Arbit-Part V |1

COMPROMISE AGREEMENT Petitioner filed an appeal in the CA docketed as CA-G.R. CV No. 54765 to
question the correctness of the valuation of ₱1,500 per sq. m. as just
1. G.R. No. 166866 March 27, 2008 compensation.8 Pending appeal, petitioner and respondents reached an
amicable settlement and agreed on the following:
REPUBLIC OF THE PHILIPPINES, represented by the PHILIPPINE
ECONOMIC ZONE AUTHORITY (PEZA) through its Director General, 1. ₱1,500 per sq. m. valuation fixed by the RTC;
LILIA B. DE LIMA, Petitioner,
vs. 2. waiver by respondents of the payment of the court-awarded 12%
ANTONIO and LILI FLORENDO,* Respondents. interest and

DECISION 3. presentation by respondents of clean titles of all the subject properties

before payment by petitioner.
CORONA, J.:
Accordingly, the parties executed a deed of absolute sale dated June 25,
This is a petition for review on certiorari 1 of the February 7, 2005 2001 which set out the terms and conditions of their settlement, the
decision2 of the Court of Appeals (CA) in CA-G.R. SP No. 86718. The CA transfer of ownership of Lot No. 4704 under TCT No. 21289 from
dismissed petitioner Republic of the Philippines' petition for certiorari and respondents to petitioner and the execution by the parties of the
prohibition assailing various orders of the Regional Trial Court (RTC), Lapu- corresponding deed of absolute sale for the remaining six lots as soon as
Lapu City, Cebu, Branch 27, in connection with the execution of the RTC's respondents could settle or clear the encumbrances or other problems
judgment dated December 21, 1993 in Civil Case No. 2415-L, as modified affecting them.9
by the decision of the CA dated June 25, 2002 in CA-G.R. CV No. 54765.
This pertained to a case for expropriation of respondent spouses Antonio Thereafter, the consideration for Lot Nos. 4705-H, 4709 and 4710 was paid
and Lili Florendo's properties.3 by petitioner and ownership was subsequently transferred to it. Petitioner
prepared a joint motion to dismiss the expropriation case but respondent
Petitioner Republic of the Philippines is represented in this case by the Antonio Florendo refused to sign because there were still three lots (Lot
Philippine Economic Zone Authority (PEZA), a government corporation Nos. 4703-B-part, 4702-C and 4702-B) which had not yet been paid.
created under RA 7916,4 as amended. Respondents could not clear these properties of their encumbrances and
liens as there were pending cases filed by third party claimants over them.
On April 14, 1991, the Export Processing Zone Authority, (PEZA),
Instead, they proposed that a partial compromise agreement be executed
predecessor of PEZA, filed a complaint for the expropriation of seven
to cover the four lots that had already been sold and transferred to PEZA.
parcels of land (Lot Nos. 4703-B-part, 4702-C, 4702-B, 4704, 4705-H,
Petitioner, however, found the proposal unacceptable and contrary to their
4709 and 4710)5located at Barrio Ibo, Lapu-Lapu City, Cebu, owned by
compromise agreement.10
respondents. The complaint was filed in the RTC of Lapu-Lapu City, Branch
27 and docketed as Civil Case No. 2415-L. The purpose of the While the parties were still trying to decide whether a partial compromise
expropriation was to establish and develop an export processing zone or a agreement or a joint motion to dismiss should be executed, the CA
part thereof on those real properties.6 rendered a decision11 in CA-G.R. CV No. 54765 dated June 25, 2002
affirming the decision of the RTC with the modification that the fair market
After trial on the merits, the RTC rendered a decision ordering the
value of the subject properties should be ₱1,000 per sq. m. instead of
expropriation of the seven parcels of land and payment of just
₱1,500 per sq. m. No appeal was taken by either party. Neither did they
compensation of ₱1,500 per sq. m. with 12% interest per annum from the
inform the CA that they had already entered into a compromise
time petitioner took possession on March 12, 1992 until full payment
agreement.12 Hence, the decision attained finality on July 18, 2002.13
thereof.7 For the aggregate area of 17,967.5 sq. m., the total
compensation was ₱26,951,250.
 Arbit-Part V |2

On October 28, 2002, respondents filed a motion for execution of the final
judgment of the CA with respect to the three parcels of land, namely Lot
Nos. 4703-B-part, 4702-C and 4702-B.14 In an order dated March 21,
2003, the RTC granted respondents’ motion and a writ of execution was
issued on April 24, 2003.15 Consequently, notices of garnishment16 were
served on the Land Bank of the Philippines, Lapu-Lapu City Branch which
was petitioner’s depository bank, for the amount of ₱6,108,300.17
not there was a supervening event that rendered the execution of the final
judgment inequitable.
The parties agree that out of the seven lots, four had been sold and paid
for. The three other lots remain unpaid because respondents could not
deliver the clean titles of these lots to petitioner in accordance with their
compromise agreement.25

