and Pedro Guevara from the complaint;
condemned the defendants Perfecto Dimaguila and Buenaventura
Dimaguila, to pay to the plaintiff, within the period of ten days
immediately following the date of the rendition of the judgment, the
amount of P3,530 with legal interest thereon from December 15, 1914;
ordered that proofs be taken to determine the value of the lands in
question at the time of their sale, and that the plaintiff pay to Maria
Ignacio, by way of damages, the value of said lands; ordered that after
the plaintiff shall have made this payment, the defendants Dimaguila
should in turn pay to the plaintiff the amount of P4,770. From this
judgment the plaintiff appealed.itc-alf
The plaintiff's action as well as the defendants' cross complaint depend
entirely as to whether or not the spouses Mariano Trias and Maria Ferrer
have complied with their obligation with regard to the redemption of the
lands referred to in the compromise agreement. To decide this question,
it is necessary to determine the nature and scope of this obligation. The
compromise agreement contains the following clause:
. . . the parties of the first part (Maria Ignacio, Buenaventura Dimaguila,
and Perfecto Dimaguila) promising to accomplish the redemption of all
the parcels of land sold from the respective purchasers mentioned in this
paragraph, with the cooperation of Mr. Mariano Trias who will use all the
means within his power to effect the redemption.
The defendants claim, and the lower court agrees with them, that this
clause imposes upon the plaintiff (by plaintiff we refer to the spouses
Mariano Trias and Maria Ferrer) the obligation to effect in fact the
redemption of the lands, and unless this redemption is effected and the
lands are delivered to Maria Ignacio, it can not be said that the plaintiff
has complied with her obligation. And, as the redemption of these lands
is now legally impossible, because some parcels were sold in an
absolute sale, and as regards the other parcels the right to redeem them
had already been extinguished, the defendants allege that it should be
considered that the plaintiff has already violated her obligation. We
believe that this interpretation of the contract is absolutely unfounded.
We can readily say that the literal wording of the contract itself rejects
this interpretation, as the contract shows that the defendants are the
ones who bound themselves to make the redemption and that the
plaintiff only promised to cooperate with the defendants towards this
purpose. It is sufficient for the plaintiff that she use all the means within
her power, and it is not required that this cooperation on her part will
result precisely in the redemption of the said lands. And, if the wording
of the contract is clear in this sense, the intention of the contracting
parties which can be deduced from the other clauses is no less clear.
We accept the facts as true that the defendants, upon entering into the
agreement, knew that the period within which the repurchase of the
lands described in paragraph 4 of the complaint and sold by the sheriff
could be effected had already expired, and that the lands described in
paragraph 6 of the complaint and sold by the plaintiff had been sold in
an absolute sale. As may readily be seen, in the contract the plaintiff
does not make any statement which expressly or impliedly may induce
the defendants to believe otherwise. It should be presumed, on the other
hand, that he who contracts and assumes an obligation knows the real
circumstances under which such an obligation is to be complied with.
Consequently, it must be supposed that the defendants in assuming the
obligation to redeem these lands should have known the conditions
under which this redemption could be made. The contrary view would
imply, on the part of the defendants, the incredible improvidence of
having entered into a compromise agreement regarding the redemption
of certain lands without acquainting themselves with the conditions
under which this redemption could be effected. Moreover, with regard to
the lands described in paragraph 4 of the complaint, which have been
sold by the sheriff as property of the Dimaguila brothers to satisfy the
judgment rendered against them and in favor of the plaintiff, the latter
was not the one who had the right to redeem but the defendants
Dimaguila. The latter should have known better than the plaintiff as to
whether this right of repurchase had already been forfeited. With regard
to the other lands described in paragraph 6 of the complaint, and sold
by the plaintiff, the defendants should have known also that such lands
had been sold in an absolute sale. If the idea of the defendants was that
these lands had been sold with pacto de retro and this pacto was then
in force, it is not explained that they were obliged to effect the
redemption, they not being the ones entitled to redeem. Instead, they
only required the plaintiff's cooperation in effecting the redemption, when
as the plaintiff was the one who had the right to repurchase, this
cooperation was not sufficient, but it was necessary, in order to effect
the redemption of these lands, that the plaintiff should exercise in fact
this right.
It is to be inferred from the foregoing that the redemption of which the
contract speaks should not be, in the contemplation of the parties, the
legal redemption but a redemption purely voluntary on the part of the
purchasers. And if this interpretation is the one that should be given to
the contract, as we believe it is, it seems clear that the plaintiff in binding
herself to cooperate with the defendants did not understand that she was
obliged to effect in fact the redemption, inasmuch as she could not
reasonably oblige herself to do so, as the redemption did not depend
upon her own will but upon of the purchasers. Aside from the fact that
the word "cooperate," in itself, does not have this scope, the
circumstances which we have explained show, moreover, that the
contracting parties should not have given to this word such a
scope.lawphi1.net
But, even supposing that the defendants, in entering into this agreement,
believed that the lands could be legally redeemed, another reasoning
brings us to the same conclusion.
After declaring in the contract that they bound themselves to pay to the
plaintiff the amount of P13,500, the defendants make it appear that from
this amount they withheld P6,450, which is precisely the total price of the
lands that had to be redeemed with a view to using the said amount in
the redemption thereof. The fact that the defendants have placed in their
own hands the means by which they could effect the redemption
indicated clearly that they believed that they were the ones that had to
make the redemption. Likewise, the fact that the defendants took from
the plaintiff these means shows that they understood that it was not the
plaintiff who should effect the redemption.
Referring to the lands described in paragraph 4 of the complaint, this
conclusion is more evident. As we have said, with regard to these lands
the plaintiff was not the one entitled to effect the redemption but the
defendants, the Dimaguila brothers. If, in addition to the fact that the
plaintiff was not the one entitled to make the redemption but the
defendants, the Dimaguila brothers, the latter retained the amount with
which the redemption should be made, the claim of the defendants that,
according to the contract, it is the plaintiff who should make the
redemption, appears without a foundation. any interpretation of the
contract which leads to an absurdity should be rejected, and that
interpretation which is reasonable and just should be preferred. It seems
to us absurd that the plaintiff has bound herself to do what she did not
have the right to do and after she had parted with the means with which
to accomplish the act. But, it seems reasonable and just that the
defendants who were the ones entitled to effect the redemption and who
had the money to do so were the ones who bound themselves to
redeem.
Although this reasoning is not entirely applicable to the lands described
in paragraph 6 of the complaint, in which the same circumstances do not
concur, nevertheless, we can infer that, as the redemption refers to all
the lands, we should interpret it in the same manner with respect to all
the lands.
This conclusion is strengthened by the facts that he defendants, through
Buenaventura Dimaguila, complied in part with their obligation, paying
to the plaintiff P500 on account of the amount of P5,050, almost two
years after the execution of the contract, a sufficient time, at all events,
to create with good foundation the supposition that the defendants, in
making this partial payment, should have already known that the lands
were not yet redeemed; that they could not yet be legally redeemed; and
that the purchasers did not permit the redemption. Notwithstanding this,
according to a witness who was present at the time this payment was
made, Buenaventura Dimaguila then made no protest whatever against
the plaintiff's failure to comply with the contract. This proves that the
defendants did not claim up to that date that the plaintiff, by virtue of the
contract, was obliged to actually redeem the lands.
We have reached this conclusion, taking into account the fact that the
case treats of a compromise agreement whereby the plaintiff and the
defendants have put an end to a litigation, and that this class of contracts
is to be strictly interpreted, and must be understood as including only
matters specifically determined therein or which by necessary inference
from its wording must be deemed included. (Art. 1815, Civil Code.)
At all events, supposing that the defendants executed the contract under
the impression that the right to redeem the parcels of land was still
subsisting, as it does not appear that the plaintiff has induced them into
this belief, this fact, at most, constitutes an error of fact which the
defendants can not set up in this action, it having been the object and
result of the compromise to withdraw the parties from a suit already
commenced. (Art. 1817, Civ. Code.)
It is argued that if the contract is to be interpreted in the manner we have
indicated, the contract would be lacking consideration on the part of
Maria Ignacio. We believe that this contention is also unfounded. In their
answer, the defendants say:
These last three named persons, namely, Mariano Trias, Perfecto
Dimaguila, and Buenaventura Dimaguila, recognizing the right of said
Maria Ignacio over the said lands, on the one hand, and on the other, in
consideration of the fact that Maria Ignacio is the mother of the said
Buenaventura and Perfecto Dimaguila, and for this reason, desired to
free the lands from the effects of the judgment rendered against them in
the suit instituted by Mariano Trias in the Court of First Instance of
Cavite, all realized the necessity of a compromise which would entirely
end all of said litigations and the misunderstandings existing between
the same, without injury to the rights of the parties, if possible.
This does not only give the reason or personnel motive which led Maria
Ignacio to make the compromise, but also demonstrates that as to her
the contract contains a consideration. If she had desired to assume
voluntarily the obligation of her sons, jointly with them, in order to free
them from the effects of the judgment rendered against them, then her
obligation is the obligation of her sons, and the consideration of the
contract as regards the sons should be considered as he consideration
of the contract as to her. And it can not be claimed, nor can it be
successfully claimed, that the obligation of the defendants Dimaguila to
pay to the plaintiff the amount of P13,500, ratified by a final judgment, is
without a consideration.
Moreover, the contract shows other considerations on the part of Maria
Ignacio, which are sufficient to constitute a consideration for the
obligation. By this compromise agreement, the plaintiff and the
defendant have, by mutual concessions, given an end to a litigation.
These concessions are the cause of this class of contracts. The plaintiff
had the right, by virtue of a judgment, to demand at any time the balance
of P5,050 of her credit against the Dimaguila brothers and to proceed to
the execution of the property of the latter in order to recover this amount.
By virtue of the compromise, the plaintiff renounced this right and
granted a period of one and a half years within which to pay this amount.
This was a concession whereby the Dimaguila brothers were, for one
year and a half, freed from the effects of a judgment, thereby giving said
brothers an opportunity to satisfy said judgment before their property
could be proceeded against. According to the admission made by the
defendants, this fact was precisely the principal consideration for which
Maria Ignacio entered into the compromise. And then the plaintiff's
cooperation in effecting the redemption of the lands is another
consideration. If it did not give result, it could have given. The defendants
could have required not only the obligation to cooperate but also the
obligation to effect the redemption itself, but they only demanded the
first. At all events, one or the other, although in different proportion, is a
consideration.
The lower court holds in its decision, and it appears to be the principal
ground for absolving Maria Ignacio from the complaint and awarding to
her the damages prayed for in her cross complaint, that the obligation of
the plaintiff by virtue of the contract is to return the things to the condition
in which they were before the sale of the lands, because, the decision
stated, that the same state of things could have been reached anyway,
if, instead of the compromise, the compromised litigation would have
been continued and decided with the natural result of indemnification for
damages. This reasoning takes for granted that Maria Ignacio is the
owner of the lands and has proofs sufficient to justify her ownership.
However, there is absolutely no foundation in this case for accepting this
supposition, excepting the acknowledgment in the instrument of
compromise, made by the plaintiff in favor of the ownership of Maria
Ignacio. But, if it be supposed that there was no compromise, neither
had there been this acknowledgment. We do not understand why, in
omitting this compromise and this acknowledgment, it can be affirmed in
this case that, had the compromised litigation been continued, it would
surely have resulted in a finding in favor of the ownership of Maria
Ignacio. The acknowledgment by the plaintiff in favor of this ownership
of Maria Ignacio did not precede the compromise; it is the effect of the
compromise. If it had existed before, there would have been no disputed
right, neither, therefore, would there have been any compromise. This
presupposes essentially a doubtful right, which is its object as a contract.
Another allegation of the defendants is that the plaintiff, subsequent to
the compromise, still sold, in an absolute sale, one of the parcels. We
have examined the proofs and found that this sale covered the parcel
(e) which was not included in the compromise. (Par. IX, Exhibit A.)
According to the same proofs of the defendants, Mariano Trias
interviewed personally the purchasers of some of the parcels in order to
negotiate their repurchase, and, as regards the other parcels, whose
purchasers were in Manila, he (Mariano Trias) sent his lawyer, Mr. Joya,
for the same object, because he could not leave the Province of Cavite,
for his duties as provincial governor, as he then was, did not permit him
to do so. We believe that this was substantially a compliance with his
obligation.
For all the foregoing, we hold that the contract, Exhibit A, between the
plaintiff and the defendants is valid; that the obligation imposed upon the
plaintiff by this contract was duly complied with; that the obligation
imposed by the same contract upon the defendants Buenaventura
Dimaguila, Perfecto Dimaguila, and Maria Ignacio, as principals, and
Pedro Guevara, as surety, to pay jointly to the plaintiff the amount of
P5,050 has not been complied with, as to the amount of P4,550.
Therefore, the judgment appealed from is reversed, and the defendants
Buenaventura Dimaguila, Perfecto Dimaguila, Maria Ignacio, as
principal obligors, and Pedro Guevara, as surety, are hereby
condemned to pay jointly and solidarily to the plaintiff the amount of
P4,550, with legal interest thereon at the rate of 6 per cent per annum,
beginning December 15, 1914. The plaintiff is hereby absolved from the
cross complaint. There is no special finding as to costs. So ordered.
G.R. No. L-39669 March 10, 1975
INTERNATIONAL HOTEL CORPORATION, FELIX ANGELO
BAUTISTA, MARIO B. JULIAN, HERMILO T. RODIS, and TESTATE
ESTATE OF JOSE M. VALERO, petitioners,
vs.
HON. ELIAS B. ASUNCION, HON. JORGE R. COQUIA, PACIFIC
HOTEL CORPORATION, BASILIO L. LIRAG, MANUEL M. SISON
and DANILO R. LACERNA, respondents.
Petition for certiorari to nullify and set aside two resolutions dated August
13 and October 21, 1974, the compromise judgment of May 7, 1974 and
the writ of possession of August 15, 1974, all rendered and issued by
the respondent court in Civil Case No. 83690, entitled Reparations
Commission vs. International Hotel Corporation et al. Basic ground of
the petition is that notwithstanding that the said compromise judgment
contains portions not agreed upon by the parties, and affecting
adversely the petitioners, respondent judges, thru their respective
impugned resolutions, denied petitioners' motion for their deletion and
instead issued a writ of possession of the subject premises, a hotel
under construction, in favor of private respondent Pacific Hotel
Corporation.
From the pleadings, We gather that herein petitioners had started the
construction of an hotel on their own land, herein involved, which,
however, was mortgaged to two banks, the Philippine Commercial and
Industrial Bank and the Commercial & Trust Company. In that
construction, they utilized materials purchased from the Reparations
Commission on terms.
We gather also that in above-mentioned Civil Case No. 83690, the
Reparations Commission sued the petitioners and the two banks
alleging that notwithstanding that the purchase price of its materials
bought from it by petitioners had not yet been paid, the two banks were
already taking over the land of petitioners, with the improvements
thereon, by virtue of the mortgages. It further alleged that the mortgages
were null and void, since under the law, the materials purchased by
petitioners remained to be properties of the Commission until fully paid.
It asked the court to recognize and give effect to its preferential position
as creditor as against the banks.
It turned out, however, that the banks had already actually consolidated
petitioners' land and improvements and had, in fact, subsequently sold
them, after Civil Case No. 83690 had already been filed, to respondent
Pacific Hotel Corporation, among whose stockholders are herein
respondents Basilio Lirag, Manuel M. Sison and Danilo Lacerna, who
are also stockholders of petitioner International Hotel Corporation. Upon
learning of this sale, petitioners filed a third-party complaint against
private respondents charging them and the banks, against whom the
corresponding cross-claims were also filed, with having connived and
conspired against them in bad faith and to their prejudice in entering into
such transaction. After issues were joined but before trial could start, a
compromise appears to have been arrived at between herein petitioners
and private respondents, albeit without the participation of the banks and
without the said banks being parties thereto, hence the rendering by the
respondent Judge Jorge R. Coquia of the controversial decision of May
7, 1974 reading thus: têñ.£îhqwâ£
DECISION
Submitted for approval by the parties is the Compromise Agreement,
which reads as follows:
MOTION TO APPROVE COMPROMISE
COME NOW the plaintiff, intervenor, defendants, third-party plaintiffs
and the third-party defendants, assisted by their respective counsel, and
respectfully move for approval by the Honorable Court of the following
compromise agreement:
1. Subject to the terms and conditions hereinafter set forth, Pacific Hotel
Corporation binds itself to sell or reconvey to, and in favor of, the
International Hotel Corporation the parcels of land and improvements
involved in the case at bar for and in consideration of the following:
(a) On or before July 7, 1974, International Hotel Corporation shall pay
back to the Pacific Hotel Corporation, in Philippine currency, the latter's
total investment in said properties, consisting specifically of the following
amounts:
(1) P9,943,754.08, representing the purchase price paid to Commercial
Bank & Trust Company and Philippine Commercial & Industrial Bank
under the Deed of Sale dated October 31, 1973, covering the properties
in question;
(2) P951,285.74, representing interest on the aforesaid purchase price
reckoned at fourteen per centum (14%) per annum from November 1,
1973 to July 7, 1974, subject, however, to adjustment in case of full
payment before July 7, 1974;
(3) P51,360.48, representing the 1974 realty taxes on the properties in
question paid by Pacific Hotel Corporation as evidenced by Real Estate
Tax Receipt No. 050572-A dated April 19, 1974, of the office of the
Treasurer of the City of Manila;
(4) P37,289.08, representing the transfer tax paid under protest under
Ordinance No. 7399 of the City of Manila, as evidenced by OR No.
485191-Q dated November 5, 1973; it is understood third party plaintiffs
shall be subrogated to all the rights and interests of third-party
defendants under the aforesaid protest.
(5) P29,901.00, representing the cost of documentary stamps, plus
P7,714.00, covering the filing fee and other fees in connection with the
registration of the Deed of Sale and issuance of the transfer certificate
of title;
(6) P24,480.00, representing 40 security guard fees actually paid in
connection with the properties in question;
(b) International Hotel Corporation shall likewise pay or refund to Mr.
Basilio L. Lirag the sum of P1,812,800.00, Philippine currency,
representing his equity investment in International Hotel Corporation
including those of Messrs. Manuel M. Sison, Nemesio L. Reyes, Manuel
K. Lirag, Danilo R. Lacerna, Winfred S. Salvacion, and Angelo J. Paras;
2. International Hotel Corporation shall make full payment of the
aforesaid amounts within a non-extendible period ending July 7, 1974,
and such payments shall be in the following manner:
(a) The amounts due in favor of Pacific Hotel Corporation under
paragraph 1(a) above shall be deposited by check in the name and
account of Pacific Hotel Corporation not later than May 15, 1974 in
writing, and said deposit shall not produce the effect of payment except
upon actual clearance of the check so deposited;
(b) The amount referred to in par. 1(b) above shall be deposited by check
in the name and account of Basilio L. Lirag not later than July 7, 1974
with a bank to be designated by him in writing not later than May 15,
1974, and such deposit shall not produce the effect of payment until
actual clearance of the check deposited;
3. Pacific Hotel Corporation shall retain the title to the properties in
question until all the payments hereinabove stated shall have been duly
and fully effected; in the event that said payments are in fact made within
the period and in the manner prescribed above, Pacific Hotel
Corporation shall immediately execute the corresponding deed of sale
or reconveyance in favor of International Hotel Corporation and shall
deliver to the latter the corresponding owners' duplicate of the
certificates of title free and clear of all liens and encumbrances save
those now annotated thereon. The expenses for documentation and
registration shall be for the account of International Corporation;
Messrs. Basilio L. Lirag, Manuel M. Sison, Nemesio L. Reyes Manuel K.
Lirag, Danilo R. Lacerna, Winfred S. Salvacion, and Angelo J. Paras
shall also forthwith surrender to International Hotel Corporation all their
respective certificates of stock covering all the shares of stock now held
by them in International Hotel Corporation for proper disposition of the
latter, if said certificates are still in their possession;
4. In the event that the period prescribed hereinabove expires without
full payment by International Hotel Corporation of the amounts stated in
sub-pars (a) and (b) of par. 1 above, Pacific Hotel Corporation shall
automatically be considered and recognized as the absolute and lawful
owner of the properties in question and shall immediately have the right
to obtain from this Honorable Court a writ of possession without need of
any prior notice or demand to vacate;
5. Third-party plaintiffs and third-party defendants hereby renounce all
other claims and counterclaims against each other in respect to the
subject matter of the present controversy.
6. Pacific Hotel Corporation hereby recognizes the existence of the lien
of Intervenor Western Steel, Inc. upon the unfinished edifice and to pay
the same upon proper determination of the amount thereof, should
Pacific Hotel Corporation's ownership of the properties in question
prevail pursuant to par. 4 above;
7. International Hotel Corporation likewise recognizes said intervenor's
lien and binds itself to pay the same upon proper determination of the
amount thereof;
8. Third party plaintiffs and third party defendants recognize the absolute
ownership of the plaintiffs to the reparations materials, equipment,
technical services and other items which were utilized and availed in the
structure currently erected and existing on the hotel site of the
International Hotel Corporation as well as all other reparations items
already delivered by the plaintiffs to the third party plaintiffs but are not
utilized in said structure and IHC or PHC, as the case may be, shall pay
the claim of the plaintiffs for all said reparations construction materials,
equipment, technical services and other items in the total value, Japan
Port, of US $2,639,832.61 or converted into the Philippine Peso
equivalent thereof on the basis of the free market rate of exchange of
P3.90 to US$1.00 in the amount of P10,294,967.48 plus legal interest
thereon without prejudice to negotiation between plaintiffs and
International Hotel Corporation or Pacific Hotel Corporation as the case
may be for the deletion of such interest.
If payment is to be made in cash, the same shall be made within one
hundred twenty days from the date of order of the Honorable Court
transferring the possession and ownership of the parcels of land in
question either to IHC or PHC.
If payment is to be made in installments at the option of IHC or PHC, as
the case may be, the same shall be for a period of ten years starting
from the date of said order of the Honorable Court, and payment shall
be in ten (10) equal yearly installments subject to the requirements and
conditions imposed by the Reparations Law, as amended.
9. The parties recognize that all the reparations construction materials,
equipment, technical services and other items in the total value, Japan
Port, of P10,294,967.48 already delivered by the Reparations
Commission to the International Hotel Corporation shall be the total
assistance of the Reparations Commission to the hotel project of the
International Hotel Corporation and that no further allocation of
reparations funds shall be asked for and granted to said hotel project,
and that the delivery of said reparations construction materials,
equipment, technical services and other items in the total value, Japan
Port, of P10,294,967.48 40 be the complete delivery of the total
assistance of the Reparations Commission to said hotel project.
10. In the event that the possession and ownership of the parcels if land
in question are transferred to the IHC by this Honorable Court, IHC shall
register with the corresponding Register of Deeds the first mortgage
executed on said parcels of land and improvements thereon which all
the parties recognize the validity and enforceability thereof, said
registration of first mortgage shall be made within fifteen days from date
of said Court order.
In the event that the possession and ownership of said parcels of land
are transferred to the PHC, PHC shall execute a first mortgage on said
parcels of land and the improvements thereon in favor of the
Reparations Commission as security for the payment of the total value
of P10,294,967.48 plus legal interest thereon or submit to the
Reparations Commission other forms of collaterals acceptable to the
Reparations Commission.
11. International Hotel Corporation or Pacific Hotel Corporation, as the
case may be, shall settle all claims of all third party claimants relative to
said reparations construction materials, equipment, technical services
and other items, if there be such third party claimants.
WHEREFORE, it is respectfully prayed that judgment be rendered
approving the foregoing Compromise Agreement, without
pronouncement as to costs.
Manila, Philippines.
May 7,1974.
REPARATIONS COMMISSION Plaintiff by:
(SGD.) RUBEN V. SARMIENTO RUBEN V. SARMIENTO Counsel for
Plaintiff
INTERNATIONAL HOTEL CORPORATION Third-Party Plaintiff
by:
(SGD.) FELIX ANGELO BAUTISTA FELIX ANGELO BAUTISTA As
Third Party Plaintiff and as Attorney-in-fact for Mario B. Julian and Atty.
Hermilo T. Rodis
Assisted by:
(SGD.) SIMEON N. FERRER SIMEON N. FERRER Counsel for Third-
Party Plaintiffs
(SGD.) CELSO ED. F. UNSON CELSO ED. F. UNSON Executor,
Estate of Jose M. Valero
(SGD.) EPHRAIM G. GOCHANGCO EPHRAIM G. GOCHANGCO
Third Party Plaintiff
Assisted by:
AMBROSIO PADILLA LAW OFFICES by:
(SGD.) MAURO C. REYES, JR. MAURO C. REYES, JR.
PACIFIC HOTEL CORPORATION Third Party Defendant by:
(SGD.) WINDRED S. SALVACION WINDRED S. SALVACION Vice
President & Director Attorney-in-Fact
WESTERN STEEL, INC. Intervenor by:
(SGD.) H. R. REYES H. R. REYES President
Assisted by:
(SGD.) CRISPINO P. REYES REYES & BENIPAYO Counsel for
Intervenor
(SGD.) AGUSTIN O. BENITEZ AGUSTIN O. BENITEZ
As Attorney-in-Fact for Third Party Defendants Basilio L. Lirag, Danilo
R. Lacerna, and Manuel M. Sison and as Counsel for Third Party
Defendants' .
Finding the said Compromise Agreement not contrary to law, and in
fact it has settled all the issues, the aforesaid Compromise Agreement
is hereby APPROVED. According to the parties, although the
defendant banks, namely, the Philippine Commercial & Industrial Bank
and the Commercial Bank & Trust Company, have not signed this
agreement, the issues affecting them have become moot and
academic.
In view of said approved Compromise Agreement, the issue raised in
the motion for reconsideration filed by the third-party plaintiffs to file the
injunction bond also becomes moot and academic.
The writ of preliminary injunction, therefore, is set aside.
WHEREFORE, decision is hereby rendered in accordance with the
terms and conditions of said Compromise Agreement.
IT IS SO ORDERED.
(Annex F of Petition, pp. 45-51, Rec.)
Under date of May 14, 1974, petitioners filed a motion for
reconsideration and/or modification of this decision, claiming that:
têñ.£îhqwâ£
1. On May 7, 1974 after five (5) continuous hours of hectic bargaining,
plaintiff, third-party plaintiffs, third-party defendants, and intervenor,
assisted by their respective counsel, finally signed and submitted at
about 1:30 p.m. to this Honorable Court a MOTION TO APPROVE
COMPROMISE AGREEMENT.
2. This Honorable Court having patiently waited for the agreement to
be submitted forthwith approved it. At or about the time such approval
was being dictated in the presence of the parties and their counsel,
undersigned counsel called the attention of this Honorable Court to the
circumstance that the agreement sought to be approved would give
rise only to a partial judgment, the defendant Banks not being
signatories thereto.
3. Third-party plaintiffs are therefore surprised, to say the least, to
receive a copy of this Honorable Court's Decision dated May 7,1974
containing the following provision: têñ.£îhqwâ£
'According to the parties, although the defendant banks, namely, the
Philippine Commercial & Industrial Bank and the Commercial Bank &
Trust Company, have not signed this agreement, the issues affecting
them have become moot and academic.' (Emphasis supplied)
4. The record will show third-party plaintiffs and/or undersigned counsel
never made the foregoing manifestation. On the contrary, regardless of
the outcome of the Compromise Agreement, third-party plaintiffs intend
to prosecute their supplemental Cross-claims as well as their Petition for
Contempt against defendant Banks and their officers concerned.
5. Unless the abovequoted provision of the Decision is deleted
therefrom, third-party plaintiffs International Hotel Corporation and Felix
Angelo Bautista in particular will not deem themselves bound by the
Compromise Agreement. (Pp. 52-53, Rec.)
and praying as follows: têñ.£îhqwâ£
WHEREFORE, it is respectfully prayed that the Decision dated May 7,
1974 be reconsidered and/or modified such that the provision looted in
paragraph 3 above be deleted therefrom and the heading 'Decision' be
changed to 'Partial Judgment'. (P. 53, Rec.)
To this motion, none of the parties filed any opposition, but to this date,
it does not appear that it has been resolved by respondent court.
In the meanwhile, under date of May 8, 1974, the plaintiff in the court
below, the Reparations Commission, also filed its own motion to clarify
and supplement the motion to approve compromise and to modify the
decision of May 7, 1974. Likewise, on May 25, 1974, Francisco G.
Joaquin, Jr. and Rafael Suarez filed a motion to intervene as well as for
reconsideration of the same decision, alleging that as stockholders and
creditors having substantial interest in petitioner corporation,
International Hotel Corporation, they consider the compromise
agreement to be contrary to law and public policy, since it provides for
the return or refund to private individual respondents herein their
contributions to the capital stock, thereby impairing the capital of the
company without regard to and to the prejudice of its creditors, apart
from the fact that the person who signed the said compromise did not
have due authority to do so. And on June 5, 1974, still another party the
Western Steel Inc., an actual intervenor, also move for the
reconsideration of the decision, contending, like petitioners, that there is
no basis for the portion thereof referring to the banks. By an order dated
June 11, 1974 respondent court "considered submitted for resolution" all
these incidents.
As no resolution came forth, however, as of July 3, 1974, and,
apprehensive that they would be made to comply with the terms of
payment specified in the compromise agreement without being assured
that their cross-claims against the banks would be considered as
preserved for further litigation, petitioners filed on said date a "motion to
suspend period of payment under compromise agreement and/or to
extend the same." setting the same for hearing on July 12, 1974. It was
not until July 20, 1974 that respondents filed their opposition. And by
way of counter-move based on the theory that the compromise judgment
had already become final and executory, they also filed on July 22, 1974,
a "motion for issuance of a writ of possession."
Such was the situation when respondent Judge Elias B. Asuncion, who
was acting temporarily in the sala of respondent Judge Coquia, issued
his questioned resolution of August 13, 1974 in which, importantly to be
noted, he expressly deferred action on petitioners' motion for
reconsideration and/or modification dated May 14, 1974 thus:
têñ.£îhqwâ£
MOTION FOR RECONSIDERATION AND/OR FOR MODIFICATION
OF DECISION
filed by third-party plaintiffs with this Court on May 21, 1974.
This motion, as above-indicated, seeks for a reconsideration and/or
modification of the decision rendered by this Court on 7 May 1974 so
that the provision quoted above should be deleted from the judgment
and that the heading 'Decision' be changed to "Partial Judgment. The
Court, however, holds in abeyance resolution of this motion until the
Court shall have a chance to verify from the stenographic notes the
different oral manifestations of the parties preferred during the
discussions made prior to or on the submission of the "Motion To
Approve Compromise". This non-resolution of this motion does not,
however, constitute a legal obstacle to the enforcement of the judgment
based upon the compromise agreement because this particular motion
has no bearing whatever to the principal terms, covenants and
stipulations of the parties contained in the compromise agreement." (P.
84, Rec.)
It does not appear that Intervenor Western Steel's motion similar to that
of petitioners was acted upon, but it is quite obvious that it would have
suffered the same fate as that of petitioners. On the other hand,
however. in the same resolution, the aforementioned motion of the
Reparations Commission, the "motion for leave to intervene and motion
for reconsideration" of Joaquin Jr. and Suarez as well as petitioners'
"motion to suspend period of payment" were all denied, whereas
respondents' motion for the issuance of a writ of possession was
granted.
On August 26, 1974, petitioners moved to reconsider the resolution and
to lift the writ of possession. Plaintiff Reparations Commission filed also
its own motion for reconsideration as did likewise Joaquin Jr. and
Suarez. All these motions for reconsideration were denied by Judge
Coquia, who had already returned then, in his herein assailed resolution
of October 21, 1974.
On the basis of the foregoing facts, petitioners now claim that
respondent court acted with grave abuse of discretion in denying in its
resolutions of August 13 and October 21, 1974 (1) their motion to
suspend or extend the period of payment they are obliged to make under
the compromise agreement, (2) their motion to lift the writ of possession,
and (3) their motion for reconsideration of the resolution of August 13,
1974, and, consequently, in granting respondents' motion for the
issuance of a writ of possession. Petitioners contend that by
interpolating in its decision the disputed portion reading: .têñ.£îhqwâ£
... According to the parties, although the defendant banks, namely the
Philippine Commercial & Industrial Bank and the Commercial Bank &
Trust Company, have not signed this agreement, the issues affecting
them have become moot and academic. (P. 51, Rec.)
the respondent court arbitrarily altered the tenor and substance of the
compromise agreement to their prejudice, since the said portion "served
to dilute the bargain they had struck with herein respondents."
Explaining further, they maintain thus: têñ.£îhqwâ£
The interpolated paragraph substantially varied the terms of the
agreement of the signatories to the MOTION TO APPROVE
COMPROMISE as reproduced in the trial court's Decision dated Ma
1974. Such substantial variance cannot simply be glossed over. To be
sure, as observed during the oral argument before this Honorable Court,
such variance may be of no consequence to herein respondents. It is
crucial however to herein petitioners. To arbitrarily set defendant Banks
scot-free is to chop away at a critical portion of herein petitioners' bargain
without which they would not have signed the aforesaid MOTION TO
APPROVE COMPROMISE. That compromise agreement cannot be
read in a vacuum. It must and should be implemented as an integrated
whole respecting all the rights accorded thereby to all the signatories
thereto. The trial court cannot arbitrarily interpolate and paragraph in
such a compromise agreement anymore than it can issue a writ of
execution which varies the tenor of its judgment." (P. 211, Rec.)
Moreover, petitioners posit that it was a grave because of discretion on
the part of respondent court to issue a writ of possession in favor of
respondent Pacific Hotel Corporation, without first resolving their motion
for reconsideration and/or modification of May 14, 1974 and without
determining definitely whether or not petitioners are entitled to the
complete elimination of the questioned portion above-quoted of the
decision, considering that without such resolution, the decision could not
be final and executory. They argue that for them to have voluntarily
complied with the terms of the agreement, by paving the sums therein
stipulated within the period specified, without the compromise judgment
being modified by eliminating the portion in question, would have meant
that they are admitting that indeed their cross-claims against the banks
had already become moot and academic.
We find such pose of petitioners to be fair and reasonable. The court
itself being uncertain as to whether or not there was any factual basis
for the inclusion in the compromise judgment of the portion objected to
by petitioners, as in fact, it deferred resolution of that point, and since
petitioners had made representations to the respondent court that in
entering into the compromise agreement and in asking for the approval
thereof, they had in mind that what would be rendered would only be a
partial judgment which would preserve their right to proceed against the
cross- defendant banks, and, importantly, they might lose such right if
the portion in controversy were not eliminated, it was but just that before
they are made to comply with the terms of the compromise agreement,
they should be assured that they would not be prejudiced in any way
thereby. The preservation of their cross-claims against the banks may
not have been the main inducement that made the petitioners to agree
to the compromise, but this does not mean that petitioner's' contention
that the untimely and unwarranted declaration in the compromise
judgment that said cross-claims had become moot and academic is
without basis in fact. Common experience alone would dictate that
somehow petitioners must have considered their remaining recourse
against the banks as something that would help them in meeting the
obligations they had incurred to respondents under the compromise
agreement.
But respondents maintain, on the other hand, that it was right and proper
for respondent court to have acted the way it did. Anent petitioners'
motion to suspend, respondents claim that: têñ.£îhqwâ£
(a) The motion was an obvious and belated cover-up of petitioners'
failure to comply with the terms of the Compromise Agreement;
(b) The determination of the period for payment was one of the principal
inducements for private respondents to enter into the amicable
settlement, let alone the very urgent need of rescuing the unfinished
structure from certain ruin;
(c) A suspension of the period could only be validly effected by
agreement of all the parties to the compromise, particularly requiring the
consent of Pacific Hotel Corporation and the plaintiff Reparations
Commission, whose interests were specially involved by the reckoning
of the period.
(d) International Hotel Corporation had actually performed acts
unmistakable revealing its intent to comply with or implement the
Compromise Judgment itself, by exerting efforts to raise the money
called for by said judgment and by actively opposing the motion to set
aside the judgment filed by proposed intervenors Joaquin and Suarez.
(See p. 8, Annex "4" to Answer.)" (P. 5, Respondents' Memo.)
And they would rely on the factual findings of respondent judges to the
effect that: têñ.£îhqwâ£
(a) None of the motions filed by petitioners and the other parties ever
assailed the validity of the compromise judgment on grounds of fraud,
mistake or duress (p. 2, Annex "O").
(b) None of the parties ever contended that the compromise agreement
did not express the true intention or agreement of the parties thereto
(Annex "M", p. 3).
(c) So much time had been allowed by the trial court for petitioners to
pay the amount due, but petitioners had failed to do so (p. 3, Annex "O").