On May 19, 2003, petitioner filed a motion to quash the writ of execution Petitioner argues that the parties' compromise agreement became res
and an urgent ex-parte motion to lift the garnishment. Both motions were judicata and was implemented upon the payment of the four lots.
denied by the RTC in an order dated May 21, 2004 on the ground that, Accordingly, respondents are estopped from repudiating this agreement by
since the deed of absolute sale executed by the parties while the appeal insisting on the execution of the June 25, 2002 CA decision.26
was pending in the CA was not approved by the latter, the agreement did
Respondents counter that there was no perfected compromise agreement
not bind it and did not moot the decision it promulgated. In the same
over the three remaining lots as they were not taken out of the judgment
order, the RTC ordered the sheriff to implement the writ of execution dated
of the appealed case in the CA which became final. Execution of this final
April 24, 2003.18
judgment would therefore be proper and just compensation for these
Thereafter, notices of garnishment19 were served upon business remaining lots should be paid.27
establishments and other locators of PEZA20prompting petitioner to file
We grant the petition.
motions to recall, lift and set aside the notices of garnishment.21
The pertinent terms and conditions of the parties' compromise agreement
On September 15, 2004, the RTC denied petitioner's motion for
were expressed in the "whereas" clauses of the June 25, 2001 deed of sale
reconsideration of the order dated May 21, 2004.22Aggrieved anew,
they executed:
petitioner filed a petition for certiorari and prohibition in the CA docketed
as CA-G.R. SP No. 86718.
WHEREAS, on 21 December 1993, the [RTC] rendered its decision fixing
the just compensation of the 7 lots at Php1,500 per sq.m. or a total sum of
In a decision promulgated on February 7, 2005, the CA dismissed the
Php26,951,250.00 plus twelve percent (12%) interest per annum from 12
petition for lack of merit. It held that there was no supervening event that
March 1992 until fully paid; which judgment was appealed by the VENDEE
would render execution of the judgment unjust. However, it directed that
to the Court of Appeals under CA-G.R. CV No. 54765 which is still pending
in executing the final judgment, any amount that might have already been
with the said court;
paid by petitioner to respondents with respect to the four lots should be
deducted.23
WHEREAS, the parties have mutually agreed to settle the said
expropriation case amicably with the VENDEE waiving so much of
Hence this petition with prayer for the issuance of a temporary restraining
the court awarded interest thereby saving the government much
order and writ of preliminary injunction. In a resolution dated February 21,
needed funds for other public purposes;
2005, we directed the parties to maintain the status quo before the
issuance of the order dated March 21, 2003 until further orders from the
WHEREAS, for this purpose, the Board of Directors of the VENDEE has
Court.24lavvphil
issued board Resolution No. 00-416 dated 29 December 2000 approving
the purchase of the aforementioned lots for Php26,951,250.00;
Petitioner raises the following issues: (1) whether the compromise
agreement of the parties constituted res judicataand therefore the June 25,
WHEREAS, the parties have agreed to execute a Deed of Absolute Sale
2002 decision of the CA could not have superseded it and (2) whether or
covering initially the lot under TCT No. 21289 (1 of the 7 lots of the
vendors, which has only a minor encumbrance/problem) considering that
 Arbit-Part V |3

the remaining 6 lots of the vendors either have encumbrances or are Respondents, however, insist that, as to the three lots, there was no
untitled, with the understanding that the parties shall execute the meeting of the minds because the condition relating to the delivery of clean
corresponding Deed of Absolute Sale for the remaining 6 lots the titles was not fulfilled. Respondents are wrong.
moment the VENDORS shall have settled/cleared the
encumbrances/problems affecting the other 6 lots; (Emphasis The delivery of clean titles was not a condition imposed on the perfection of
supplied) the contract of sale but a condition imposed on petitioner's obligation to
pay the purchase price of these lots.38 In Jardine Davies Inc. v. CA,39 we
xxx xxx xxx distinguished between a condition imposed on the perfection of a contract
and a condition imposed merely on the performance of an obligation. While
A compromise agreement is a contract whereby the parties make reciprocal failure to comply with the first condition results in the failure of a contract,
concessions in order to resolve their differences and thus avoid litigation or non-compliance with the second merely gives the other party options
to put an end to one already commenced.28 When it complies with the and/or remedies to protect its interests.40
requisites and principles of contracts, it becomes a valid agreement which
has the force of law between the parties.29 It has the effect and authority The next question is whether this perfected compromise agreement is valid
of res judicata once entered into,30 even without judicial approval.31 despite the finality of judgment of the CA. In Magbanua v. Uy,41 we
answered in the affirmative:
A compromise agreement is a simple contract which is perfected by mere
consent.32 From that moment of the meeting of the minds of the parties, it The issue involving the validity of a compromise agreement
becomes binding on them. To be valid, judicial approval is not required.33 notwithstanding a final judgment is not novel. Jesalva v. Bautista upheld a
compromise agreement that covered cases pending trial, on appeal, and
When a compromise agreement is given judicial approval, it becomes more with final judgment. The Court noted that Article 2040 impliedly allowed
than a contract binding upon the parties. Having been sanctioned by the such agreements; there was no limitation as to when these should be
court, it is a determination of the controversy and has the force and effect entered into. Palanca v. Court of Industrial Relations sustained a
of a judgment. It is immediately executory and not appealable, except for compromise agreement, notwithstanding a final judgment in which only the
vices of consent, forgery, fraud, misrepresentation and coercion. 34 Thus, amount of back wages was left to be determined. The Court found no
although a compromise agreement has the effect and authority of res evidence of fraud or of any showing that the agreement was contrary to
judicata upon the parties even without judicial approval, no execution may law, morals, good customs, public order, or public policy.
issue until it has received the approval of the court where the litigation is
pending and compliance with the terms of the agreement is thereupon Gatchalian v. Arlegui upheld the right to compromise prior to the execution
decreed.35 of a final judgment. The Court ruled that the final judgment had been
novated and superseded by a compromise agreement.42
The first question to answer is whether there was a perfected compromise
agreement with respect to the remaining three lots which have not been Accordingly, we hold that the compromise agreement reached by the
paid by petitioner because respondents could not deliver clean titles parties while the appeal was pending in the CA is valid. When the CA
thereto. rendered its June 25, 2002 decision, it unknowingly adjudicated a case
which, for all intents and purposes, had already been closed and
The compromise agreement the parties executed was in the form of a terminated by the parties themselves when they agreed on a
contract of sale. The elements of a valid contract of sale are: (a) consent settlement.43 It does not matter that the CA decision lapsed into finality
or meeting of the minds; (b) determinate subject matter and (c) price when neither party questioned it. A compromise agreement is still valid
certain in money or its equivalent.36 All the elements are present here. The even if there is already a final and executory judgment.44
parties agreed on the sale of a determinate object (the seven lots) and the
price certain (₱26,951,250).37 Furthermore, compromises are favored and encouraged by the
courts.45 Parties are bound to abide by them in good faith.46 Since they
 Arbit-Part V |4

have the force of law between the parties, no party may discard them
unilaterally.47

Consequently, considering that the June 25, 2002 decision of the CA had
been superseded by the compromise agreement of the parties, the various
orders of the RTC directing the execution of the said June 25, 2002 CA
decision were invalid and of no force and effect.48

And since the compromise agreement between the parties has been upheld
and the execution of the June 25, 2002 CA decision has been invalidated, it
is no longer necessary to resolve the second issue.49

WHEREFORE, the petition is hereby GRANTED. The February 7, 2005

decision of the Court of Appeals in CA-G.R. SP No. 86718 is SET ASIDE.
The following orders of the Regional Trial Court, Lapu-Lapu City, Cebu,
Branch 27 are hereby declared NULL AND VOID:

(1) order of the RTC, Lapu-Lapu City, Branch 27 dated March 21, 2003
granting respondents' motion for execution;

(2) order of the RTC dated May 21, 2004 denying petitioner’s motion to
quash writ of execution and motion to lift garnishment;

(3) order of the RTC dated September 15, 2004 denying petitioner’s
motion for reconsideration of the order dated May 21, 2004;

(4) writ of execution dated April 24, 2003 and

(5) notices of garnishment dated May 14, 2003, June 22, 2004, and
September 23, 2004, and all other orders and notices pursuant to the writ
of execution.

The status quo order issued by this Court on February 21, 2005 is LIFTED.

SO ORDERED.

2. G.R. No. 158929 August 3, 2010
ROSARIO P. TAN, Petitioner,
vs.
ARTEMIO G. RAMIREZ, MOISES G. RAMIREZ, RODRIGO G. RAMIREZ,
DOMINGO G. RAMIREZ, and MODESTA RAMIREZ
ANDRADE, Respondents.
DECISION
BRION, J.:
We resolve in this Decision the petition for review on certiorari1
filed by
petitioner Rosario P. Tan (petitioner) who seeks to reverse and set aside
the decision2 dated January 28, 2003 and the resolution3 dated June 19,
2003 of the former Seventh Division of the Court of Appeals (CA) in CA-
G.R. SP No. 66120. The assailed CA decision declared Roberto Ramirez,
father and predecessor-in-interest of respondents Artemio G. Ramirez,
Moises G. Ramirez, Rodrigo G. Ramirez, Domingo G. Ramirez, and Modesta
Ramirez Andrade (respondents), as the lawful owner of a 86,433-square
meter parcel of land in Mahaba, Apid, Inopacan, Leyte, known as Cadastral
Lot No. 3483, Case 12, CAD 637-D, Inopacan Cadastre (subject property).
The assailed CA resolution denied the petitioner’s motion for
reconsideration.
FACTUAL BACKGROUND
The facts of the case, gathered from the records, are briefly summarized
below.
On August 11, 1998, the petitioner, representing her parents (spouses
Crispo and Nicomedesa P. Alumbro), filed with the Municipal Circuit Trial
Court (MCTC) of Hindang-Inopacan, Leyte a complaint for the recovery of
ownership and possession and/or quieting of title of a one-half portion of
the subject property against the respondents.4
The petitioner alleged that her great-grandfather Catalino Jaca Valenzona
was the owner of the subject property under a 1915 Tax Declaration (TD)
No. 2724. Catalino had four children: Gliceria,5 Valentina, Tomasa, and
Julian; Gliceria inherited the subject property when Catalino died; Gliceria
married Gavino Oyao, but their union bore no children; when Gliceria died
on April 25, 1952, Gavino inherited a one-half portion of the subject
property, while Nicomedesa acquired the other half through inheritance, in
representation of her mother, Valentina, who had predeceased Gliceria,
Arbit-Part V |5
and through her purchase of the shares of her brothers and sisters. In
1961, Nicomedesa constituted Roberto as tenant of her half of the subject
property; on June 30, 1965, Nicomedesa bought Gavino’s one-half portion
of the subject property from the latter’s heirs, Ronito and Wilfredo
Oyao,6 evidenced by a Deed of Absolute Sale of Agricultural Land;7 on
August 3, 1965, Nicomedesa sold to Roberto this one-half portion in a
Deed of Absolute Sale of Agricultural Land;8 and in 1997, Nicomedesa
discovered that since 1974, Roberto had been reflecting the subject
property solely in his name under TD No. 4193.
The respondents, on the other hand, traced ownership of the subject
property to Gavino who cultivated it since 1956; Roberto bought half of the
subject property from Nicomedesa on August 3, 1965,9 and the remaining
half from Gavino’s heirs, Ronito and Wilfredo Oyao, on October 16,
1972.10 On January 9, 1975, a certain Santa Belacho, claiming to be
Gavino’s natural child, filed a complaint with the Court of First Instance of
Baybay, Leyte against Roberto, Nicomedesa, Ronito and Wilfredo Oyao,
docketed as Civil Case No. B-565, for recovery of possession and
ownership of two (2) parcels of land, including the subject property; 11 on
September 16, 1977, Roberto bought the subject property from Belacho
through a Deed of Absolute Sale of Land; and on October 5, 1977, Roberto
and Nicomedesa entered into a Compromise Agreement with Belacho to
settle Civil Case No. B-565. Belacho agreed in this settlement to dismiss
the case and to waive her interest over the subject property in favor of
Roberto, and the other parcel of land in favor of Nicomedesa in
consideration of ₱1,800.00.12
THE MCTC RULING
In a Decision dated April 2, 2001, the MCTC found that Catalino’s 1915 TD
No. 2724 was not the source of Gavino’s 1945 TD No. 3257 because it
involved the other parcel of land subject of Civil Case No. B-565. It noted
that the subject property was the conjugal property of Gavino and Gliceria;
Gliceria’s death in 1952 dissolved the conjugal partnership and entitled
Gavino to a one-half portion as his conjugal share, while Gliceria’s one-half
share should be equally divided among Gavino and Gliceria’s brothers and
sisters or their children. It held that Roberto was entitled to only three-
fourths, as this was Gavino’s entire share, while the petitioner was entitled
to one-fourth of the subject property, and gave the parties sixty days to
effect the partition.13
The MCTC brushed aside the respondents’ argument that they acquired the
subject property by ordinary acquisitive prescription, noting that bad faith
 Arbit-Part V |6