(d) There is an urgent need for construction of more hotels or hotel
rooms in the country (p.3, Annex "O").
(e) The petitioners' motion to suspend the period of payment has no
bearing whatever upon the principal terms, covenants, and stipulations
of the parties (p. 4, Annex "M").
(f) The Reparations Commission itself, as plaintiff, bad moved for the
execution of the judgment and opposed the motion to suspend the
period of payment (p. 3, Annex "O")." (Pp. 6-7, Respondents' Memo.)
In another part of their memorandum, they postulate that: têñ.£îhqwâ£
..., petitioners could have complied with the Compromise Judgment and
still preserved their right to question the validity and binding effect of the
objectionable finding therein, through the simple expedient of protesting
against, or excepting to, or expressly reserving their right to assail, the
said objectionable finding.
4. In any event, the finding in question appears on its face to be a mere
statement of the Court's opinion entirely outside of the matters adjudged.
It may even be conceded that it is a recital not warranted by the text of
the compromise agreement as submitted to the court and clearly
unnecessary to support the judgment rendered. Even supposing,
therefore, that such recital or finding is in conflict with the terms of the
dispositive portion of the judgment which reads: .têñ.£îhqwâ£
'WHEREFORE, decision is hereby rendered in accordance with the
terms and conditions of said Compromise Agreement.'
the same cannot constitute res judicata upon petitioners' rights of action
as asserted in their cross-claims against the Banks. Consequently, no
prejudice is, or has been, actually caused to them by the presence of
such a finding in the Compromise Judgment. Freeman on Judgments is
apropos: têñ.£îhqwâ£
'Recitals in a judgment which are outside the matters in issue and
adjudged are not res judicata. So recitals of the grounds of a general
judgment, where it does not otherwise appear that the matters recited
were actually considered or necessary to support the judgment, are not
conclusive adjudications. And the reasons for making a finding, recited
therein, do not enlarge its res judicata effect; thus the effect of a finding
that defendant in ejectment was not in possession is not enlarged by a
recital therein of the reasons for the finding. Findings contrary to the
judgment are not conclusive as to the matters found...' (2 Freeman on
the Law on Judgments, p. 1483; Emphasis supplied)
In short with or without expunging the questioned finding from the
Compromise Judgment (Annex "F"), petitioners alleged cause of action
against the Banks have neither been diluted nor destroyed. Petitioners
cannot, therefore, use the presence of such finding as an excuse for
non-compliance, or as a ground for treating the Compromise Judgment
as not final and executory, when in fact it is." (Pp. 13-14, id.)
As a final argument, petitioners invoke equity, claiming that it was the
60- day-non-extendible period of payment fixed in the agreement that
was the primary inducement for their having given their conformity to
compromise with petitioners, and it is not just and equitable that the latter
should have the Court declare that such agreed period shall become
operative only from the finality of the judgment approving the
compromise.
We have given serious consideration to all these contentions of
respondents. We are not persuaded, however, that justice is on their
side. We are more inclined to believe as We do hold that the interests of
justice would be best served by granting the petition herein.
After all, it cannot be said that petitioners are the ones to blame for what
has happened. As we see it, the questioned interpolation in the decision
of a virtual dismissal of petitioners' cross-claims against the banks has
no basis and is entirely unwarranted. The allegation of petitioners that
during the negotiations, no mention at all of said cross-claims was ever
made is not disputed by any of the parties. In fact, no one among them,
not even the banks who were the beneficiaries thereof opposed
petitioners' motion for the elimination of such interpolation. Besides, the
respondent court knew all the time ought to have known that the motion
for approval of the compromise agreement was signed only by
petitioners, as third-party plaintiffs and respondents, as third-party
defendants. In other words, the banks were parties neither to the
agreement nor to the motion to approve the same.
Just how it occurred to respondent Judge Coquia to declare in effect that
by agreement of the parties, "the issues affecting them (the banks) have
become moot and academic" is beyond comprehension. More
incomprehensible is the attitude of respondent court of not immediately
attending to the plea of petitioners that such unwarranted interpolation
would impair their position to comply with the agreement and of not
seeing to it that the compromise judgment did not contain more or less
than what the compromise agreement provides. It is grave abuse of
discretion for a court to render a compromise judgment which includes
terms not agreed upon by the parties, unless these are required by the
law or by the rules to be included or are a necessary consequence of
the stipulations thereof. Certainly, the abuse is graver when a motion to
correct the error is met practically with indifference and either lack of
sympathy for the party who expresses fears of being injured or placed
at a disadvantage by the baseless additions made by the court.
Indeed, respondents themselves could have remedied the situation by
forthwith joining petitioners in their motion for modification rather than
insisting on executing the agreement and demanding from petitioners
their "pound of flesh...according to letter of the bond." .
Respondents insist that actually, the interpolation in question is in law
harmless and could not prejudice petitioners whether on the basis of
estoppel or res adjudicata. Whatever merit there may be in such a
proposition is beside the point. What is important is that respondent court
refused to act on petitioners plea that it be eliminated before the decision
is executed. Under the circumstances, how could petitioners be
convinced that the court had no point in making the pronouncements
they were objecting too. It must be borne in mind, in this connection, that
in any subsequent incident involving the point in issue, it would be the
same court that would make the ruling and not the respondents. It is true
that respondent Judge Asuncion did make the observation in his
resolution of August 13, 1974 that the "non-resolution (of petitioners'
motion for modification) does not however constitute a legal obstacle to
the enforcement of the judgment because this particular motion has no
bearing whatever to the principal terms, covenants and stipulations of
the parties contained in the compromise agreement," but such a
simplistic approach overlooks and disregards entirely the fundamental
point that in entering into the agreement, petitioners were banking, so
they contend and nobody can claim otherwise, on obtaining the relief
prayed for in their cross-claims against the banks. It should be noted that
in truth, the cross-claims against the banks alleged connivance by the
cross-defendants with the third-party defendants, and since the
compromise amounted to an abandonment of the claims against the
respondents for their part in the conspiracy, it stands to reason that
petitioners could have agreed to such abandonment provided they could
continue with their pending claims against the banks. It was, therefore,
unjust and inequitable for the respondent court to have declared the
compromise judgment final and executory and to have issued the writ of
possession, without making sure that petitioners were not to be
adversely affected by such officious action.
At the time the respondent court issued the writ of possession,
petitioners motion for modification was still unresolved. In fact, it has
remained unresolved until now. In this connection, it is Our considered
view, and so We hold, that the compromise judgment was not yet final
then. Respondent court had virtually included in the compromise
agreement something substantial, as far as petitioners are concerned,
without the prior consent of either said petitioners or even the
respondents. While the dispositive part of the decision simply says that
"decision is hereby rendered in accordance with the terms and
conditions of said Compromise Agreement", it must be borne in mind
that in referring to the cross-claims against the banks, the decision states
that their being moot and academic is "according to the parties," which
readily implies concordance among them. With this circumstance in
view, an ambiguity has arisen as to what the judge meant by "said
Compromise Agreement." It was the inescapable duty of the court to
clarify that ambiguity without loss of time, and since it failed to do so,
petitioners are entitled to relief. We hold, therefore, that the writ of
possession in issue here was illegally and invalidly issued, the
compromise judgment not having become final yet, precisely because
of the failure of the respondent court to act on petitioners' motion for
modification, and consequently, in seeking the issuance and taking
advantage of said writ, respondents did so at their own risk, specially
because no counterclaim has been alleged by them against petitioners
in this case.
WHEREFORE, judgment is hereby rendered granting the petition herein
in the sense that (1) the resolutions of August 3, 1974 and October 21,
1974, insofar as petitioners are concerned, as well as the writ of
possession are set aside, but petitioners may not retake possession of
the premises until after they have paid the amounts specified in the
compromise agreement within 60 days from the time this decision
becomes final; (2) decision of the trial court of May 7, 1974 is hereby
modified by eliminating completely the portion thereof stating that
"According to the parties, although the defendant banks, namely, the
Philippine Commercial & Industrial Bank and the Commercial Bank &
Trust Company, have not signed this agreement, the issues affecting
them have become moot and academic"; and (3) the respondents shall
deliver possession of the premises, subject-matter of this case, as is, but
as a matter of equity, the rights, if any exist, of respondents to recover
in a separate action the value of any improvements it may have
introduced which will redound to the benefit of petitioners is hereby
reserved.
No costs.
G.R. No. L-5603 March 22, 1910
WALTER E. OLSEN AND CO., plaintiffs-appellees,
vs.
THE INSULAR COLLECTOR OF CUSTOMS, defendant-appellant.
This is an appeal from a judgment of the Court of First Instance which
overruled a decision of the Insular Collector of Customs, requiring
payment of duty upon certain packing cases, under Rule 18 of the
Tariff Revision Law of 1905.
The respondents, Walter E. Olsen and Co., imported into the Philippine
Islands certain manufactured tobacco, which was classified by the
Collector of Customs at the port of Manila under paragraph 364 of the
Tariff Law as "Tobacco . . . (b) manufactured, net weight, kilo, one
dollar."
The tobacco was packed in a small cotton sacks, a number of which tin
boxes were inclosed in a wooden box or packing case, which was
securely fastened for shipment. The Collector of Customs included the
weight of the tin boxes in the dutiable weight of the tobacco. Against
this ruling the importers protested, on the ground "that the tin casing in
which the sacks of tobacco were inclosed should not be figured and
included as net weight; of the tobacco, but should be classified under
its own weight; that the immediate receptacle of the tobacco is the
sacks in which the tobacco is packed." In overruling this protest the
Insular Collector of Customs said:
The importation in question consists of certain smoking tobacco
packed in small cotton sacks, a number of which constitute the
contents of small tin boxes, there being several of these tin boxes
packed in a wooden case. The importers' contention being that the
dutiable weight should be that of the tobacco, together with the cotton
sacks, and that the interior tin cases, as well as the wooden cases,
should be considered as common exterior coverings. . . . Rule 18 of
the Tariff Revision Law of 1905 reads: "In number be dutiable upon net
weight, the dutiable weight of such merchandise shall not include the
weight of any common exterior cover . . . but shall include all interior or
immediate receptacles." This shipment of tobacco was packed in (1) a
"common exterior covering," consisting of a wooden cases packed in
the wooden case; and (3) in "immediate receptacles," consisting of
cotton sacks. In the opinion of the undersigned, the wording of the law
is too clear and explicit to permit a doubt as to the proper classification
of any of the three kinds of receptacles mentioned. In the liquidation of
the entry concerned the dutiable weight of the common exterior
covering (the wooden packing case) was not included in the dutiable
weight of the merchandise, but, following Rule 18, there was included
therein "all interior or immediate receptacles" (the tin cases and cotton
sacks), which is deemed to be the proper classification indicated by
said rule.
From this decision an appeal was taken to the Court of First Instance,
which reversed the ruling of the Collector. The court said:
Considering, then, that to the net weight of the tobacco the only thing
which must be added to it under this rule for the purpose of
determining its weight must be the interior or immediate receptacle,
there can be but one interior or immediate receptacle, and every cover
or receptacle which is added to the interior or immediate receptacle is
an exterior cover. In this case the tobacco being contained in cloth
sacks or bags, such cloth sacks or bags are the immediate interior
receptacles, and if these are inclosed in tin cases the tin cases become
an exterior receptacle, and if the tin cases are again inclosed in
wooden cases or boxes, such wooden cases or boxes become an
additional exterior covering, and all the exterior covers should be
excluded from the net weight of the dutiable article. The Collector of
Customs in his decision seems to have proceeded upon the reverse
order, and, excluding the common exterior cover, finds all within it
interior or immediate receptacles, and includes them in the weight of
the article to determine its net weight. I am of the opinion that this error
from the very language of the rule, which says that "the dutiable weight
of such merchandise shall not include the weight of any exterior cover."
A statute, such as that the Rule 18, should be construed in a broad and
liberal way. The particular sentence or phrase under consideration
should be read in connection with other provisions of the statute of
which it forms a part. The Act attempts to provide specific rules for the
levying and adjusting of duties on packing, packages, and receptacles
for dutiable goods. The general rule is first states that "common
merchandise in use and imported with such merchandise shall be
dutiable under their corresponding paragraphs of the Tariff except in
cases of goods dutiable by gross weight or ad valorem." If the
merchandise is dutiable upon the gross weight, the dutiable weight
"shall include the weight of all covers, receptacles, wrappers,
packages, and packing of every description, whether exterior, interior,
or immediate, without any allowance for tare." If the merchandise is
dutiable upon the net weight, "the dutiable weight of such merchandise
shall not include the weight of any common exterior cover, receptacle,
package, wrappers, or packing, but shall include all interior or
immediate receptacles," that is, packing, receptacles and coverings
shall pay duty as such under the proper paragraph of the law, except
when the goods in the cover or receptacle are dutiable by gross weight
or ad valorem, in which case the coverings and packings of every
nature are included in the weight upon which the duty is estimated. A
distinction is made between exterior, interior and immediate
receptacles, and it is evident that these words as here used are not
synonymous. It is a recognition of the fact that the importer may pack
his goods for shipment in such manner that there may be either
exterior, interior, or immediate, as well as exterior or immediate
receptacles. If the merchandise is dutiable upon the net weight, the
dutiable weight shall not include any common exterior covering,
receptacle, package, wrapper, or packing, but shall include all interior
or immediate receptacles.
The articles under consideration were dutiable upon their net weight.
The law recognizes that they may be so packed that there will be
exterior, interior and immediate receptacles. The shipper may pack his
goods as his interest or convenience dictates. The common exterior
cover must be excluded, and the immediate receptacle must be
included in the dutiable weight. If the shipper thinks it to his advantage
to inclose certain of the immediate receptacles in a receptacle common
to them only, he may import them in that form, because the exterior
cover is then the common cover of the immediate receptacles. If he
chooses to make these packages into one large package with an
exterior cover common to them all, what were originally common
covers become interior receptacles of the immediate receptacles, with
an exterior common cover of them all. Rule 18 then says that the net
weight of the dutiable merchandise shall include all of these interior or
immediate receptacles. This means all interior receptacles and all
immediate receptacles. To construe the words "interior" and
"immediate" as synonymous would be to render the phrase
meaningless and to lose sight of the fact that the statute in the
preceding paragraph clearly recognizes the difference between interior
and immediate receptacles. We therefore construe Rule 18 to mean
that the exterior covering when common to all shall be included, and all
other receptacles, whether interior or immediate, shall be included in
the dutiable weight of the merchandise.
The court below held each tin box to be " an additional exterior
covering." There is no provision made in the law for "additional
exterior" coverings. Provision is made only for a common exterior
covering. We have in this case a large wooden box inclosing ten tin
boxes, each tin box, in its turn, inclosing ten bags, of tobacco. In
determining how many exterior coverings are contemplated by the law,
we must take into consideration that Rule 18, to speak figuratively, is
looking at the wooden box as a whole. This is necessarily so because
it is the specific package upon which duty is to be levied — that is to
say, it is the unit of dutiability. If there were more than one such box,
each one would, in the same way, be looked at separately. In other
words, there would be as many separate applications of the rule as
there are separate visible packages. If we look at each wooden box as
a whole, as the unit of dutiability, it is evident, as a matter of language,
that there is only one common exterior covering so far as that box and
its contents are concerned. This must necessarily be so because there
can not be a common exterior covering for two or more boxes which
are entirely separated from each other, each one capable of being
moved and transported independently and widely separated portions of
uninclosed space. Two objects which are inclosed in a common
covering are incapable of separation from each other farther than the
limits of the common covering. The instant that one of two objects
inclosed in a common covering comes to occupy a portion of space not
inclosed in the common receptacle, that instant the covering ceases to
be common in its relation to those two objects.
It is apparent, therefore, that as to all of the tin boxes inclosed in the
wooden covering there is but one common covering. To be sure, each
tin box is, in a sense, a common covering as to the ten bags of tobacco
contained in it, but it is not common as to the other tin boxes within the
same wooden covering. When we say that each tin box is a common
covering as to all the bags within it, we are looking at only a part of the
shipment; we are dividing the unit of dutiability. We are not looking at
the shipment as a whole. As we have before stated, a proper
interpretation of Rule 18 requires that each box occupying a separate
portion of uninclosed or theretofore unoccupied space must be looked
at separately, each being a separate and distinct package to which the
rule must be applied in levying the] duty. The word "common," by force
of its definition, refers to all the ten tin boxes. The words "common
exterior covering" refer, for the same reason, to all of the ten tin boxes.
Under the facts of this case, there can be only one covering common
to them all and there can be only one covering exterior to them all.
The foregoing, it seems to us, disposes of that interpretation of the
court below whereby each tin box is held to be "an additional exterior
covering." From the very nature of things there can be, under the facts,
but one exterior covering for everything within that covering. The
confusion arises, as before pointed out, from not look ng at the wooden
box or covering as a whole. It is not permissible to look at the wooden
box as ten separate tin boxes, for if it be so regarded, then those
provisions of Rule 18 relating to the common exterior covering and the
interior receptacles have lost completely their significance. The rule, by
the entity upon which, or the contents of which, duty is to be levied;
and the descriptions of the articles which are dutiable or not the
dutiable within said wooden covering refer for their significance and
meaning to the wooden covering. The words "interior" and "immediate"
have no meaning apart from that which is "exterior" to all.
It having been demonstrated that there is the only one common
exterior covering and that one the wooden box or case, it necessarily
follows that the tin boxes in question can not be in any sense a
common or exterior covering. Being neither common nor exterior, they
must, then, be either interior or immediate. In this case they can not be
both. It is admitted by all that the cotton bags are the immediate
coverings. The tin boxes can not, therefore, be immediate, as they and
the cotton bags can not perform the same office at the same time. As a
necessary result, the words "interior" and "immediate" can not have
been meant by the statute to be synonymous. The words "all" and
"receptacles" in the phrase "all interior or immediate receptacles," both
in the plural, strengthen this conclusion. The result thus reached avoids
rendering meaningless the phrase in question and doing violence to
the structure of the preceding paragraph of the statute.
The judgment of the court below is hereby reversed and the decision of
the Insular Collector of Customs affirmed, without special finding as to
costs of this instance.
G.R. No. L-13994 April 29, 1961
VALERIO P. TRIA, in substitution of MARIANO B. DELGADO,
plaintiff-appellant,
vs.
WENCESLAO A. LIRAG, defendant-appellee.
Appeal from an order of the Court of First Instance of Camarines Sur
denying a motion to set aside an alias writ of execution.