attended their possession because they were well aware of Nicomedesa’s 4. That should the parties be unable to voluntarily agree to make the
claim of ownership over a one-half portion of the subject property, long partition, they shall so inform the court within thirty days from receipt
before the property was tax declared solely in Roberto’s name in 1974. It hereof.
observed that the required thirty-year period for extraordinary acquisitive
prescription was not met because the respondents had only twenty-four 5. That the parties equally share the costs of this suit.
years of adverse possession, counted from 1974 until the filing of the
SO ORDERED.
complaint in 1998.14
II. Facts of the Case:
THE RTC RULING
a. Version of the Plaintiffs is extant on the rollo of the case summarized on
On appeal, Judge Abraham B. Apostol 15 of the Regional Trial Court (RTC),
Appeal by a MEMORANDUM but negligently forgetting to enumerate their
Branch 18, Hilongos, Leyte, rendered a two-page Decision dated June 29,
PRAYERS.
2001, which we quote in full:
b. Version of the Defendants is also extant on the records of the case and
I. The Case
clearly expanded via a MEMORANDUM.
THIS IS A COMPLAINT FOR Recovery of Ownership And Possession And/Or
III. Court Findings/Ruling:
Quieting of Title With Damages filed by Plaintiffs against defendants on a
parcel of land located at Mahaba, Apid, Inopacan, Leyte presently
THIS COURT adopts in toto the DECISION of the Court a quo, slightly
described as follows:
correcting no. 2 of the same to conform to the fallo of the DECISION which
stated a "proportion of 1:3[.]"
A parcel of land situated at Mahaba, Inopacan, Leyte, bounded on the
NORTH by Camotes Sea; EAST by Camotes Sea; SOUTH by Lot 3478,
No. 2 shall therefore read as follows:
3476, 3473, WEST by Lot 3480 covered by Tax Declaration No. 4193 in the
name of Roberto Ramirez. 2. That the shares of the parties shall be divided and apportioned in the
following manner: plaintiff shall own ONE-THIRD (1/3) of Lot 3483 and
After a full blown hearing, a DECISION was rendered, the decretal portion
defendants shall collectively own TWO-THIRDS (2/3) of Lot 3483.
being:
SO ORDERED.16
WHEREFORE, all the foregoing considered the court hereby decrees:
The respondents elevated the case to the CA via a petition for review under
1. That plaintiff and defendants are lawful co-owners of Lot 3483 as afore-
Rule 42 of the Rules of Court, insisting that the lower courts erred in
described;
finding that the petitioner is a co-owner since they have already acquired
the entire area of the subject property by ordinary acquisitive prescription.
2. That the shares of the parties shall be divided and apportioned in the
following manner: plaintiff shall own one-fourth (1/4) of Lot 3483 and
THE CA RULING
defendants shall collectively own three-fourth (3/4) of Lot 3483;
The CA decided the appeal on January 28, 2003. It set aside the Decisions
3. That the parties are hereby given sixty days from receipt hereof within
dated April 2, 2001 and June 29, 2001 of the MCTC and the RTC,
which to effect the actual partition among themselves observing the
respectively, and declared Roberto as the lawful owner of the entire area of
foregoing proportion, proportionately sharing the expenses therefor and to
the subject property. The appellate court found that the October 5, 1977
submit to the court for final approval the project of partition including the
Compromise Agreement executed by Belacho gave Roberto’s possession of
proposed subdivision plan prepared by a geodetic engineer;
the subject property the characters of possession in good faith and with
just title; the respondents’ twenty-one years of possession, from execution
 Arbit-Part V |7

of the compromise agreement in 1977 until the filing of the case in 1998, is Prescription, as a mode of acquiring ownership and other real rights over
more than the required ten-year possession for ordinary acquisitive immovable property,21 is concerned with lapse of time in the manner and
prescription. The CA also noted that Roberto also enjoyed just title because under conditions laid down by law, namely, that the possession should be
Belacho executed a contract of sale in his favor on September 16, 1977.17 in the concept of an owner, public, peaceful, uninterrupted, and
adverse.22 The party who asserts ownership by adverse possession must
After the CA’s denial18 of her motion for reconsideration,19 the petitioner prove the presence of the essential elements of acquisitive prescription.23
filed the present petition for review on certiorari under Rule 45 of the Rules
of Court. Acquisitive prescription of real rights may be ordinary or
extraordinary.24 Ordinary acquisitive prescription requires possession in
THE PETITION good faith and with just title for ten years.25 In extraordinary prescription,
ownership and other real rights over immovable property are acquired
The petitioner contends that the CA misappreciated the legal significance of
through uninterrupted adverse possession for thirty years without need of
the compromise agreement and the contract of sale, both executed by
title or of good faith.26
Belacho, and thus concluded that the respondents were possessors in good
faith and with just title and could acquire the subject property through Possession "in good faith" consists in the reasonable belief that the person
ordinary acquisitive prescription. She argues that the parties merely from whom the thing is received has been the owner thereof, and could
entered into the compromise agreement to settle the case. She further transmit his ownership.27 There is "just title" when the adverse claimant
argues that Roberto entered the contract of sale in bad faith because the came into possession of the property through one of the modes recognized
sale took place during the pendency of Civil Case No. B-565. by law for the acquisition of ownership or other real rights, but the grantor
was not the owner or could not transmit any right.28
The respondents submit that they are possessors in good faith and with
just title because Roberto bought the subject property from Belacho in a Compromise agreement not a valid basis
contract of sale dated September 16, 1977, and the compromise of possession in good faith and just title
agreement, executed on October 5, 1977, recognized Roberto’s ownership
of the subject property. We find that the CA mistakenly relied upon the compromise agreement,
executed by Belacho to conclude that the respondents were possessors in
THE ISSUE good faith and with just title who acquired the property through ordinary
acquisitive prescription.
The core issue is whether the CA erred in relying upon the compromise
agreement and the contract of sale to conclude that the respondents had In Ramnani v. Court of Appeals,29 we held that the main purpose of a
been possessors in good faith and with just title and could acquire the compromise agreement is to put an end to litigation because of the
subject property through ordinary acquisitive prescription. uncertainty that may arise from it. Reciprocal concessions are the very
heart and life of every compromise agreement.30 By the nature of a
OUR RULING
compromise agreement, it brings the parties to agree to something that
neither of them may actually want, but for the peace it will bring them
We find the petition meritorious.
without a protracted litigation.31
This Court is not a trier of facts. However, if the inference drawn by the
In the present case, to avoid any conflict with Belacho, Roberto and
appellate court from the facts is manifestly mistaken, as in the present
Nicomedesa paid ₱1,800.00 in consideration of Belacho’s desistance from
case, we can review the evidence to allow us to arrive at the correct factual
further pursuing her claim over two (2) parcels of land, including the
conclusions based on the record.20
subject property. Thus, no right can arise from the compromise agreement
Prescription as a mode of acquiring ownership because the parties executed the same only to buy peace and to write finis
to the controversy; it did not create or transmit ownership rights over the
 Arbit-Part V |8

subject property. In executing the compromise agreement, the parties, in Based on the foregoing, the CA erred in finding that the respondents
effect, merely reverted to their situation before Civil Case No. B-565 was acquired the petitioner’s one-fourth portion of the subject property through
filed. acquisitive prescription. As aptly found by the MCTC, the respondents are
only entitled to three-fourths of the subject property because this was
Contract of sale cannot support Gavino’s rightful share of the conjugal estate that Roberto bought from
claim of good faith and just title Ronito and Wilfredo Oyao.

Neither can the respondents benefit from the contract of sale of the subject RTC Decision did not conform to the
property, executed by Belacho in favor of Roberto, to support their claim of requirements of the Constitution and
possession in good faith and with just title. In the vintage case of Leung of the Rules of Court
Yee v. F.L. Strong Machinery Co. and Williamson,32 we explained good faith
in this manner: Before closing, we cannot close our eyes to the failure of the RTC decision
to measure up to the standard set by Section 14 of Article VIII of the
One who purchases real estate with knowledge of a defect or lack of title in Constitution, as well as Section 1 of Rule 36 and Section 1, Rule 120 of the
his vendor cannot claim that he has acquired title thereto in good faith as Rules on Civil Procedure, that a decision, judgment or final order
against the true owner of the land or of an interest therein; and the same determining the merits of the case shall state, clearly and distinctly, the
rule must be applied to one who has knowledge of facts which should have facts and the law on which it is based. Our Administrative Circular No. 1 of
put him upon such inquiry and investigation as might be necessary to January 28, 1988 reiterates this requirement and stresses that judges
acquaint him with the defects in the title of his vendor.33 should make complete findings of facts in their decisions, scrutinize closely
the legal aspects of the case in the light of the evidence presented, and
Good faith, or the want of it, can be ascertained only from the acts of the
avoid the tendency to generalize and to form conclusions without detailing
one claiming it, as it is a condition of mind that can only be judged by
the facts from which such conclusions are deduced.
actual or fancied token or signs.34
In Yao v. Court of Appeals,36 we emphasized:
In the present case, no dispute exists that Roberto, without Nicomedesa’s
knowledge or participation, bought the subject property on September 16, Faithful adherence to the requirements of Section 14, Article VIII of the
1977 or during the pendency of Civil Case No. B-565. Roberto, therefore, Constitution is indisputably a paramount component of due process and
had actual knowledge that Belacho’s claim to ownership of the subject fair play. It is likewise demanded by the due process clause of the
property, as Gavino’s purported heir, was disputed because he (Roberto) Constitution. The parties to a litigation should be informed of how it was
and Nicomedesa were the defendants in Civil Case No. B-565. Roberto decided, with an explanation of the factual and legal reasons that led to the
even admitted that he bought the subject property from Belacho to "avoid conclusions of the court. The court cannot simply say that judgment is
any trouble."35 He, thus, cannot claim that he acted in good faith under the rendered in favor of X and against Y and just leave it at that without any
belief that there was no defect or dispute in the title of the vendor, justification whatsoever for its action. The losing party is entitled to know
Belacho. why he lost, so he may appeal to the higher court, if permitted, should he
believe that the decision should be reversed. A decision that does not
Not being a possessor in good faith and with just title, the ten-year period
clearly and distinctly state the facts and the law on which it is based leaves
required for ordinary acquisitive prescription cannot apply in Roberto’s
the parties in the dark as to how it was reached and is precisely prejudicial
favor. Even the thirty-year period under extraordinary acquisitive
to the losing party, who is unable to pinpoint the possible errors of the
prescription has not been met because of the respondents’ claim to have
court for review by a higher tribunal. More than that, the requirement is an
been in possession, in the concept of owner, of the subject property for
assurance to the parties that, in reaching judgment, the judge did so
only twenty-four years, from the time the subject property was tax
through the processes of legal reasoning. It is, thus, a safeguard against
declared in 1974 to the time of the filing of the complaint in 1998.1avvphi1
the impetuosity of the judge, preventing him from deciding ipse dixit.
Vouchsafed neither the sword nor the purse by the Constitution but
 Arbit-Part V |9

nonetheless vested with the sovereign prerogative of passing judgment on

the life, liberty or property of his fellowmen, the judge must ultimately
depend on the power of reason for sustained public confidence in the
justness of his decision.37

The RTC decision did not distinctly and clearly set forth, nor substantiate,
the factual and legal bases for its affirmance of the MCTC decision. It
contained no analysis of the evidence of the parties nor reference to any
legal basis in reaching its conclusions. Judges must inform the parties to a
case of the legal basis for their decision so that if a party appeals, it can
point out to the appellate court the points of law to which it disagrees.
Judge Apostol should have known the exacting standard imposed on courts
by the Constitution and should not have sacrificed the constitutional
standard for brevity’s sake. Had he thoroughly read the body of the MCTC
decision, he would have clearly noted that the "proportion of 1:3," stated in
the penultimate paragraph of the decision, meant that the petitioner was
entitled to one-fourth, while the respondents were entitled to three-
fourths, of the subject property.