On June 19, 1946, Mariano B. Delgado, acting through his wife, and
defendant Wenceslao A. Lirag executed a deed whereby Delgado sold
to Lirag a parcel of land situated in the municipality of Tinambac,
Camarines Sur, for a specified price, payable in the manner therein
stipulated. Alleging that Lirag had violated the terms of the agreement,
on July 12, 1954, Delgado instituted this action, in said court, for the
recovery of P8,000, plus attorney's fees and costs.
After the filing of Lirag's answer, or on December 20, 1954, the parties
submitted to the court the following compromise agreement:
COME NOW the plaintiff and the defendant in the above-entitled case,
assisted by their respective counsel, and to this Honorable Court
respectfully submit the following agreement:
1. That the parties hereby agree to rescind the deed of sale marked
Annex "A" to the complaint, dated June 19, 1946, subject to the
conditions stated below;
2. That the plaintiff will pay to the defendant the sum of P13,500.00 on
or before December 31, 1955, in full payment and satisfaction of all sums
of money received by the plaintiff from the defendant as well as
expenses incurred by the latter. Upon full payment of this amount, the
defendant will deliver to the plaintiff the land which is the subject-matter
of the said deed of sale of June 19, 1946;
3. That the parties mutually relinquish their claims for damages and
attorney's fees against one another;
4. That the plaintiff may sell, mortgage, or otherwise dispose of the land
subject-matter of the sale dated June 19, 1946, or any part thereof in
order to raise such sum as may be necessary to pay the afore-
mentioned amount of P13,500.00 to the defendant, provided however,
that no sale, mortgage or disposition made by the plaintiff shall be valid
unless made with the consent of the defendant; and that in case of
disagreement the matter shall be settled by the Court.
WHEREFORE, the parties respectfully request that the foregoing
agreement be approved and judgment be rendered in accordance
therewith, without pronouncement as to costs. (Emphasis supplied.)
On December 23, 1954, the Court of First Instance of Camarines Sur
rendered a decision transcribing and incorporating as part thereof said
compromise agreement, the dispositive part of which decision reads:
In view thereof, the foregoing agreement is approved an judgment. is
rendered in conformity therewith, without pronouncement as to costs.
On May 2, 1955, Delgado conveyed all his rights in and to the
aforementioned property to one Valerie P. Tria who, with Lirag's
conformity, subsequently, substitute Delgado as plaintiff in this case. On
February 29, 1956 Lirag filed a "motion for execution", upon the ground
that Tria had not paid the sum of P13,500.00 on or before December 31,
1955, in violation of the compromise agreement and the decision. Over
Tria's objection, the motion was granted by an order dated June 5, 1956.
No appeal having been taken therefrom, the corresponding writ of
execution was issued on October 25, 1956. For reasons not stated in
the record, said writ was not enforced. Hence, on motion of Lirag, an
alias writ of execution was issued on January 29, 1958. Soon thereafter,
or on February 18, 1958, Tria filed a "motion to lift alias writ of execution",
which was denied by an order dated March 1, 1958. Hence, this appeal
by Tria.
Tria maintains that his failure to pay the sum of P13,500 — which,
according to the compromise agreement incorporated into the decision
was due on or before December 31, 1955 — was imputable to Lirag,
because the latter had, in violation of said agreement, refused to lend
him (Tria) the original certificate of title to the property in question, as
well as to sign papers and pleadings necessary to enable him (Tria) to
raise funds with which to pay said amount. This pretense was rejected
by the lower court in the following language:
The motion is opposed on the ground that the movant, Wenceslao A.
Lirag, violated the decision by refusing to lend to Valerie P. Tria Original
Certificate of Title No. 181 and other papers necessary to enable him to
contract a loan. The falsity of this excuse is patent. Under the terms of
the decision, should any controversy arise between the parties over the
stipulation allowing Delgado, Tria's predecessor in interest, to mortgage
the land in question, it should be submitted to this Court for decision.
Tria failed to call the attention of this Court to the alleged refusal of
Delgado so that the controversy could be resolved conformably to the
decision. Again, on January 14, 1956, Counsel for Tria, Atty. Ruperto,
sent Atty. Luntok, Lirag's counsel, a letter in answer to the latter's
demand that Tria pay the amount of the judgment within 15 days. In that
letter, Atty. Ruperto made no mention whatsoever of Lirag's alleged
refusal to lend the title and other papers necessary to enable Tria to
secure a loan. On the contrary, he requested that Tria be given an
additional period within which to pay.
We are fully in agreement with this view, which is borne out by the
record. Besides, notice of Lirao's motion for execution of the decision
was duly served upon Tria, who filed a written opposition thereto. Yet,
when the lower court issued its order of June 5, 1956, overruling this
opposition and granting said motion, Tria did not appeal from said order
and thus allowed it to become final executory. He did not question its
propriety until a the issuance of an alias writ of execution on January
1958, or more than a year and a half later. It is now too late, therefore,
to invoke the alleged breach of the compromise agreement by Lirag as
a ground to bar the execution of the decision in this case. He could have,
and shall have, taken it up on appeal from the order of June 1956.
Tria insists that the compromise agreement was merely a contract,
which may be enforced by ordinary action specific performance, not by
writ of execution. Said compromise agreement is, however, more than a
contract. It had been submitted to the court for approval with request that
judgment be rendered in accordance therewith, and was accordingly
approved by the court and incorporation into its decision, which was
"rendered in conformity there with." In other words, it was part and parcel
of the judgment and may, therefore, be enforced, as such, by writ
execution. (Art. 2037, Civil Code of the Philippines.)
WHEREFORE, the order appealed from is hereby firmed, with costs
against plaintiff-appellant, Valerio Tria. It is so ordered.
G.R. No. 105409. March 1, 1993.
MASTER TOURS and TRAVEL CORPORATION, petitioner, vs. HON.
COURT OF APPEALS, (Twelfth Division), HON. LEONARDO I.
CRUZ, Presiding Judge of the Regional Trial Court of Manila,
Branch 25, FRANCISCO SALVADOR, Deputy Sheriff, RTC of
Manila, Branch 25, and CATHAY PACIFIC AIRWAYS, LTD.,
respondents.
Charles Dimaano for petitioner.
Chua and Associates Law Office for Cathay Pacific Airways.
SYLLABUS
1. REMEDIAL LAW; PROVISIONAL REMEDIES; ATTACHMENT;
RULES ON THE ISSUANCE OF WRITS OF ATTACHMENT EX-
PARTE. — Davao Light and Power, Co., Inc. vs. Court of Appeals (G.R.
No. 93262, November 29, 1991, 204 SCRA 343) lays down the rules on
the issuance of writs of attachments ex-parte: "A preliminary attachment
may be defined, paraphrasing the Rules of Court, as the provisional
remedy in virtue of which a plaintiff or other proper party may, at the
commencement of the action or at any time thereafter, have the property
of the adverse party taken into the custody of the court as security for
the satisfaction of any judgment that may be recovered. It is a remedy
which is purely statutory in respect of which the law requires a strict
construction of the provisions granting it. Withal no principle, statutory or
jurisprudential, prohibits its issuance by any court before acquisition of
jurisdiction over the person of the defendant. Rule 57 in fact speaks of
the grant of the remedy `at the commencement of the action or at any
time thereafter.' The phrase, `at the commencement of the action,'
obviously refers to the date of the filing of the complaint - which, as
above pointed out, is the date that marks `the commencement of the
action;' and the reference plainly is to a time before summons is served
on the defendant, or even before summons issues. What the rule is
saying quite clearly is that after an action is properly commenced — by
the filing of the complaint and the payment of all requisite docket and
other fees — the plaintiff may apply for and obtain a writ of preliminary
attachment upon fulfillment of the pertinent requisites laid down by law,
and that he may do so at any time, either before or after service of
summons on the defendant. And this indeed, has been the immemorial
practice sanctioned by the courts: for the plaintiff or other proper party
to incorporate the application for attachment in the complaint or other
appropriate pleading (counter-claim, cross-claim, third-party claim) and
for the Trial Court to issue the writ ex-parte at the commencement of the
action if it finds the application otherwise sufficient in form and
substance." ". . . The only pre-requisite is that the Court be satisfied,
upon consideration of 'the affidavit of the applicant or of some other
person who personally knows the facts, that a sufficient cause of action
exists, that the case is one of those mentioned in Section 1 . . . (Rule
57), that there is no other sufficient security for the claim sought to be
enforced by the action, and that the amount due to the applicant, or the
value of the property the possession of which he is entitled to recover,
is as much as the sum for which the order (of attachment) is granted
above all legal counterclaims.' If the court be so satisfied, the `order of
attachment shall be granted,' and the writ shall issue upon the
applicant's posting of `a bond executed to the adverse party in an
amount to be fixed by the judge, not exceeding the plaintiff's claim,
conditioned that the latter will pay all the costs which may be adjudged
to the adverse party and all damages which he may sustain by reason
of the attachment, if the court shall finally adjudge that the applicant was
not entitled thereto.'"
2. ID.; CIVIL PROCEDURE; JUDGMENT RENDERED IN
ACCORDANCE WITH COMPROMISE AGREEMENT; AS A GENERAL
RULE, IMMEDIATELY EXECUTORY; EXCEPTION. — Petitioner raises
the issue of the permissibility of withdrawing a compromise agreement
which has not been approved by the court. The rule is that a judgment
rendered in accordance with a compromise agreement is immediately
executory unless a motion is filed to set aside the agreement on the
ground of fraud, mistake or duress in which case an appeal may be
taken against the order denying the motion. (Arkoncel, Jr. v. Lagamon,
G.R. No. 50526, December 4, 1991, 204 SCRA 560)
DECISION
PADILLA, J p:
Basically, the question here involved is the propriety of a writ of
preliminary attachment issued by the trial court ex parte, prior to notice
and hearing but served on the defendant simultaneously with the
summons.
The Facts:
On 28 February 1991, summons together with a copy of the complaint
for sum of money filed by the private respondent Cathay Pacific Airways
Ltd. (Cathay) and an Order of Attachment dated 21 February 1991 were
served upon and received by the petitioner. Pursuant to the Order of
Attachment, the sheriff immediately levied upon properties of the
petitioner, with value equivalent to Cathay's claim.
On 25 March 1991, defendant therein (herein petitioner) moved to set
aside the order of attachment on the grounds that there had been no
prior notice or hearing before the issuance of the writ and that the
averments of the complaint failed to satisfactorily allege the basis for
attachment as required by the Rules of Court. Pending resolution of this
motion, petitioner filed its answer to Cathay's complaint. On 29 April
1991, the trial court issued an order denying the petitioner's motion to
set aside or discharge the attachment writ; petitioner thereupon moved
for reconsideration.
However, pending resolution of the incident, the respondent sheriff and
Cathay's counsel, allegedly thru coercion and harassment, compelled
the petitioner, thru its counsel and vice-president, to enter into a
compromise agreement. Petitioner subsequently moved to withdraw the
said compromise agreement before the trial court could approve the
same. On 7 June 1991, petitioner's aforesaid motion for reconsideration
and motion to withdraw compromise agreement were jointly heard and
later submitted for resolution. Pending said resolution, respondent
sheriff and Cathay's counsel allegedly continued to harass the petitioner
and were able to effect garnishment of certain bank deposits of
petitioner.
Faced with this predicament, the petitioner resorted to a petition for
certiorari with the Court of Appeals, but the latter court denied due
course to the same as the trial court had yet to rule on petitioner's twin
motions for reconsideration and withdrawal or compromise agreement.
Finally, on 17 October 1991, the trial court issued an order denying
petitioner's twin motions. Petitioner again took recourse to the
respondent appellate court, but after hearing both parties, the appellate
court ruled to dismiss the petition. Hence, this petition for review.
Petitioner principally contends that the respondent Court of Appeals
committed a grave reversible error in not holding that the trial court had
not yet acquired jurisdiction over the person of the petitioner for lack of
notice and hearing when it issued ex-parte the writ of preliminary
attachment, hence, this was a denial of due process.
Davao Light and Power, Co., Inc. vs. Court of Appeals (G.R. No. 93262,
November 29, 1991, 204 SCRA 343) lays down the rules on the
issuance of writs of attachment ex-parte:
"A preliminary attachment may be defined, paraphrasing the Rules of
Court, as the provisional remedy in virtue of which a plaintiff or other
proper party may, at the commencement of the action or at any time
thereafter, have the property of the adverse party taken into the custody
of the court as security for the satisfaction of any judgment that may be
recovered. It is a remedy which is purely statutory in respect of which
the law requires a strict construction of the provisions granting it. Withal
no principle, statutory or jurisprudential, prohibits its issuance by any
court before acquisition of jurisdiction over the person of the defendant.
Rule 57 in fact speaks of the grant of the remedy 'at the commencement
of the action or at any time thereafter.' The phrase, 'at the
commencement of the action,' obviously refers to the date of the filing of
the complaint — which, as above pointed out, is the date that marks 'the
commencement of the action;' and the reference plainly is to a time
before summons is served on the defendant, or even before summons
issues. What the rule is saying quite clearly is that after an action is
properly commenced — by the filing of the complaint and the payment
of all requisite docket and other fees — the plaintiff may apply for and
obtain a writ of preliminary attachment upon fulfillment of the pertinent
requisites laid down by law, and that he may do so at any time, either
before or after service of summons on the defendant. And this indeed,
has been the immemorial practice sanctioned by the courts: for the
plaintiff or other proper party to incorporate the application for
attachment in the complaint or other appropriate pleading (counter-
claim, cross-claim, third-party claim) and for the Trial Court to issue the
writ ex-parte at the commencement of the action if it finds the application
otherwise sufficient in form and substance."
" . . . The only pre-requisite is that the Court be satisfied, upon
consideration of 'the affidavit of the applicant or of some other person
who personally knows the facts, that a sufficient cause of action exists,
that the case is one of those mentioned in Section 1 . . (Rule 57), that
there is no other sufficient security for the claim sought to be enforced
by the action, and that the amount due to the applicant, or the value of
the property the possession of which he is entitled to recover, is as much
as the sum for which the order (of attachment) is granted above all legal
counterclaims.' If the court be so satisfied, the 'order of attachment shall
be granted,' and the writ shall issue upon the applicant's posting of 'a
bond executed to the adverse party in an amount to be fixed by the
judge, not exceeding the plaintiff's claim, conditioned that the latter will
pay all the costs which may be adjudged to the adverse party and all
damages which he may sustain by reason of the attachment, if the court
shall finally adjudge that the applicant was not entitled thereto.'"
Petitioner likewise raises the issue of the permissibility of withdrawing a
compromise agreement which has not been approved by the court. The
rule is that a judgment rendered in accordance with a compromise
agreement is immediately executory unless a motion is filed to set aside
the agreement on the ground of fraud, mistake or duress in which case
an appeal may be taken against the order denying the motion. (Arkoncel,
Jr. v. Lagamon, G.R. No. 50526, December 4, 1991, 204 SCRA 560).
In its order of 17 October 1991 (p. 249, Rollo), the Regional Trial Court
said:
"The Court does not believe, so to speak, that the Executive Vice
President, who signed the compromise agreement cannot bind the
defendant for if it were otherwise, the defendant corporation's board as
portrayed above, would have been on guard.
The compromise agreement, to say the least, in the contemplation of the
law, is a valid document binding not only on the Executive Vice
President, but also on the defendant corporation itself. It is not vitiated
by what the Executive Vice President of the defendant corporation and
the lawyer representing both call — lack of authority and threat and
intimidation — that compelled them (Executive Vice President and
counsel) to sign it. This protestation, is amply refuted in the plaintiff's
opposition . . . ."
The propriety or improriety of withdrawing the compromise agreement is
more a question of fact than of law in this particular case.
ACCORDINGLY, the petition is DENIED, there being no reversible error
committed by respondent appellate court.
SO ORDERED.
G.R. No. L-23098 February 28, 1967
DOMINGO T. JACINTO, petitioner,
vs.
HON. AGUSTIN P. MONTESA, in his capacity as Judge of the
Court of First Instance of Manila, THE SHERIFF OF MANILA,
ALPHA INVESTMENTS AND FINANCE CORPORATION and
PASTOR D. AGO respondents.
This is an original petition for certiorari and prohibition with preliminary
injunction seeking to enjoin and prohibit respondents from enforcing an
alias writ of execution issued against herein petitioner in Civil Case No.
39990, entitled "Alpha Investments and Finance Corporation, plaintiff,
versus Pastor D. Ago and Domingo T. Jacinto, defendants", of the
Court of First Instance of Manila. Said petition prays that respondents
be also enjoyed from further proceeding with the levy on execution of
herein petitioner's properties.1äwphï1.ñët
As gathered from the record, the antecedents of this case are:
On 23 April, 1959, Alpha Investments filed a suit in the Court of First
Instance of Manila to recover P26,000.00 plus 10% attorney's fees and
court costs from Pastor D. Ago and from Domingo T. Jacinto, who had
guaranteed Ago's solvency in a separate document. Only Pastor D.
Ago answered the complaint, but Domingo T. Jacinto failed to do so,
though duly served with summons. Consequently, upon motion of
plaintiff, Jacinto was declared in default.
Subsequently, on 15 November 1960, a pleading entitled "Stipulation
of Facts and Compromise Agreement" was executed wherein Pastor
Ago admitted joint and several liability with Domingo Jacinto, for the
principal sum of P25,654.00 with 12% from 16 March 1960 until fully
paid, to be paid at the rate of P5,000.00 every two months from 1
December 1960. This stipulation was signed in the following manner:
ALPHA INVESTMENTS & FINANCE CORPORATION
Plaintiff
By (Sgd.) L.L. Reyes
L.L .REYES
Corporate Secretary & Counsel
2nd Floor, M. Tiaoqui Bldg.
Plaza Sta. Cruz, Manila
For Defendants:
(Sgd.) Pastor D. Ago
PASTOR D. AGO
508 Roman R. Santos Bldg.
Plaza Goiti Manila
Assisted by:
(Sgd.) Jose M. Luison
JOSE M. LUISON
Counsel for Defendants
Suite 305 Leyba Bldg.
Dasmariñas-David Manila
On 18 November 1960, the trial court, through the then presiding
Judge (now Court of Appeals' Justice), Hon. Julio Villamor, rendered a
decision on the basis of the above-quoted compromise agreement, the
dispositive part of which reads:
WHEREFORE, the stipulation of facts and compromise agreement
quoted above is hereby approved; judgment is hereby rendered in
accordance therewith, and the parties are hereby enjoined to comply
faithfully and well with their corresponding obligations.
SO ORDERED.