WHEREFORE, in light of all the foregoing, we hereby REVERSE and SET

ASIDE the decision dated January 28, 2003 and the resolution dated June
19, 2003 of the former Seventh Division of the Court of Appeals in CA-G.R.
SP No. 66120. The decision dated April 2, 2001 of the Municipal Circuit
Trial Court of Hindang-Inopacan, Leyte in Civil Case No. 196 is
REINSTATED. No pronouncement as to costs.

SO ORDERED.

3. G.R. No. 190381 October 6, 2010
COCA-COLA BOTTLERS PHILIPPINES, INC., Petitioner,
vs.
RODRIGO MERCADO, ANTONIO VILLERO, LUISITO MANTIBE,
MARCELO FABIAN, EDMUNDO YALUNG, EDILBERTO GUEVARRA,
MICHAEL GUICO, ANGEL FERNANDO, ERNESTO DELA CRUZ, EFREN
FERNANDO, ROBERTO TORRES, JIMMY DUNGO, WILLY OCAMPO,
SANDRO DIZON, ALLAN OCAMPO, CARLITO MANABAT, CARLITO
SINGIAN, JAY MANABAT, ERIC AQUINO, RODRIGO DAVID,
NICOLAS LUQUIAZ,* LUCIO MANTIBE, PRUDENCIO PALALON,
RAFAEL CABRERA, ROMMER SINGIAN,** ROGELIO MALIT, ALVIN
ANDAYA, EMERITO B. DUNGCA, ALMIRANTE GORAL,*** AND
NICOLAS CURA, Respondents.
RESOLUTION
NACHURA, J.:
Before us is a Manifestation and Motion1 filed by respondents, stating that
petitioner has satisfied the judgment award in their favor by way of a
Compromise Agreement2 dated June 16, 2010. On the basis of the
Compromise Agreement, the parties filed a motion for judgment, which
was granted by the Labor Arbiter in an Order 3 dated June 21, 2010,
declaring NLRC Case No. RAB-III-02-3910-02,4 the origin of the instant
case, as closed and terminated. Respondents pray that the petition for
review before us be dismissed for having been rendered moot and
academic by petitioner’s satisfaction of judgment. The Compromise
Agreement reads—
COMPROMISE AGREEMENT
WHEREAS, in February 2002, MICHAEL MEROVIN GUICO ["Guico"], ANGEL
FERNANDO ["Fernando"], LUISITO MANTIBE ["Mantibe"], WILLY OCAMPO
["Ocampo"], ALLAN OCAMPO ["Ocampo"], ALMERANTE GORAL ["Goral"],
CARLITO MANABAT ["Manabat"], ERNESTO DELA CRUZ ["Dela Cruz"], JAY
MANABAT ["Manabat"], NICOLAS CURA ["Cura"], SANDRO DIZON
["Dizon"], NICOLAS LUQUIAS ["Luquias"], RODRIGO MERCADO
["Mercado"], ALVIN ANDAYA ["Andaya"], ANTONIO VILLERO ["Villero"],
EDILBERTO GUEVARRA ["Guevarra"], EFREN FERNANDO ["Fernando"],
EMERITO DUNGCA ["Dungca"], ERIC AQUINO ["Aquino"], JIMMY DUNGO
["Dungo"], MARCELO FABIAN ["Fabian"], ROBERTO TORRES ["Torres"],
RODRIGO DAVID ["David"], ROMER SINGIAN ["Singian"], CARLITO
Arbit-Part V |10
SINGIAN ["Singian"], EDMUNDO YALUNG ["Yalung"], PRUDENCIO PALALON
["Palalon"], RAFAEL CABRERA ["Cabrera"], ROGELIO MALIT ["Malit"] and
LUCIO MANTIBE ["Mantibe"] (collectively, the "Complainants") were among
the complainants who filed a complaint for illegal dismissal and
regularization with claims for wage and benefits differential according to
CBA, moral and exemplary damages against COCA COLA BOTTLERS
PHILIPPINES INC. [the "Company"] docketed as NLRC Case No. RAB-III-
02-3901-02 and NLRC NCR CA No. 037888-03 entitled "Rodrigo Mercado,
et al. v. Coca-Cola Bottlers Phils., Inc., et al."
WHEREAS, on 30 September 2003, Labor Arbiter Herminio V. Suelo
rendered a Decision dismissing the Complaint against the Company;
WHEREAS, complainant’ Appeal was granted by the NLRC in its 30 July
2008 Resolution; the dispositive portion of which states:
WHEREFORE, the Motion for Reconsideration of complainants is GRANTED.
The Decision dated January 31, 2005 is SET ASIDE and VACATED, and
NEW ONE entered;
(a) declaring respondent Coca-Cola Bottlers Phils., Inc. as the employer of
complainants;
(b) finding complainants to have been dismissed illegally;
(c) ordering Coca-Cola Bottlers Philippines, Inc. to reinstate complainants
to their former positions as regular employees without loss of seniority
rights and with other privileges and with payment of full backwages from
the date of dismissal on June 3, 2002 until actual reinstatement;
(d) declaring Romac Services & Trading Co. Inc. and Rogelio S. Cunanan
General Services to be engaged in labor-only contracting; and
(e) ordering respondent Coca-Cola Bottlers Phils. Inc. to pay attorney’s
fees at 10% of the total award.
The other claims are dismissed for lack of merit.
SO ORDERED.
WHEREAS, CCBPI filed a Petition for Certiorari with the Court of Appeals
docketed as CA G.R. SP No. 108404 entitled "Coca-Cola Bottlers
Philippines, Inc. vs. National Labor Relations Commission and Rodrigo
Mercado, et al."
 Arbit-Part V |11