For failure of the defendants to comply with their obligations as
enjoined in the above decision, plaintiff moved, on 28 February 1963,
for the issuance of a writ of execution. The trial court granted, on 3
March 1963, said writ which expired, however, without being served
on, and enforced against, the defendants. Hence, plaintiff, upon
application, later secured, on 1 April 1964, an alias writ of execution.
Upon being served with said alias writ, defendant Jacinto presented,
on 4 April 1964, a motion to quash the same, alleging as grounds
therefor that the judgment based on the compromise is not binding or
enforceable against him since he was not a party nor has he
unauthorized his codefendant Ago or his counsel to represent him in
said compromise agreement; and that having been previously declared
in default plaintiff, nevertheless, failed to adduce evidence against him;
hence, no judgment could have been validly rendered against him; and
that he was not notified of the above-stated compromise agreement
nor of the judgment and plaintiff's motion for execution. Plaintiff
opposed said motion.
On 8 April 1964, the trial court, through the present respondent judge,
Hon. Agustin P. Montesa, denied defendant Jacinto's motion for lack of
merits.
In the meanwhile, plaintiff, by virtue of said alias writ, levied on
Jacinto's personal and real properties and caused a notice of levy on
execution to be annotated on his land covered by Transfer Certificate
of Title No. 11627 of the Registered of Deeds of Caloocan City.
Defendant Jacinto first went to the Court of Appeals on a petition for
certiorari and prohibition with preliminary injunction which was
docketed therein as its CA-G.R. No. 33884-R. Upon its filing, said
appellate court issued the writ of preliminary injunction theretofore
pray. This petition is practically similar as the instant petition before Us.
Said court found, however, that the main relief prayed for in said
petition was not in aid of its appellate jurisdiction; hence, it dismissed
the same, through a decision promulgated on 3 June 1964, on the sole
ground that it lacked jurisdiction to grant the relief prayed therein and,
accordingly, set aside and dismissed the preliminary injunction
previously issued.
On 29 June 1964, defendant Jacinto resorted to, this Court on the
present petition, practically reiterating the allegations in his motion to
quash in the Court of First Instance. We gave due course to the
petition, required respondents to answer and, upon petitioner's
(Jacinto) filing of a bond, issued the preliminary injunction prayed for.
Upon the other hand, respondent Alpha Investments and Finance
Corporation in its answer disputes Jacinto's claim that he was not a
party to the compromise agreement. Thus, it points out that, although
Jacinto was declared in default, this fact did not prelude him from
authorizing his co-defendant Ago and his counsel to represent in said
agreement as shown and express therein that "they have been
authorized by their respective parties with full authority to enter freely
an voluntarily into a stipulation of facts and conclude a compromise
agreement in this case"; and that there were only two (2) defendants in
the court below, one of them being Ago who signed said agreement for
"defendants," and Atty. Jose M. Luison, who likewise signed it as
"counsel for defendants"; that Jacinto having been duly represented in
said compromise agreement which was approved by the lower court,
there is no necessity of presenting evidence against the defendants
(including Jacinto); that the lower court having admittedly acquired
jurisdiction, the judgment rendered thereon is valid; that said valid
judgment having become final and executory, respondent Judge did
not err or commit any grave abuse of discretion in issuing the
questioned alias writ of execution.
Alpha also disputes the propriety of the present remedy claiming that
Jacinto had other and more appropriate and adequate remedy, such as
petition for relief from judgment (Rule 38 Rules of Court), though lost
through herein petitioner's inexcusable negligence or deliberate in
action; hence, it prays that the instant petition be dismissed and the
writ of preliminary injunction previously issued be dissolved.
In his answer to the petition, respondent Ago, through his counsel,
manifested that they did not represent Jacinto in said compromise
agreement and in any other incidental proceedings in the lower court;
and that the use of the plural word "defendants" therein is a mere
clerical or typographical error of their typist.
We are inclined to believe herein petitioner Jacinto's claim that he has
not authorized Ago and his counsel, Atty. Jose M. Luison, or even
engaged the services of the latter, to represent him in said compromise
agreement. Ago and Luison corroborated this claim. It appears from
the record of this case that Jacinto is not a signatory party to said
agreement, and nothing therein shows that Ago and Luison had any
special authority to compromise the case in behalf of herein petitioner,
which requirement of special authority is mandatory under the law
(Section 23, Rule 138, Revised Rules of Court).
SEC. 23. Authority of attorneys to bind clients. — Attorneys have
authority to bind their clients in any case by any agreement in relation
thereto made in writing, and in taking appeals, and in all matters of
ordinary judicial procedure. But they cannot, without special authority,
compromise their client's litigation, or receive anything in discharge of a
client's claim but the full amount in cash.
It is not disputed that Jacinto was declared in default in the lower court
and that plaintiff did not adduce evidence to prove his cause of action
against him. Under the circumstances prevailing in the case at bar, it is
clear that no valid judgment was rendered against Jacinto that may be
enforced by execution. As this Court ruled in a case with facts
practically identical to the case at bar, a judgment based upon a
compromise entered by an attorney without specific authority from the
client is null and void, and such judgment may be impugned, and its
execution restrained, in any proceeding by the party against whom it is
sought to be enforced (Zafra de Alviar vs. Court of First Instance of La
Union, 64 Phil. 301).
We come now to the issue of property and the present petition. As a
general, rule, special civil actions of certiorari or prohibition may only
be invoked when an inferior court, or any of the entities or officers
specified in the Rules, has acted "without or in excess of jurisdiction or
with grave abuse of discretion, and there is no appeal, nor any plain,
speedy, and adequate remedy in the ordinary coarse of law" (Sections
1 and 2, Rule 65, Revised Rules of Court).
While it has already been held that "as a rule, a judgment upon
compromise is not appealable and is immediately executory, unless a
motion is filed to set aside the compromise on the ground of fraud,
mistake, or duress, in which event an appeal may be taken from the
order denying the motion, and that is the remedy in this case and not
certiorari in this Court" (De los Reyes vs. De Ugarte, 75 Phil. 505; cited
in Enriquez vs. Padilla, 77 Phil. 373), Jacinto was not in a position to
urge such vices of consent, since he was not a party to the
compromise, and never agreed to the same.
Petitioner Jacinto could have availed of the remedy of relief from
judgment under Rule 38 of the Rules of Court or appeal from the order
issuing the alias writ of execution (Castro vs. Surtida, 87 Phil. 166;
Salonga vs. Trinidad, G.R. No. L-13927, February 29, 1960); however,
such remedy is rendered inadequate or ineffective in the case at bar
where the writ of execution was in the process of being carried out.
Hence, certiorari will lie.
While as a rule, certiorari does not lie when there is an appeal, the rule
may be relaxed where, as in the instant case, a writ of execution is in
the process of being carried out. Needless to say, the underlying
reason for this doctrine is to give a party litigant his day in court and an
opportunity to be heard. (Liwanag vs. Castillo, G.R. No. L-13517,
October 20, 1959; citing Saludes vs. Pajarillo, 78 Phil. 754, and
Woodcraft Works, Ltd. vs. Moscoso, 92 Phil. 1021).
This Court has also held that —
As the judgment in question (on compromise) is null and void ab initio,
it is evident that the court acquired no jurisdiction to render it, much
less to order the execution thereof. Consequently, certiorari lies in
favor of the petitioners as it is clear that against said judgment there is
no longer any plain, speedy, and adequate remedy in the ordinary
course of law. (Zafra de Alviar vs. Court of First Instance of La Union,
supra; citing cases).
It is thus evident from the above-cited authorities that the petition
herein was proper. With this conclusion, the orders of the trial court,
dated 22 December 1966 and 10 January 1967, cancelling the notice
of levy on execution, which respondent corporation questions in this
case, are rendered moot and academic, and need not be further
discussed.
Wherefore, the writ prayed for is hereby granted; the orders of the
lower court issuing the original and alias writs of execution are
declared null and void and set aside in so far as they affect the
petitioner, Domingo T. Jacinto, and the writ of preliminary injunction
heretofore issued is made permanent. Costs against private
respondent, Alpha Investments and Finance Corporation.
Concepcion, CJ., Dizon, Regala, Makalintal, Bengzon, J.P., Zaldivar,
Sanchez and Castro, JJ., concur.
G.R. No. L-29838 March 18, 1983
FERMIN BOBIS and EMILIA GUADALUPE, plaintiffs-appellants
vs.
THE PROVINCIAL SHERIFF OF CAMARINES NORTE and ZOSIMO
RIVERA, defendants-appellees.
Appeal from the judgment of the Court of First Instance of Camarines
Norte, dismissing the complaint for the annulment of an execution sale,
which was certified to this Court by the Court of Appeals upon the ground
that only questions of law are involved in the appeal.
The facts are not disputed. It appears that Rufina Camino and Pastor
Eco were the registered owners of a parcel of land, with an area of
10.7791 hectares, covered by Transfer Certificate of Title No. T-398. The
said parcel of land was cultivated by the spouses Fermin Bobis and
Emilia Guadalupe. On July 25, 1950, one Alfonso Ortega filed a
complaint against Rufina Camino, Pastor Eco, Emilia Guadalupe, and
Fermin Bobis with the Court of First Instance of Camarines Norte,
docketed therein as Civil Case No. 273, for the recovery of possession
of one-half (1/2) of the cleared and planted portion of the land, or the
payment of the amount of P1,650.00, the value of the improvements
introduced by him on the parcel of land in question. On August 16, 1950,
the parties executed a compromise agreement whereby they agreed:
1. The defendants Rufina Camino and Pastor Eco shall pay the plaintiff
the sum of One Hundred Forty Pesos (P 140.00) Philippine Currency,
as full payment for all the improvements (coconuts and bananas)
introduced by the plaintiff in the land in question, payable on February
28, 1951;
2. That plaintiff has no other claim against the defendants except for the
improvements;
3. That hereafter, the plaintiff shall recognize and respect the absolute
and exclusive ownership of the land in question; and
4. That plaintiff in consideration of this amicable settlement renounces
his claim for damages.
On August 26, 1950, Rufina Camino and Pastor Eco sold the parcel of
land to their co-defendants, spouses Fermin Bobis and Emilia
Guadalupe, and TCT No. T-838 was issued in their names. On January
19, 1951, the parties submitted the compromise agreement to the court;
and on January 22, 1951, the court promulgated a decision, approving
the said compromise agreement.
The defendants Rufina Camino and Pastor Eco, however, only paid the
amount of P50.00 to Alfonso Ortega when the obligation became due on
February 28, 1951. As a result, a writ of execution was issued on July
18, 1951, commanding the Provincial Sheriff of Camarines Norte that
the goods and chattels of the defendants Rufina Camino, Pastor Eco,
Emilia Guadalupe, and Fermin Bobis be caused to be made the sum of
P140.00. Consequently, the Sheriff levied upon the land which Rufina
Camino and Pastor Eco had sold to Fermin Bobis and Emilia Guadalupe.
Upon learning of the levy on execution, Emilia Guadalupe and Fermin
Bobis filed a motion seeking the modification of the writ of execution to
exclude them therefrom because under the judgment sought to be
executed only the defendants Rufina Camino and Pastor Eco were
obligated to pay the plaintiff Alfonso Ortega. But, the trial court denied
the motion. Subsequently, on September 3, 1951, the Provincial Sheriff
sold the parcel of land in question at an execution sale to Zosimo Rivera,
the highest bidder.
After the expiration of one year, or on September 17, 1952, with neither
Rufina Camino, Pastor Eco, Emilia Guadalupe, nor Fermin Bobis
exercising the right of redemption, the Provincial Sheriff executed an
Officer's Deed of Sale of the land in favor of the said Zosimo Rivera. The
Officer's Deed of Sale was submitted to, and approved by, the trial court
on March 23, 1953.
Thereupon, Zosimo Rivera asked for a writ of possession. The Provincial
Fiscal of Camarines Norte, in his capacity as ex oficio Register of Deeds
of the province, also filed a motion praying that Emilia Guadalupe be
directed to surrender the owner's duplicate of TCT No. T-838 so that the
Sheriff's sale could be annotated therein. The court granted both
motions and directed the issuance of a writ of possession, and ordered
Emilia Guadalupe to surrender the owner's duplicate copy of TCT No.
T-838 within five (5) days from notice. Emilia Guadalupe, however, did
not surrender her duplicate copy of the certificate of title and, instead,
filed a motion for the reconsideration of the order. The motion for
reconsideration was denied by the court, but still, Emilia Guadalupe
refused to surrender the owner's duplicate copy of the certificate of title.
Nor did she vacate the land despite the writ of possession. As a result,
a petition to declare her in contempt of court was filed. After due hearing,
Emilia Guadalupe was declared guilty of contempt for disobeying a
lawful order and for obstructing the administration of justice and
sentenced to undergo imprisonment until such time as she complies with
the orders of the court.
On March 4,1960, Fermin Bobis and Emilia Guadalupe filed the instant
action against the Provincial Sheriff of Camarines Norte and Zosimo
Rivera with the Court of First Instance of Camarines Norte, docketed
therein as Civil Case No. 1169, for the annulment of the sheriff's deed of
sale and for damages, upon the ground that the writ of execution issued
in Civil Case No. 273 was not in conformity with the judgment rendered
therein and therefore, void and of no legal effect. Upon the filing of the
complaint, the court ordered the release of Emilia Guadalupe who had
been confined in jail for about 8 months.
On June 3, 1964, the trial court rendered a decision, the dispositive
portion of which reads, as follows:
IN VIEW OF THE FOREGOING judgment is hereby rendered (a)
dismissing the complaint with costs against the plaintiffs; (b) declaring
the sale executed by Camino and Eco in favor of Emilia Guadalupe
rescinded; (c) declaring the sale executed by defendant Provincial
Sheriff in favor of Zosimo Rivera valid and legal; (d) declaring said
defendant Zosimo Rivera the owner of the land described in the
complaint; and (e) ordering Emilia Guadalupe to execute a deed of
conveyance in favor of defendant Zosimo Rivera.1
The plaintiffs appealed to the Court of Appeals, but the latter court
elevated the case to this Court for final determination for the reason that
only questions of law are involved in the appeal.
The appellants contend that the trial court erred:
1. In declaring that the sale executed by the provincial Sheriff in favor of
Zosimo Rivera valid and legal and that Zosimo Rivera is now the owner
of the land in question;
2. In dismissing the complaint for annulment of the sale made by the
Provincial Sheriff which is void from the beginning;
3. In declaring the sale executed by Camino and Eco in favor of Emilia
Guadalupe rescinded when there is no action for the same;
4. In ordering Emilia Guadalupe to execute a deed of conveyance in
favor of defendant Zosimo Rivera when the property is of the conjugal
partnership of Fermin Bobis and Emilia Guadalupe; and
5. In not granting damages against Zosimo Rivera and the Provincial
Sheriff when the machination to deprive plaintiffs of their land is very
evident in their actuations not only because of the ridiculously niggardly
price but also because the true plaintiff (Ortega) was not benefited by
the sale.
We find the appeal impressed with merit. The writ of execution issued in
Civil Case No. 273 is null and void with respect to the spouses Fermin
Bobis and Emilia Guadalupe; hence, the sale of their property at a
subsequent sale at public auction to the defendant Zosimo Rivera is,
likewise, void and of no legal effect. The judgment rendered in Civil Case
No. 273 decreed:
l. That defendants Rufina Camino and Pastor Eco shall pay the plaintiff
the sum of One Hundred Forty Pesos (P 140.00) Philippine Currency,
as full payment for all the improvements (coconut bananas) introduced
by the plaintiff in the land in question, payable on February 28, 1951;
2. That plaintiff has no other claim against the defendants except for the
improvements;
3. That hereafter, the plaintiff shall recognize and respect the absolute
and exclusive ownership of the land in question; and
4. That plaintiff in consideration of this amicable settlement renounces
his claim for damages.
As will be seen, only Rufina Camino and Pastor Eco were adjudged to
pay Alfonso Ortega the amount of P140.00 on February 28, 1951.
Although they were included as party defendants, the spouses Fermin
Bobis and Emilia Guadalupe were not ordered to pay Alfonso Ortega.
Obviously, they were absolved from liability. Accordingly, as to them,
there was nothing to execute since they have been absolved from
liability. When, therefore, the lower court, in issuing the writ of execution
of the judgment, commanded the Provincial Sheriff that the goods and
chattels of the defendants Rufina Camino and Pastor Eco, Emilia
Guadalupe and Fermin Bobis be caused to be made the sum of P140.00
whereby making the spouses Fermin Bobis and Emilia Guadalupe
equally liable for the judgment debt of the spouses Rufina Camino and
Pastor Eco, adding to the judgment sought to be executed a new relief,
it acted in excess of jurisdiction, if not abuse of authority. As the late
Chief Justice Moran says in his Comments on the Rules of Court, "The
writ of execution must conform to the judgment which is to be executed,
as it may not vary the terms of the judgment it seeks to enforce. Nor may
it go beyond the terms of the judgment sought to be executed. Where
the execution is not in harmony with the judgment which gives it life and
exceeds it, it has pro tanto no validity. To maintain otherwise would be
to ignore the constitutional provision against depriving a person of his
property without due process of law." 2
Besides, the judgment rendered in Civil Case No. 273 was based upon
a compromise agreement of the parties. In the case of Yboleon vs.
Sison,3 this Court ruled that "a judge or court, which sets aside a
judgment rendered upon consent of the parties and based on a
compromise entered into by them, which is converted into such
judgment, cannot amend or set it aside without the consent of said
parties, or without first having declared in an incidental preliminary
hearing that such compromise is vitiated by any of the grounds for nullity
enumerated in Article 1817 (now Art. 2038) of the Civil Code." Since the
modification and amendment of the judgment was made unilaterally in
the writ of execution, without any preliminary hearing, it was unjustified.
It results that the writ of execution is null and void and of no legal effect
with respect to the spouses Fermin Bobis and Emilia Guadalupe. The
annulment of the writ of execution carries with it the annulment of the
sale made by the sheriff pursuant to the said writ, as well as the order of
the court approving the sale. The limbs cannot survive after the trunk
has perished.4
Since the right of Zosimo Rivera over the land in question is derived from
a void execution sale, he acquired no title therein.