WHEREAS, on 20 August 2009, the Eight Division of the Court of Appeals Rodrigo Mercado 2,941,000.00
rendered a Decision denying the Petition;
Alvin Andaya 3,036,150.00
WHEREAS, the Company filed a Motion for Reconsideration which was
denied by the Court of Appeals in its 18 November 2009 Resolution; Antonio Villero 3,036,150.00

WHEREAS, the Company filed a Petition for Review on Certiorari with the Edilberto Guevarra 3,036,150.00
Supreme Court, which is docketed as G.R. No. 190381 entitled "Coca-Cola
Efren Fernando 3,036,150.00
Bottlers Philippines, Inc. vs. Rodrigo Mercado, et al."
Emerito Dungca 3,036,150.00
WHEREAS, the Company has nevertheless decided to settle/satisfy
complainants’ claims/award and thus put an end to NLRC Case No. RAB- Eric Aquino 3,036,150.00
III-02-3901-02; NLRC NCR CA No. 037888-03; CA G.R. SP No. 108404 and
G.R. No. 190381; Jimmy Dungo 3,036,150.00

NOW THEREFORE, for and in consideration of the foregoing premises and Marcelo Fabian 3,036,150.00
the mutual covenants set forth hereinbelow, the parties agree as follows:
Roberto Torres 3,036,150.00
1. Complainants shall each receive financial assistance in the amount as
Rodrigo David 3,036,150.00
follows:
Romer Singian 3,036,150.00
NAME AMOUNT
Carlito Singian 3,269,700.00
Michael Merovin Guico ₱ 2,153,850.00
Edmundo Yalung 3,269,700.00
Angel Fernando 2,266,300.00
Prudencio Palalon 3,269,700.00
Luisito Mantibe 2,266,300.00
Rafael Cabrera 3,269,700.00
Willy Ocampo 2,266,300.00
Rogelio Malit 3,269,700.00
Allan Ocampo 2,655,550.00
Lucio Mantibe 3,330,250.00
Almerante Goral 2,655,550.00
as complete settlement of their claims in NLRC NCR Case No. 00-07-
Carlito Manabat 2,655,550.00 07574-99/NLRC NCR CA No. 030908-02 and/or full satisfaction of the
judgment award, including the reinstatement aspect thereof, in CA G.R. SP
Ernesto Dela Cruz 2,655,550.00 No. 108404 and G.R. No. 190381.

Jay Manabat 2,655,550.00 2. Complainants agree that the amount received is in consideration of any
and all monetary claims they might have as well as and including
Nicolas Cura 2,655,550.00
separation pay in lieu of their actual reinstatement as regular employees
Sandro Dizon 2,655,550.00 including any other liability or claims arising from, in relation to and/or in
connection with their assignment with the Company.
Nicolas Luquias 2,941,000.00
 Arbit-Part V |12

3. By virtue of this Agreement, complainants consider their claims (Signed)

(including the reinstatement aspect thereof) in NLRC RAB III-02-3901- JAY MANABAT
02/NLRC NCR CA No. 037888-03 as fully settled, and the judgment award
in CA G.R. SP No. 108404 and G.R. No. 190381 (including the (Signed)
reinstatement aspect thereof) as fully satisfied, and hereby consider said NICOLAS CURA
cases as dismissed, with prejudice, and undertake to desist from
prosecuting and/or instituting any other case or claim against any and/or (Signed)
all the respondents. SANDRO DIZON

IN WITNESS WHEREOF, the parties have hereunto affixed their signatures (Signed)
this 16th day of June 2010 at the City of San Fernando, Pampanga. NICOLAS LUQUIAS

(Signed)
COMPLAINANTS: LAGUESMA MAGSALIN CONSULTA RODRIGO MERCADO
& GASTARDO
Counsel for Coca-Cola Bottlers (Signed)
(Signed) Philippines, Inc. ALVIN ANDAYA
MICHAEL MEROVIN GUICO 706 Prestige Tower, F. Ortigas Jr. Road
(Signed)
Ortigas Center, Pasig City
ANTONIO VILLERO
(Signed) By:
ANGEL FERNANDO (Signed)
EDILBERTO GUEVARRA
(Signed) BERNARDINO F. CONSULTA
(Signed)
LUISITO MANTIBE PTR No. 5922571; 01-11-10; Pasig City
EFREN FERNANDO
IBP No. 810944; 01-11-10; Quezon City
Roll No. 33337
(Signed)
(Signed) MCLE Compliance No. III-0010894
EMERITO DUNGCA
WILLY OCAMPO 31 March 2010
(Signed)
(Signed) (Signed)
ERIC AQUINO
ALLAN OCAMPO CARLOS LUIS L. FERNANDEZ
PTR No. 5922576; 01-11-10; Pasig City (Signed)
(Signed) IBP No. 810942; 01-11-10; Quezon City JIMMY DUNGO
Roll No. 45321
ALMERANTE GORAL MCLE Compliance No. III-0010898 (Signed)
31 March 2010 MARCELO FABIAN

(Signed) (Signed)
CARLITO MANABAT ROBERTO TORRES

(Signed) (Signed)
ERNESTO DELA CRUZ RODRIGO DAVID
 Arbit-Part V |13

(Signed) agents or employees from all liabilities arising wholly, partially or directly
ROMER SINGIAN from our temporary assignment/engagement with the Company.