Besides, Section 35, Rule 39 of the Rules of Court provides that a
purchaser of real property at an execution sale "shall be substituted to
and acquire all the right, title, interest, and claim of the judgment debtor
to the property as of the time of the levy." It follows that if at that time the
judgment debtor had no more right to, or interest in, the property
because he had already sold it to another, then the purchaser acquires
nothing. Such appears to be the case here for it is not disputed that
before the execution sale, and even before the levy on execution, or the
rendition of the judgment in Civil Case No. 273, the judgment debtors
Rufina Camino and Pastor Eco had already deeded the property to
Fermin Bobis and Emilia Guadalupe and a new certificate of title was
issued in the names of the vendees.
In dismissing the complaint filed in the instant case, the trial court found
that the sale of the land to Fermin Bobis and Emilia Guadalupe was
tainted with fraud since the said sale was made during the pendency of
Civil Case No. 273, and that the price was inadequate.
The rule, however, is that fraud is not presumed. As fraud is criminal in
nature, it must be proved by clear preponderance of evidence.5 In order
that a contract may be rescinded as in fraud of creditors, it is essential
that it be shown that both contracting parties have acted maliciously and
with fraud and for the purpose of prejudicing said creditors, and that the
latter are deprived by the transaction of all means by which they may
effect collection of their claims. All these circumstances must concur in
a given case. The presence of only one of them is not enough. 6 In this
particular case, there is no evidence that the spouses Rufina Camino
and Pastor Eco connived with the spouses Fermin Bobis and Emilia
Guadalupe to defraud Alfonso Ortega. Nor is there evidence to show
that the sale of the land to Fermin Bobis and Emilia Guadalupe tended
to deprive Alfonso Ortega of means to collect his claim from the spouses
Rufina Camino and Pastor Eco As a matter of fact, no oral or
documentary evidence was presented by the parties, and the trial court
merely assumed that the sale to Fermin Bobis and Emilia Guadalupe
was fraudulent because of the inadequacy of the price, and that the sale
was executed during the pendency of Civil Case No. 273. While these
circumstances may be considered badges of fraud, 7 the sale cannot be
considered in fraud of creditors in the absence of proof that the vendors
Rufina Camino and Pastor Eco had no other property except that parcel
of land they sold to the spouses Fermin Bobis and Emilia Guadalupe.
Besides, Alfonso Ortega knew of such sale and did nothing to have it
annulled as in fraud of creditors. Now did he cause a cautionary notice
to be inscribed in the certificate of title to protect his interests. Moreover,
the sale was not fictitious, designed to escape payment of the obligation
to Alfonso Ortega. The tenacity by which Emilia Guadalupe had clung to
her property to the extent of undergoing imprisonment is indicative of
their good faith.
In his answer, the defendant Zosimo Rivera claimed that the appellant's
cause of action is barred by a prior judgment. Apparently, the said
defendant was referring to the denial of the appellant's motion to modify
the writ of execution filed in Civil Case No. 273. However, the denial of
the appellant's motion to modify the writ of execution, which for all
purposes was a third party claim, does not constitute a bar to another
action even if no appeal was taken from the disapproval of the third party
claim. 8 A third-party claimant may file a separate reinvindicatory action
against the execution creditor or the purchaser of the property at the sale
at public auction. He may also file a complaint for damages to be
charged against the bond filed by the judgment creditor in favor of the
sheriff. Such reinvindicatory action is reserved to the third-party claimant
by Section 17, Rule 39 of the Rules of Court despite the disapproval of
its claim by the court itself. 9 Appeal is not proper in the case, 10 nor a
writ of certiorari or prohibition. 11
With respect to the claim of the appellants for damages, it is the rule that
when the property of one person is taken by the sheriff upon an
execution against another person, the sheriff is liable as any private
person would be for wrongly taking property of another. But, such does
not obtain in the present case. The sheriff did not wrongfully take the
property of the appellant spouses Fermin Bobis and Emilia Guadalupe
to satisfy the judgment debt of another. The writ of execution specifically
ordered him to cause the goods and chattels of Emilia Guadalupe,
Fermin Bobis, Rufina Camino, and Pastor Eco to be made the sum of
P140.00, and the sheriff merely followed the order. The defect was in
the writ of execution issued by the lower court and not in the levy or in
the sale at public auction. Hence, no fault can be attributed to the sheriff.
Therefore, he cannot be made liable for the damages incurred by the
appellant spouses. Corollarily, no damages can also be recovered from
the buyer of the property at the sale at public auction.
WHEREFORE, the judgment appealed from should be, as it is hereby,
SET ASIDE and another one entered, declaring the writ of execution,
dated July 18, 1951, issued in Civil Case No. 273 of the Court of First
Instance of Camarines Norte, entitled, "Alfonso Ortega, plaintiff, versus
Rufina Camino, et al., defendants," the sale made by the sheriff pursuant
to said writ, as well as the order of the court approving said sale, null
and void and of no legal effect with respect to the spouses Fermin Bobis
and Emilia Guadalupe. Without pronouncement as to costs.
SO ORDERED.
G.R. No. L-4358 January 2, 1953
JOSE SAMINIADA, petitioner,
vs.
EPIFANIO MATA, JULIAN PONCE, and ANGEL H. MOJICA, Judge
of the Court of First Instance of Albay, respondents.
The action which gave rise to this certiorari proceeding involves the
ownership and possession of a riceland containing an area of 2
hectares, 76 ares, and 2 centares situated in Libon, Albay, which
Epifanio Mata claims to have purchased from Julian Ponce. Jose
Saminiada, the defendant in the action, alleged that he occupied it by
virtue of free patent application No. 56140, entry No. 35499. After the
issues had been joined, and with a view to simplifying the proceedings,
the court, upon petition of the parties, designated one Ramon Rempillo,
Junior Public Land Inspector, as commissioner to determine whether or
not the land described in the complaint forms part of the land covered
by free patent application No. 56140 of Saminiada. On June 13, 1949,
Rempillo submitted his report, stating that the land subject of the action
was the same land covered by free patent application No. 56140 entry
No. 35499 (Annex H). He submitted a sketch of the property, Annex I,
indicating that the land contains an approximate area of 7 hectares, 5
ares, and 50 centares. Thereafter, i.e., on January 18, 1950, the parties
submitted an agreement, which reads as follows:
The parties herein represented by their respective counsels, agree on
the following:
1. That the plaintiff Epifanio Mata binds himself to limit his claim to the
western portion of the land as described on the sketch plan appearing
on page 119 of the record, which portion shall contain an area of 27,602
square meters, more or less, and more particularly described as follows:
"On the northeast by Vicente Satuito; on the southeast by part of the
land belonging to defendant Jose Saminiada, covered by his free patent
application No. 56140; on the southwest by Glicerio Satuito; and on the
northwest by Nicolas Salando, now Juan Gonzales."
2. That defendants agree to recognize the ownership of the plaintiff over
the portion of land as described in paragraph 1 hereof, and limit their
claim to the remaining portion of the land appearing and described in
said sketch, on page 119 on the record;
3. That the land to be taken by the plaintiff herein shall be segregated
by a duly qualified surveyor, which the parties agree would be Mr.
Ramon Rempillo, from the larger portion belonging to the defendants, at
the expense of said plaintiff;
4. That the palay now deposited with the receiver Mr. Fausto Peralta,
will be divided in equal shares between plaintiff Epifanio Mata and
defendant Jose Saminiada, after the cost of the receivership has been
deducted; and
5. That the Director of Lands, represented by Atty. Mr. Magno Clemente,
has no objection to the above stipulations.
WHEREFORE, the parties herein pray this Honorable Court that
judgment be rendered in accordance with the above agreement, without
costs.
Upon the submission of the above agreement, the court rendered
judgment in accordance therewith and enjoined the parties to comply
with the terms and conditions therein provided (Annex K).
Under date of February 13, 1950, counsel for defendant Jose Saminiada
presented a "motion for reconsideration of decision," stating that when
the commissioner submitted his report to the effect that the land
contained an area of more than 7 hectares, he entertained grave doubts
regarding such supposed area, as his client, defendant Jose Saminiada,
was of the belief that the area of the land was a little more 5 hectares
only; that believing that the commissioner's report was more liable than
his client's knowledge of the land, in justice to all the parties he prevailed
upon his client to enter into the agreement; than when the commissioner
went on the land to relocate the portion which had been designated to
belong to plaintiff, he learned that the portion to be left to the defendant
would be only 1 ½ hectares; that inasmuch as defendant's consent to
the agreement was made upon the erroneous report of the
commissioner, he prayed that the decision of January 18, 1950, be set
aside, that the commissioner be ordered to explain the anomaly in his
report and that the case be definitely set for hearing on its merits. This
motion of counsel for the defendant is not sworn to, and the court denied
it for lack of merit on February 18, 1950 (Annex 3).
On May 26, 1950, attorneys for Jose Saminiada presented a "petition of
relief," alleging that the boundaries of the land subject of the action, as
originally found by the commissioner, were exactly the same as that of
the land covered by defendant's free patent application No. 56140, and
that its area is 7 hectares, 5 ares, and 50 centares; that confident of the
surveyor's ability and technical skill and relying on the commissioner's
assurances, as well as on his report to the court (Annex H) that the land
contained an area of 7 hectares, 5 ares, and 50 centares, he was
induced to enter into the agreement, believing he would be left with 4
hectares, 29 ares, and 50 centares; that subsequently, upon trying to
make the segregation of 2.76 hectares in accordance with the
agreement, the commissioner found that the area was only 5 hectares,
more or less. This petition is supported by Saminiada's affidavit.
Opposition to this petition was registered by plaintiffs on the ground that
the decision had become final, and that the petition contains no affidavit
of merits (Annex 4). This motion was set for hearing on June 12, 1950,
but before the same was acted upon Saminiada's counsel submitted a
supplementary petition dated August 14, 1950. The court on August 15,
1950, denied the petition on the ground that the affidavit does not state
the facts, constituting petitioner's good defense (Annex 5).
It is to be noted that Rempillo, pursuant to the agreement, proceeded to
segregate the portion of 27,602 square meters that was to be assigned
to Mata. On June 8, 1950, he submitted a report wherein he declared
that upon making the segregation he found that the land to be left would
only be 14,113 square meters, because the area which he had given in
his original report (70,550 square meters) was incorrect due to the use
of a wrong scale.
A second motion for reconsideration was presented on September 11,
1950 (Annex Q), but the same was again denied by the court on
September 23, 1950 (Annex Q-1). Upon denial of this motion, the
present petition for certiorari was filed, the petitioner claiming that the
court committed an abuse of discretion in denying his motion to set aside
the decision, and that the decision and order of the respondent judge
are null and void.
It is an admitted fact that petitioner gave his consent to the compromise
because of the first report of the commissioner that the disputed land
contained an area of more than 7 hectares. His consent to the
agreement was, therefore, vitiated by error induced by the
commissioner's act. The objection urged against the granting of the
petition for relief (dated May 24, 1950; supplement dated August 12,
1950) is purely procedural, in that the petition was filed beyond the 60-
day period prescribed in section 3 of Rule 38 of the Rules of Court. The
record bears out this objection, because the motion for reconsideration
to set aside the "decision" was denied on February 18, 1950, and when
the petition for relief was filed on May 26, 1950, more than 90 days had
elapsed from said denial and 124 days from the decision. If the so-called
"decision" of the court, which recites the compromise agreement and
approves it, were the final judgment of the court on the issues involved
in the case, the objection to the remedy under Rule 38 would seem to
be valid. But the so-called "decision" of the court is not, in effect, a
judgment, because no finding on any issue of fact or law is made, and
no legal conclusion or pronouncement is made thereon as to the
respective rights and obligations of the parties in so far as the subject
matter of the action is concerned. A decision must "state clearly and
distinctly the facts and the law upon which it is based" (section 1, Rule
35, Rules of Court); these essentials of a judgment are lacking in the
"decision" in question. Under the old Civil Code the agreement entered
into by the parties, which is embodied in the court's decision, is
considered as a judicial compromise for the reason that its purpose is to
terminate a suit already instituted. (Article 1809, Civil Code; Yboleon vs.
Sison, 59 Phil., 281.) In American law, the agreement in question is
known as a judgment by consent and is generally considered as a
contract. The highest judicial authority in the United States has
sustained the proposition that when a litigation is adjusted between the
parties and said adjustment sanctioned by the decree of a court, the
agreement or settlement does not have the effect of a final judgment or
the character of res judicata, the court's approval being considered
merely as an administrative recording of what has been agreed to
between the parties.
The prior decree was the consequence of the consent and not of the
judgment of the court, and this being so, the court had the right to decline
to treat it as res judicata. (Lawrence Manufacturing Company vs.
Janesville Cotton Mills, 138 U.S., 552; 34 Law ed., 1005.)
The decrees were entered by consent, and in accordance with the
agreement, the courts merely exercising and administrative function in
recording what had been agreed to between the parties, and it was open
to the Supreme Court of Louisiana to determine, upon general principles
of law, that the validity of article VI was not in controversy or passed
upon in the causes in which the decrees were rendered. In doing so, that
court did not refuse to give due effect to the final judgment of a court of
the United States or of another State. (Texas and Pacific Railway
Company vs. Southern Pacific Company, 137 U.S., 48; 34 Law ed.,
614.)
Pursuant to the above principles, the general rule in the United States is
to allow consent judgments to be set aside on the ground of fraud or
mistake.
It was competent for the plaintiff to accept in open court the defendant's
offer to pay the alternate value of the property, as assessed, and the
execution of that agreement, as shown by the recitals of the judgment,
was in legal effect a judgment by consent discharging the property from
the operation of the judgment. Such a judgment must be "regarded as
in the nature of a contract or binding obligation between the parties
thereto, which neither, in the absence of fraud or mistake, has the right
to set aside or disregard and which, as against each, is a waiver of errors
and irregularities. Freeman on Judgments, sec. 330. Cowley vs. Farrow,
193 Ala. 381, 384, 69 So. 114. (Garrett vs. Davis, 216 Ala. 74, 112 So.
342.)
The judgment, being by consent, is to be construed as any other contract
of the parties. It constitutes the agreement made between the parties
and a matter of record by the court, at their request. The judgment, being
a contract, can only be set aside on the ground of fraud or mutual
mistake. Massey vs. Barbee, supra; Deaver vs. Jones, 19 S.E., 637, 114
N.C. 650; Lynch vs. Loftin, 69 S.E., 143, 153 N.C. 270; Bank vs.
McEwen, 76 S.E., 222, 160 N.C. 414, Ann. Cas. 1914C, 542; Gardiner
vs. May, 89 S.E., 955, 172 N.C. 192; In re Chissolm's Will, 96 S.E., 1031,
176 N.C. 211; Morris vs. Patterson, 105 S.E., 25, 180 N.C. 484; Walker
vs. Walker, 117 S.E., 167, 185 N.C. 380; Southern Distributing Co. vs.
Carraway, 127 S.E., 427, 189 N.C. 423; Smith vs. Smith, 130 S.E., 614,
190 N.C. 751; Coburn vs. Board of County Commissioners, 131 S.E.,
372. (First National Bank of Spring Hope vs. Mitchell, et al., 131 S.E.,
656, 191 N.C. 190.)
The above principles of procedure may be considered as having been
adopted in this jurisdiction by the enactment of Act No. 190, entitled a
Code of Civil Procedure in the Philippines, so the compromise
agreement in the case at bar could be set aside on the ground of fraud
or mistake, the approval of the court thereof notwithstanding. It is
suggested in the minority decision, however, that a compromise
agreement approved under the Civil Code, in accordance with article
1809, has the character of res judicata as expressly provided in article
1816 of the same Code. The provision of this article seems to be at
variance with the principles of procedure set forth above, because, as
we have pointed out, no such character is attached in judicial
proceedings in the United States to judgments or decrees entered by
consent of the parties. The provision (Article 1816), however, has no
other meaning than that the agreement is binding between the parties,
because the next article (Article 1817) expressly provides that the
agreement may be set aside on the ground of error, deceit, violence, or
forgery of documents.
ART. 1817. A compromise vitiated by error, deceit, violence, or forgery
of documents, shall be subject to the provisions of article 1265 of this
code.
Nevertheless, neither of the parties can set up an error of fact against
the other, if by reason of the compromise the latter has withdrawn from
a suit already began.
In the case of Manila Railroad Co. vs. Arzadon (20 Phil., 452), this court
insinuated that a judgment by consent may be set aside by the court
upon proof of error or fraud.
One who appears in court and consents to the entry of a judgment
against him must be held to have admitted the existence of every fact
necessary to sustain the judgment except that of the jurisdiction of the
court over the subject matter of the action. Such being the case, and
judgment having been entered upon such facts, an appeal from such
judgment by way of bill of exceptions, or otherwise, will not lie on behalf
of the party according such consent. The only remedy in such case is an
application to open the judgment upon the ground of fraud or mistake.
(Page 457.)
To the same effect is its decision in the case of Yboleon vs. Sison (59
Phil., 281), thus:
In view of the foregoing consideration, we are of the opinion and so hold
that a judge or court, which sets aside a judgment rendered upon
consent of the parties and based on a compromise entered into by them,
which is converted into such judgment, cannot amend or set it aside
without the consent of the said parties, or without first having declared
in an incidental preliminary hearing that such compromise is vitiated by
any of the grounds for nullity enumerated in article 1817 of the Civil
Code. (Page 292.)
From whatever point of view we may consider the compromise
agreement, whether as a contract or as a judgment of the court, we are
of the opinion that the petition for relief against it filed on August 12,
1950, was presented in due time. The parties expressly agreed "that the
land to be taken by the plaintiff shall be segregated by a duly qualified
surveyor, which the parties agree would be Mr. Ramon Rempillo." Under
the compromise agreement as a contract, the segregation had yet to be
made to have the contract fully and completely carried out. Under the
compromise agreement as a judgment, the segregation had yet to be
made also in order to vest the plaintiff with the title to the portion to be
segregated, and after the report of the commissioner, court approval
was intended to be obtained in the same manner as in an action of
partition. (See Sec. 11, Rule 71, Rules of Court). For all practical
purposes, the proceedings after the compromise agreement was a
partition of real estate, because a parcel of land was being divided
between the two parties to the action.
It is suggested in the minority opinion that the court did not intervene in
the designation of the commissioner. The court did not intervene
because it approved the agreement as a whole. If it approved the whole
agreement, it must also be deemed to have approved each and every
part thereof, including the designation of the commissioner who was to
make the segregation. The report of the commissioner in the
segregation was, therefore, an essential requirement to fully carry out
the agreement or judgment, and while it was not forthcoming and the
metes and bounds of the portion to be segregated for plaintiff not set
forth, the consummation of the contract was not complete. If we consider
the agreement and the court's approval thereof as a "judgment," the
same conclusion will be arrived at, i.e., that it had not yet acquired the
character of finality such that relief therefrom could be had only within
the provision of Rule 38 of the Rules of Court. The judgment was merely
an interlocutory order because something yet had to be done, i.e., the
segregation agreed upon, which, together with the court's approval, will
be the ones to give it finality.
From a broader perspective, the attempt of the parties in court to settle
their litigation in a definite manner in the case at bar should be
considered as a single proceeding. The signing of the agreement and its
submission to the court for its approval was the first act to carry out their
intent. The designation of the surveyor is another act leading to the same
final purpose. His report is still another step towards that same end, and
so would have been the parties', as well as the court's, approval thereof.
The different steps should not be taken separately, independently one
from the other. They are the necessary, inseparable, and integral parts
of one proceeding — the definite settlement of the controversy — and
while they had not all been finished and carried out, the compromise
agreement was not complete. If it was incomplete because not fully
carried out, how could any act forming part thereof acquire the character
of finality? It is against the whole proceeding, that was to be fully carried
out, that the petition for relief is directed at, not against any single part
thereof. How can the petition for relief be considered late if it was
presented even before the last parts or acts of the proceeding had been
carried out? The justice of petitioner's case is evident; it is not denied.
Would we not be adhering to a procedural technicality, to the prejudice
of a substantial right, if we deny the motion for reconsideration and the
petition for relief filed? Fortunately, the very words of the rule (Rule 38,
sec. 1) expressly authorize relief against a "proceeding" not against an
order or judgment alone. We hold that the petition for relief was filed on
time, because it was filed before the compromise agreement, a
proceeding, was consummated.
Even if we consider the motion for reconsideration of February 13, 1950,
independently, its denial may not bar the subsequent petition for relief
for other reasons. The parties expressly agreed that Ramon Rempillo
(the commissioner previously appointed by the court) was to make the
segregation of the portion to be awarded respondent, and this
commissioner did not submit his report until after June 10, 1950. (See
Annex L). Not until this report was filed did not the error both of the
commissioner and of the parties become patent, and the cause or
reason for setting aside the compromise agreement may be said to have
arisen. Petitioner may have been previously advised thereof, but until
the report was made, no formal or definite action by the court or by
petitioner was only an advance notice of the error under which he gave
his consent to the agreement. The first motion being premature, the
movant could again file another motion when the fact upon which it is
based became apparent on the record. The following cases support our
view.
The mortgage was duly foreclosed, and a decree of sale of the
mortgaged premises made and entered, and an order of sale
duly issued thereon and placed in the hands of the sheriff for execution.
On the day on which the sale was advertised to take place the plaintiff
and also one of his attorneys were present at the time and place of sale;
the plaintiff personally made a bid of an amount somewhat less than the
total sum then due. His attorney also on his behalf made a bid of the
total sum due. There were no other bidders. A misunderstanding arose
between the sheriff and the plaintiff as to the sum actually bid; the sheriff
insisting that he had struck off the property for the amount of the
plaintiff's personal bid. Thereupon, and before the sheriff had made any
return of sale, the plaintiff moved the court for an order vacating and
setting aside the sale. When this motion came on for hearing, the sheriff
not yet having made his return of sale, the court denied the motion.
Thereafter, the sheriff made his return of sale, which, while reciting the
fact that the property was sold, returned the order of sale as wholly
unsatisfied. Thereupon the plaintiff moved the court to set aside this
return of sale and direct a new order of sale to be issued. Upon the
hearing of this motion the court granted the same, and from its order to
that effect this appeal has been taken.
The first point urged by the appellants is that the trial court had no
jurisdiction to make the order appealed from for the reason that the first
order of said court denying the plaintiff's motion to vacate the sheriff's
return of sale rendered the matter res adjudicata, and hence the court
had no power to grant the plaintiff's second motion to set aside the return
of sale. The point is utterly without merit for two reasons. First, that the
two motions are dissimilar in the important respect that at the time
plaintiff's first motion was made no return of the sale had yet been made
by the sheriff, and the motion was therefore premature and doubtless
was denied for that reason, while said return of sale was on file when
the second motion was made, presenting an entirely different situation
to the trial court; and the second reason why the point is without merit is
that under the settled practice in this state the doctrine of res adjudicata
does not apply to motions, the matter of their renewal being in the
discretion of the trial court. Ford vs. Doyle, 44 Cal., 635; Bowers vs.
Cherokee Bob, 47 Pac., 686; Gay vs. Gay, 146 Cal., 237; 79 Pac.; 885.
(Johnson vs. Nelson, et al., 43 Cal., App. 113; 184 Pac., 501, 502.)
It is contended, that the court was precluded from making the order
appealed from because of the order of January 8, 1904, denying the
application for alimony previously made; that the matter was res
adjudicata. The doctrine of res adjudicata has no application to motions
in a pending action, nor is it of moment that in denying the former
application the court did so without prejudice to a renewal of the motion
"in case a motion, for a new trial is made and denied by this court." The
court did not thereby preclude itself from entertaining a motion,
subsequently made, before the disposition of the motion for a new trial,
if it thought proper to do so. A renewal of the motion, supported by no
additional evidence, might have afforded sufficient reason for the refusal
of the court to again entertain it. But where a motion is renewed, based
upon new evidence, it is within the discretion of the court to entertain it.
When the application, which was denied on January 8, 1904, was made,
no appeal from the judgment had been perfected by plaintiff. The
subsequent motion, upon which the order in question is based, was
made after such appeal was perfected, and the bill of exceptions on
motion for a new trial served and the affidavits filed. This latter motion
was made under a new state of facts, which in the judgment of the court
warranted it in again entertaining the motion, and it had the discretion to
do so. Johnson vs. Brown, 115 Cal., 697; 47 Pac., 686. (Gay vs. Gay,
146 Cal., 237, 79 Pac., 885, 837.)
In the same manner that an action, based on a cause of action that has
not yet arisen or matured, had previously been presented and
dismissed, is no bar to the action subsequently filed after the cause of
action had arisen or matured, so the denial of a premature motion may
not be considered as a bar to the second motion, filed after the ground
for the motion has arisen or come into existence.
Viewed from another angle, the so-called petition for relief dated May
26, 1950, and the supplementary one dated August 14, 1950, this having
been filed after the report of the commissioner (disclosing the error in
the previous report upon which the compromise agreement was based)
had been submitted, may be considered as amendments to the original
motion filed by the petitioner on February 13, 1950, praying that the
compromise agreement be set aside. In the case of Williamson vs.
Williamson Pulp & Paper Co., 8 Federal Rules Services, 7b. 2, case 1,
a motion filed on time was considered as amended by another motion
subsequently filed stating additional ground therefor. In another case,
Alcaro vs. Jean Jordeau, Inc., 6 Federal Rules Service, 7b.2, case 2,
additional grounds for a previous motion, already denied, were also
allowed. Both of these cases were decided by United States District
Courts from whose rules our Rule 26 on Motions has been adopted.
In the case at bar, inasmuch as at the time of the presentation of the
original motion filed by the petitioner to set aside the compromise
agreement (February 13, 1950) the report of the commissioner
disclosing the error committed in the previous report had not yet been
submitted, the petitioner should be allowed to renew or amend his
motion, setting forth the facts already found by the commissioner in his
report dated June 8, 1950, even if the first motion of petitioner had
already been denied and even if the sixty-day period had already lapsed
from the time of its denial.
In arriving at the above conclusion we have taken into account the fact
that the petitioner in the case at bar had two alternative remedies against
the compromise approved by the court. He could file the petition for relief
under Rule 38 of the Rules of Court, or file a new action to annul the
contract or agreement within the period established by the statute of
limitations. Even if his present remedy is barred, this would not prevent
him from pursuing the other remedy, filing a new action to declare the
contract void, in accordance with the provisions of the New Civil Code.
The denial by the court of the petition for relief would not be considered
as a final determination of the merits of his claim for relief, because it
was denied merely because it was filed out of the period fixed by Rule
38 of the Rules of Court, not because it was without merit. We believe,
however, that the first remedy in this same action was still available to
him when he presented his petition for relief, the objection thereto being
purely technical, which should not deter us from granting justice to
petitioner.
Summarizing what we have set forth above, we find that the compromise
agreement was entered into by petitioner in error with the utmost good
faith, error induced by the commissioner-surveyor appointed by the
court, and that the respondent court committed grave abuse of discretion
in denying the motion to set it aside. The writ is, therefore, hereby
granted, the compromise agreement set aside, the orders of the court
denying the petitions for relief vacated, and the case ordered to continue
in the court a quo for further proceedings. Without costs.
G.R. No. 86760 April 30, 1991
CITY OF ZAMBOANGA, VITALIANO D. AGAN, EFREN S. MARIANO
and PEDRO A. PACIO, petitioners,
vs.
HON. PELAGIO S. MANDI Presiding Judge of Regional Trial Court,
Branch 12, AURELIO JULIAN and BENITA LEDESMA JULIAN,
respondents.
The focal point of inquiry in this controversy is the validity and
enforceability of the Compromise Agreement entered into between the
parties, which petitioners assail as without binding force and effect by
reason of lack of this Court's approval. Hence, this Petition.
The antecedent facts hark back to 11 February 1982 when a Complaint
for Eminent Domain was lodged before the Regional Trial Court,
Branch XVI, Zamboanga City (Civil Case No. 2645)1, by petitioner City
of Zamboanga (the City, for brevity) against private respondent
spouses, Aurelio Julian and Benita Ledesma (the Julians, for short)
over the latter's 56,865 sq. m. lot (Lot No. 8) covered by TCT No. T-
49,759, situated in Abong-abong, Pasonanca, Zamboanga City
(hereinafter, the Eminent Domain Case). The expropriation was
intended for the expansion of the Pasonanca Park and for other public
purposes.
In a Decision, dated 19 March 1984, the Court a quo gave the City the
authority to enter, take and retain possession of the property sought to
be expropriated upon payment of just compensation fixed at P0.18 per
sq.m., or a total of P10,428.00.
That Decision was affirmed in toto by the Court of Appeals on 29
January 1987 (the Appellate Court Decision).2
On 12 February 1987, the Julians filed a "Notice of Appeal" to the
Supreme Court.
On 16 March 1987, the Julians wrote a letter to the then OIC Mayor
Julio Cesar F. Climaco, stating, inter alia, that pending appeal, "we are
accepting the offer of the City of Zamboanga to buy our lot at the
uniform price of P3.00 per square meter, and should this decision of
ours to sell to the City at the price stated is acceptable to the City we
will move for the dismissal of the appeal on the ground of amicable
settlement."
The Letter was endorsed to the Sangguniang Panglunsod of
Zamboanga City, which adopted Resolution No. 260 on 13 May 1987
authorizing the OIC Mayor:
. . . to sign for and in behalf of the City Government of Zamboanga the
Compromise Agreement for the acquisition of the properties of Mr.
Aurelio G. Julian located at Abong-abong, this city, at the price of
P3.00 per square meter, as submitted by the City Legal officer, subject,
however, to the approval of the Supreme Court, and if approved, to
authorize him to sign for and in behalf of the city the corresponding
deed of sale . . . . (Emphasis supplied).
On 4 June 1987, the Compromise Agreement was signed. On the
same date, the parties filed with this Court a Motion to Approve
Compromise Agreement. On 27 October 1987, the Julians, through
counsel, wrote the Clerk of Court of the Court of Appeals requesting
that the records of the case be forwarded immediately to this Court so
that the Motion to Approve Compromise Agreement could be acted on.
On 6 January 1988, notwithstanding non-approval of the Compromise
Agreement by this Court, the Sangguniang Panglunsod of the City, in
its Resolution No. 7, gave authority to the OIC Mayor to sign for and on
behalf of the City the Deed of Absolute Sale covering the acquisition by
the City of the subject lot at the price of P3.00 per sq. m. Said
Resolution did not impose any condition of prior approval by the
Supreme Court. And so it was that pursuant to the authorization
granted, the Deed was duly signed by the patties on 11 January 1988
for and in consideration of the total sum of P170,595.00 at P3.00 per
sq.m.
On 4 February 1988, the City received copy of the Entry of Judgment
of the Appellate Court Decision, showing that it had become final and
executory on 21 February 1987. Significantly, however, the Entry of
Judgment was made only on 26 January 1988 (Annex G, Petition, p.
54, Rollo).
On 24 March 1988, on the ground that the City was reneging on the
Compromise Agreement, the Julians instituted before the Regional
Trial Court of Zamboanga City, Branch 12, presided over by
respondent Judge, a Petition for mandamus (CV No. 3357) praying
that the City be made to comply with said Agreement, "particularly to
pay the Julians the amount of P170,595.00 for the purchase of Lot No.
8" (the mandamus Case).
In its Answer, the City traversed the Petition by contending that the
Julians had no cause of action against it since this Court's approval of
the Compromise Agreement was never obtained because of the
abandonment of the appeal, consequently, said Agreement never
became operative and enforceable. Moreover, according to the City,
citing Article 2040 of the Civil Code, a final judgment may not be the
subject of a compromise agreement, which must be entered into before
or during litigation and not after final judgment, the reason being that
there being no more controversy, a compromise is useless.
Deciding the Mandamus Case on 13 October 1988, respondent Judge
issued the Writ, approved the Deed of Absolute Sale entered into
between the parties on 11 January 1988 as a result of the Compromise
Agreement, and ordered the City to pay the total sum of P170,595.00
for the expropriated property at the price of P3.00 per sq.m. That
disposition relied; among others, on the ruling in Dormitorio, et al. vs.
Fernandez, et al. (L-25895, 21 August 1976, 72 SCRA 388), that a final
and executory judgment of a trial court may be novated by the
subsequent agreement of the parties.
Reconsideration sought by the City having been denied, it has availed
of this Petition for Certiorari charging that Respondent Judge acted
without or in excess of jurisdiction and with grave abuse of discretion in
granting mandamus and denying its plea for reconsideration.
This Court initially resolved to deny the Petition for failure of the City to
submit proof of service of the Petition on the lower court and on the
adverse parties, as required by Circular No. 188, paragraph 2, but
reconsidered its position upon satisfactory showing by the City that
what it had actually filed was a special civil action for Certiorari under
Rule 65, which does not require such service.
Upon the factual milieu, we uphold the challenged judgment in the
Mandamus Case.
It is true that in its resolution No. 260 of 13 May 1987, the City had
authorized the execution of the Compromise Agreement and the Deed
of Sale "subject to the approval of the Supreme Court." However, the
subsequent acts of the parties clearly show that the City was no longer
insisting on that suspensive condition. Thus, as stated in Respondent
Judge's Decision (p. 1), "immediately after the filing of notice of appeal
to the Supreme Court, the OIC Mayor negotiated for the purchase of
the subject property at P 3.00 per sq.m." "to prevent a lengthy litigation
at the Supreme Court and respondent city was also paying the same
price of P3.00 per square meter to other adjoining lot owners." The
Julians accepted the City offer in their letter of 16 March 1987. Further,
the subsequent Sangguniang Panglunsod Resolution No. 7 did away
with that condition. And to cap it all, the Deed of Sale was signed and
finalized by the parties fully cognizant that such approval had not been
obtained. By virtue of the settlement thus arrived at, the Julians
abandoned their appeal to this Court and withdrew from a pending
litigation. All these developments transpired before the entry of the
Appellate Court judgment was made on 26 January 1988.
To all intents and purposes, therefore, new rights and obligations as
between the parties had been created of their own volition. There was
clear proof of an animus novandi and an obvious intent to supersede
the previous judgment in the Eminent Domain Case. With this patent
manifestation of will, that Decision must be deemed to have been
novated by the parties themselves (cf. Dormitorio vs. Hon. Jose
Fernandez, L-25897, 21 August 1976, 72 SCRA 388), with the result
that said original Decision had lost force and effect.
The finality of the Appellate Court Decision, therefore, which was
unknown to the parties at the time of settlement, neither produced any
legal effect since the appeal had effectively been withdrawn. There
was no longer any lower Court Decision that could be the subject of an
appeal.
The City maintains, however, that it was not aware of the abandonment
of the appeal for which reason it entered into the compromise. This is
not entirely accurate, however, since it was made known that the
dismissal of the appeal was being made as a reciprocal concession for
the settlement. Besides, as provided for by Article 2038 of the Civil
Code, "one of the parties can not set up a mistake of fact as against
the other if the latter, by virtue of the compromise has withdrawn from a
litigation already commenced," as in this case, where the Julians had
desisted from pursuing their appeal.
It may be conceded that the City was unaware that the judgment in the
Eminent Domain Case had attained finality.1âwphi1 Ignorance of a
judgment, however, is not a valid ground for attacking a compromise.
The course of action should have been an action for rescission which,
in this case, has not been availed of.
Article 2040 of the Civil Code explicitly provides:
If after a litigation has been decided by a final judgment, a compromise
should be agree upon, either or both parties being unaware of the
existence of the final judgment, the compromise may be rescinded.
Ignorance of a judgment which maybe revoked or set aside is not a
valid ground for attacking a compromise.
The Julians were well within their rights in seeking the enforcement of
the compromise through a Petition for Mandamus on the strength of
Article 2041 of the Civil Code, providing that:
If one of the parties fails or refuses to abide by the compromise, the
other party may either enforce the compromise or regard it as
rescinded and insist upon his original demand.
WHEREFORE, upon the finding that the Writ of Mandamus was
properly issued, this Petition is hereby DISMISSED. No
pronouncement as to costs.
SO ORDERED.
G.R. No. L-44715-16 January 26, 1989
ERLINDA BARRERAS with her husband and DOLORES MILLAN,
petitioners,
vs.
HON. GREGORIO N. GARCIA, Presiding Judge, City Court of
Manila, Branch I, FORTUNATO G. TIMAN, and SHERIFF OF
MANILA, respondents.
J. Solano Reyes for petitioners.
SARMIENTO, J.:
On August 18 and 20, 1975, private respondent Fortunato G. Timan
and his spouse, Lydia Timan, filed two complaints for illegal detainer
separately against the petitioners Erlinda Barreras together with her
unknown husband and Dolores Millan before the City Court of Manila,
Branch I, presided over by the respondent judge, and docketed as Civil
Cases Nos. L-002795 and L-002845, respectively. Both complaints
were identical in their allegations except for the defendants' (herein
petitioners) personal circumstances.
The two complaints allege that the private respondent and his spouse
are the lawful owners of a two-storey house at 1953-A 1953-B
Oroquieta Street, Sta. Cruz, Manila, leased by petitioner Erlinda
Barreras with her unknown husband and Dolores Millan, respectively.
Both petitioners were informed that their lease would expire on June
30, 1975. The petitioners raised no objection but requested for an
extension until July 31, 1975, free of charge. However, for failure of the
petitioners to comply with the verbal agreement to vacate the leased
premises as promised on July 31, 1975, the private respondent and his
wife, through counsel, sent the petitioners two demand letters to
vacate. Again, the petitioners failed to comply.
At the hearing of these cases, two identical Compromise Agreements
were submitted by the parties, assisted by their respective counsels,
and approved by the respondent judge. The Compromise Agreements
1
read:
1. That the plaintiffs hereby allow the defendants to continue to occupy
the premises described in the complaint until May 31, 1976;
2. That in consideration of this Compromise Agreement defendant will
pay the plaintiffs the amount of P250.00 a month beginning the month
of September, 1975 as monthly rent for the reasonable use of the
same, payable on or before the 10th day of each month;
3. That defendants will vacate the premises described in the complaint
on May 31, 1976 and restore possession thereof to the plaintiffs;
4. That any violation of this agreement will entitle the plaintiffs to ask
the Court for a writ of execution.
Accordingly, the respondent judge rendered two Identical decisions on
September 11, 1975, approving the Compromise Agreements and
enjoining the parties to comply strictly and faithfully with all the terms
and conditions therein set forth.
After almost a year from the decisions approving the Compromise
Agreements and the parties complying with their respective obligations,
both petitioners flied their identical Amended Motions for
Reconsideration dated September 4, 1976 each alleging that "such
agreement and the resulting Decision thereof, is (sic) null and void in
the beginning and the Court should have disallowed the same as the
basis of the Decision, for it violates Section 4 of P.D. No. 20 which
suspends the right of the lessor to judicially eject the lessee or tenant,
under Art. 1673, N.C.C." They further contended that "the Compromise
Agreement is false because it was consummated under duress and
undue influence on the defendant herein just to ease out and railroad
the termination of her case of ejectment." Finally, the petitioners
alleged that "the Court, in issuing the Writ of Execution based on a
Decision that is null and void, acted without or in excess of its
jurisdiction or with grave abuse of discretion, as the question of
jurisdiction cannot be conferred by the parties to the Court and/or be
compromised." After, the private respondent's Opposition and
Petitioners' Replies were filed, the respondent judge, on September 17,
1976, issued two Orders denying for lack of merit the aforementioned
Amended Motions for Reconsideration.
On October 5, 1976, petitioners filed this petition with application for a
prohibitory injunction against the respondents. On October 7, 1976,
this Court issued in both cases Temporary Restraining Orders,
"effective as of this date and continuing until otherwise ordered by the
Court."
The private respondents admit in their joint Answer to the petition that
"herein respondent Judge Gregorio N. Garcia issued the corresponding
writs of execution on August 20. 1976, but with the qualification that
said motions for execution were filed after about ELEVEN (11)
MONTHS from the time that your private respondents Fortunato G.
Timan, and petitioners have executed the aforementioned
agreements." Further, the private respondents contend that the "said
compromise agreements do not run counter to the suspension of
action provided for under P.D. No. 20 as the complaints in the lower
court were based of the illegal detainer of the premises in question by
the petitioners after their rights of occupation thereof have expired."
It also appears that the petitioners accepted the refund of their two
months deposit from the previous owner of the two premises in
question. Further, the petitioners remain undisturbed in the leased
premises pursuant to the compromise agreements. They likewise paid
to the private respondents the sum of P250.00 a month from
September, 1975 to May, 1986 in accordance with the agreements.
We dismiss the petition.
A compromise agreement is a valid contract between the parties
thereto. Under Article 2028 of the Civil Code, it is a contract in which
the parties in interest, by making reciprocal concessions, avoid a
litigation or terminate one already commenced. When it is not contrary
to law, morals, or public policy, the same may be approved by the court
and a judgment be rendered in accordance therewith. The parties are
thereby enjoined to comply faithfully with its terms and conditions. The
approval of the compromise agreement by the court dismisses the
case, or considers it closed.
The law, however, anticipates situations wherein the parties refuse to
comply with the terms of a compromise agreement like in the herein
cases. Clearly therefore, when a party fails or refuses to abide by the
compromise, the other party may either enforce the compromise by a
writ of execution, or regard it as rescinded and insist upon his original
demand. Non-fulfillment of the terms of the compromise justifies
execution.
Considering these established doctrines, the respondent judge did not
commit grave abuse of discretion in issuing the disputed orders of
execution. Indeed, the petitioners failed to comply with the term of the
compromise, leaving the private respondent with no other recourse
except to apply for the writ of execution.
Invoking Section 4 of Presidential Decree No. 20, the petitioners would
want this Court to declare the Compromise Agreements they entered
into with the private respondents null and void as being contrary to law.
The ground posited has no legal basis. In Sinclair vs. Court of Appeals
2
we stated:
The provisions of P.D. 20 govern apartment-dwellers who are paying
rentals not exceeding P 300.00 a month. the decree mandates "the
freezing of rentals for the lower income group at their present levels" in
order that the rentals for the houses be stabilized. It is true that said
decree was issued to alleviate the living conditions of those in need,
owing to prevailing hard economic conditions. It should, however, not
be applied indiscriminately even to the extent of depriving the owner of
his property rights protected by the Constitution.
It is evident, the Court of First Instance applied the provisions of P.D.
20 in favor of petitioner mindless of the inequity produced thereby
against the property owner whose right as such remains entitled to the
guarantee or protection of the Constitution over which P.D. 20 cannot
prevail.
xxx xxx xxx
It should also be stressed that P.D. 20 respects obligations of contract
in obedience to the constitutional mandate that no law shall be enacted
which would impair such obligations. It therefore places no legal
obstacle to the enforcement of an existing agreement validly entered
into by the parties herein as the decision appealed from seeks to do,
which in no way runs counter to the socialistic intent and humanitarian
spirit of the decree.
xxx xxx xxx
Judicial ejectment lies when the lease is for a definite period or when
the fixed or definite period agreed upon has expired, as in these cases.
Petitioners ascribe ill motive to the private respondent for their
ejectment. We find this of no moment. Lawful ejectment of the lessee
from the premises may be enforced regardless of the lessor's motive or
intent.
While it is true that a party to a compromise agreement may move to
set it aside on the ground of fraud, mistake, or duress in which case an
appeal may be taken from the order denying the motion, the motion to
suspend the compromise agreement should meet the essential
requirements of Section 3 of Rule 38. It reads:
A petition provided for in either of the preceding sections of this rule
must be verified, filed within sixty (60) days after the petitioner learns of
the judgment, order, or other proceeding to be set aside, and not more
than six (6) months after such judgment or order was entered, or such
proceeding was taken, and must be accompanied with affidavits
showing the fraud, accident, mistake, or excusable negligence relied
upon, and the facts constituting the petitioners good and substantial
cause of action or defense, as the case may be.
Admittedly, the Amended motion for Reconsideration of the Order
approving the Compromise Agreement was filed only eleven (11)
months after receipt of the judgment of the compromise. On this score
alone, the Amended Motion would be denied for being filed out of time.
This Court frowns upon the crude grounds of the petition before us. We
perceive petitioners' ploy to unduly delay the execution of the final
judgment of the trial court. After enjoying the benefits of the
compromise agreement specifically the flat rate of P250.00 monthly
rental, and exemption from payment of the same for certain months,
the petitioners would want this Court to declare the said compromise
agreements as null and void. No better illustration of bad faith could be
gleaned than the herein petition.
In accordance with the cardinal principle of maintaining the status quo
before ruling on the Petition, a Temporary Restraining Order as of
October 7, 1976 has been issued by this Court against the trial court.
For twelve years therefore, petitioners have been staying in their
respective leased premises on their old monthly rental of P250.00. As
such, petitioners should pay their respective rentals of P250.00 each.
from June, 1976 to date, on the principle of unjust enrichment, the last
monthly payment being on May, 1976.
WHEREFORE, the petition is DISMISSED. The Temporary Restraining
Order issued on October 7, 1976 is hereby LIFTED. Both petitioners
are hereby ordered to PAY to the private respondents the monthly
rental of P250.00 each, from June, 1976 to date, with interest at the
legal rate from due date until full payment. An alias writ of execution
ordering the petitioners to vacate the leased premises and to pay the
accrued rentals with the interest hereby adjudged shall now be issued
forthwith by the trial court.
Triple costs against the Petitioners.
THIS DECISION IS IMMEDIATELY EXECUTORY.
SO ORDERED.
G.R. No. L-14220 April 29, 1961
DOMINGO E. LEONOR, plaintiff-appellee,
vs.
FRANCISCO SYCIP, defendant-appellant.
Patricio D. Senador and Ricardo D. Galano for plaintiff-appellee.
Vicente Salvadora for defendant-appellant.
CONCEPCION, J.:
Appeal from a decision of the Court of First Instance of Rizal, the
dispositive part of which reads:
IN VIEW OF THE FOREGOING, the Court hereby renders judgment
ordering the defendant, Francisco Sycip, to vacate the leased premises,
to pay plaintiff Domingo E. Leonor the back rentals from July 13, 1956
at the rate of THREE HUNDRED FIFTY (P350.00) PESOS a month until
he shall have vacated the leased premises and to pay the costs.
The case is before us, the pertinent facts having been agreed upon and
only questions of law being raised in the appeal.
On July 11, 1955, plaintiff Domingo E. Leonor and defendant Francisco
Sycip entered into a contract, whereby the former leased to the latter a
two-story building located at No. 1728-D Taft Avenue, interior, Pasay
City, for a period of two years, beginning from August 1, 1955, at a
monthly rental of P350.00. From July to October, 1956, Sycip failed to
pay the corresponding rentals in view of which, on October 12, 1956,
Leonor instituted against him, in the municipal court of Pasay City, Civil
Case No. 1972 thereof, for unlawful detainer. Inasmuch as, on October
19, 1956, one Napoleon A. Coronado agreed to guarantee the payment
of the rentals due from Sycip by assigning to Leonor his (Coronado's)
rights under a deed of chattel mortgage executed, prior thereto, by Sycip
in his (Coronado's) favor, on November 10, 1956, Leonor moved for the
dismissal of said case No. 1972, which was granted on November 12,
1956.
As Sycip kept on defaulting in the payment of rentals, Leonor requested from defendant's refusal to deliver the mortgaged property to the sheriff,
the Sheriff of Pasay City, on February 11, 1957, to cause the personal but, also, from his failure to pay, on or before December 31, 1956, the
property subject to said chattel mortgage to be foreclosed extrajudicially, sum P2,450, due on October 6, 1956, plaintiff has, under Article 2041 of
as stipulated in the contract, but this provision thereof could not be the Civil Code of the Philippines, the right eigth to "enforce the
enforced because Sycip refused to surrender' said property to the compromise or regard it as rescinded a insist upon his original demand".
sheriff. Hence, on March 7, 1957, Leonor again sued Sycip in the It is worthy of notice, in this connection, that, unlike Article 2039 of the
municipal court of Pasay City for unlawful detainer (Civil Case No. 2067), same Code, which speaks of "a cause of annulment or rescission of the
to eject him from the leased premises and collect the rentals from July, compromise" and provides that "the compromise may be annulled or
1956 to March, 1957. On the date set for the hearing of the case, Leonor rescinded" for the cause therein specified, thus suggesting an action for
introduced his evidence, after which Sycip waived his right to introduce annulment or rescission, said Article 2041 confers up the party
evidence and submitted the case for decision, which was rendered on concerned, not a "cause" for rescission, or t right to "demand" the
May 24, 1957. It sentenced Sycip to vacate said premises and to pay rescission, of a compromise, but the authority, not only to "regard it as
Leonor P3,800 as rentals due up to said date, with interest thereon at rescinded", but, also, to "insist upon his original demand". The language
the legal rate from the institution of the case, as well as the rentals that this Article 2041, particularly when contrasted with that of Article 2039,
may fall due thereafter, at the rate of P350 a month, until the premises denotes that no action for rescission required in said Article 2041, and
shall have been vacated, in addition to P150 as attorney's fees, and the that the party aggrieved by the breach of a compromise agreement may,
costs of the proceedings. if he choose bring the suit contemplated or involved in his original
On May 27, 1957, Sycip filed notice of appeal from this decision. demand, as if there had never been any compromise agreement, without
Pending perfection of the appeal, or on May 28, 1957, plaintiff moved for bringing an action for rescission thereof. He need not seek a judicial
the immediate execution of said decision, which was granted on June 1, declaration of rescission, he may "regard" the compromise agreement
1957. Pursuant to the writ of execution accordingly issued, the Sheriff of already rescinded".
Pasay City sold at public auction, on July 8, 1957, certain properties of Any other view would lead, insofar as the parties here are concerned, to
Sycip for the sum of P3,500. Deducting this sum from the amount then a splitting of plaintiff's cause of action Indeed, to seek a rescission of the
due from Sycip under the appealed decision, or P4,495.60, plus the compromise, an action would have to be brought in the court of first
expenses of execution, amounting P327.00, there remained a balance instance, such action is incapable of pecuniary estimation, where the
of P1,322.60 still due from him. Moreover, Sycip's ejectment took place unlawful detainer case would have to be filed with municipal court.
on July 13, 1957. When the appealed case was heard in the Court of Moreover, if the right of action for unlawful detainer would be
First Instance of Rizal (Civil Case No. 1756-P), Sycip maintained that it subordinated to the action for rescission of the compromise agreement,
should be dismiss upon the ground: then the latter would be a prejudicial question and the proceedings the
I. That the claim set forth in the complaint has be released; former would have to be suspended until the final disposition of the
II. That the Assignment of Chattel Mortgage which dismissed the first action for rescission. The summary naturalization of the remedy of
action (Civil Case No. 1792) a compromise agreement that had upon the unlawful detainer would thus be completely defeated or destroyed.
parties the effect and authority of Res-Judicata; Surely, the framers of Article 2041 of the Civil Code of the Philippines
III. That the second action, the case at bar, (Civil Case No. 2067) cannot could not have intended such result. The case of Bas Vda. de
be taken to mean as a rescission of the compromise agreement. Concepcion v. Santos, L-3585 (July 9, 1951), cited in appellant's brief,
Said court, however, overruled defendant's pretense an rendered the involved a compromise made on January 24, 1943, years before the
decision appealed from. A reconsideration thereof having been denied, approval of said Code, and, hence, it is not in point.
the case has been brought us on appeal taken by Sycip. In the light of the foregoing, defendant's theory to the effect that plaintiff's
Appellant says that the lower court erred in holding the claim set forth in complaint in the present case contains no allegations to warrant
the complaint herein has not been "released by novation", which he rescission of their compromise agreement is pointless, an action for
maintains, took place, because the deed of assignment by Coronado to rescission being unnecessary.
Leonor the chattel mortgage executed by Sycip in favor of Coronado Defendant brands the decision of the Court of First Instance of Rizal as
stated that the sum of P2,450 then due from Sycip was payable on vague and erroneous because it sentences him to pay the plaintiff back
December 31, 1956, whereas the contract of lease between Leonor and rentals, at the rate of P350.00 a month, from July 13, 1956 until such
Sycip stipulated that the agree rentals were "payable on or before the time as he (defendant) shall have vacated the leased premises, whereas
5th of every month'. Said assignment was made, however, on October the record on appeal shows that he had been ejected from said premises
6, 1956 and, hence, the period therein given for the payment of the on July 13, 1957, or prior to the rendition of said decision on March 29,
aforementioned sum of P2,450.00, due up to that date, did not novate 1958. This fact does 'not retract, however, from the precision and
or otherwise affect the obligation to pay the rentals accruing accuracy of said decision, for, pursuant thereto, he shall pay rentals, at
subsequently thereto, in conformity with the provisions of the the aforementioned rate, from July 13, 1956 to July 13, 1957.
aforementioned contract of leas or "on or before the 5th of every month", WHEREFORE, the decision appealed from is hereby affirmed, with
although payment of these rentals was also guaranteed by the chattel costs against defendant-appellant, Francisco Sycip.
mortgage thus assigned to Leonor. Inasmuch as Sycip continued
defaulting in the payment of such rentals, an failed to pay the same as
well as to vacate the leased premises despite repeated demands, it
follows that Leonor was entitled to seek the proper remedy against the
resulting unlawful detainer by Sycip.
Obviously, the security given to guarantee the payment of rentals falling
due after October 6, 1956, did not extinguish or novate the obligation to
satisfy the same, or impair the right of the lessor to the aforementioned
remedy (Bank of the P.I. v. Herridge, 47 Phil. 57; Asia Banking Manresa
429). There Corporation v. Lacson, 48 Phil. 482; 8 Manresa 429). There
is no incompatibility between, either this remedy or said obligation, on
the one hand, and the aforementioned security, on the other. On the
contrary, the chattel mortgage bolstered up said remedy and
strengthened the effectivity of the obligation, by insuring the collection of
the money judgment that may be rendered in the action for unlawful
detainer.
It is next urged by the defendant that plaintiff should have sought a
judicial foreclosure of the chattel mortgage or sued the guarantor
Napoleon A. Coronado. This contention is premised upon the
assumption that by plaintiff's acceptance of the assignment of chattel
mortgage, there had been a novation of the lease contract between him
and Sycip, for the period subsequent to October 6, 1956, which is not a
fact. Plaintiff had, of course, the option to seek a judicial foreclosure of
said chattel mortgage, but he was not bound to do so, for the assignment
in his favor of the chattel mortgage merely gave him additional rights. It
did not deprive him of any of his existing rights, either substantive or
procedural, except insofar as the sum of P2,450 due as rentals up to
October 6, 1956, which was made payable on or before December 31,
1956. With respect to the rentals accruing after October 6, 1956, he
retained all such rights, plus the corresponding lien on the personal
property subject to the chattel mortgage.
Contrary to defendant's pretense, plaintiff could not have sued Coronado
for, by virtue of his aforementioned assignment, the latter merely yielded
his preferred lien in favor of plaintiff herein, and did not assume any
responsibility for defendant's obligation in favor of plaintiff herein.
Besides, having violated the chattel mortgage contract, by refusing to
deliver the mortgaged property to the sheriff, for purposes of the extra-
judicial foreclosure, to which the defendant had explicitly agreed in the
deed of chattel mortgage, he may not require the plaintiff to adhere
thereto (Art. 1191,, Civil Code of the Phil.). Again, owing to the breach
of the compromise agreement between the parties, resulting, not only