(Signed) 2. x x x acknowledge the temporary nature of [their]

CARLITO SINGIAN assignment/engagement with the Company and the absence of an
employer-employee relationship between [them] and the Company, and
(Signed) [they] further acknowledge that [they] have no intention whatsoever of
EDMUNDO YALUNG being reinstated to [their] previous assignment at the Company.

(Signed)
PRUDENCIO PALALON
(Signed)
RAFAEL CABRERA
(Signed)
ROGELIO MALIT
(Signed)
LUCIO MANTIBE
Assisted by:
(Signed)
ATTY. NENITA C. MAHINAY
In its own Manifestation and Compliance,5 petitioner confirms the parties’
amicable settlement through the Compromise Agreement and professes
that it interposes no objection to respondents’ prayer for dismissal of the
petition. Petitioner also submits, aside from a copy of the Compromise
Agreement, a Joint Release, Waiver and Quitclaim6 dated June 16, 2010,
where the respondents acknowledged receipt of the amounts indicated in
the Compromise Agreement as complete settlement of all their claims
against petitioner, relative to this case, and in consideration of which
they—
1. x x x remise, release and forever discharge the Company, its
successors-in-interest, stockholders, officers, directors, agents or
employees from any action, sum of money, damages, claims and demands
whatsoever, which in law or in equity [they] ever had, now have, or which
[they, their] successors and assigns hereafter may have by reason of any
matter, cause or thing whatsoever, up to the time of these presents, the
intention hereof being completely and absolutely to release the Company
as well as its successors-in-interest, stockholders, officers, directors,
3. x x x also manifest that the payment by the Company of any or all of
the foregoing sum of money shall not be taken by [them, their] heirs or
assigns as a confession and/or admission of liability on the part of the
Company, as well as its successors-in-interest, stockholders, officers,
directors, agents or employees for any matter, cause, demand or claim
that [they] may have against any or all of them. [They] acknowledge that
[they] have received all amounts that are now, or in the future, may be
due [them] from the Company. [They] also acknowledge that during the
entire period of [their] temporary assignment/engagement with the
Company, [they] received and were paid all compensations, benefits and
privileges to which [they] were entitled under the law, and if [they] are
hereinafter be found in any manner to have been entitled to any amount,
the above consideration is a full and complete satisfaction of any and all
such undisclosed claims.
4. x x x warrant that [they] will institute no action and will not continue to
prosecute any pending action, against the Company, as well as its
successors-in-interest, stockholders, officers, directors, agents or
employees, by reason of [their] temporary assignment/engagement with
the Company, including the case docketed as G.R. No. 190381 pending
before the Supreme Court.1avvphi1
5. x x x finally declare that [they] have read and fully understand this
document, and the release, waiver and quitclaim hereby given is made
willingly and voluntarily and with full knowledge of [their] rights under the
law.7
The Joint Release, Waiver and Quitclaim was signed individually by
respondents and their counsel of record.
Under the Civil Code of the Philippines,8 contracting parties may establish
such stipulations, clauses, terms, and conditions, as they deem convenient,
so long as they are not contrary to law, morals, good customs, public
order, or public policy. A compromise agreement is a contract whereby the
 Arbit-Part V |14

parties undertake reciprocal obligations to resolve their differences in order

to avoid litigation or put an end to one already instituted. 9 It is a judicial
covenant having the force and effect of a judgment, subject to execution in
accordance with the Rules of Court, and having the effect and authority of
res judicata upon its approval by the court where the litigation is
pending.10

Finding the Compromise Agreement dated June 16, 2010 between

petitioner and respondents to be validly executed, not being contrary to
law, morals, good customs, public order, or public policy, we, therefore,
accept and affirm the same.

WHEREFORE, the Manifestation and Motion of respondents Rodrigo

Mercado, et al. is GRANTED. The Compromise Agreement dated June 16,
2010 between petitioner Coca-Cola Bottlers Philippines, Inc. and
respondents Rodrigo Mercado, et al. is AFFIRMED, and judgment is
rendered accordingly. The instant controversy is DISMISSED. No costs.

SO ORDERED.
 Arbit-Part V |15

4. G.R. No. 171820 December 13, 2007
DIAMOND BUILDERS CONGLOMERATION, ROGELIO S. ACIDRE,
TERESITA P. ACIDRE, GRACE C. OSIAS, VIOLETA S. FAIYAZ and
EMMA S. CUTILLAR, Petitioners,
vs.
COUNTRY BANKERS INSURANCE CORPORATION, Respondent.
DECISION
NACHURA, J.:
Before us is a petition for review on certiorari to annul the Decision 1 of the
Court of Appeals (CA) in CA-G.R. C.V. No. 48603, which reversed the
Decision2 of the Regional Trial Court, Branch 7, Manila (RTC Manila) in Civil
Case No. 92-62029 and granted respondent Country Bankers Insurance
Corporation’s (Country Bankers’) prayer for a sum of money against the
petitioners.
The controversy originated from a civil case3 pending before the Regional
Trial Court, Branch 125, Caloocan City (RTC Caloocan) filed by Marceliano
Borja (Borja) against Rogelio S. Acidre (Rogelio) for the latter’s breach of
his obligation to construct a residential and commercial building. Rogelio is
the sole proprietor of petitioner Diamond Builders Conglomeration (DBC).
b. [Petitioner Rogelio] admits full payment of plaintiff to him the amount of
₱1,530,000.00 leaving the balance of ₱570,000.00 of the contractual price
of ₱2,100,000.00 for the construction of the buildings aforementioned.
c. [Petitioner Rogelio] agrees to fully complete the construction of the
residential/commercial building mentioned in paragraph 1 hereof provided
plaintiff would pay to him, subject to hereunder terms, the aforesaid
amount of ₱570,000.00.
d. The plaintiff agrees to pay [petitioner Rogelio] the amount of
₱570,000.00 subject to the terms hereunder set forth and subject strictly
to the condition that [petitioner Rogelio] will finish the building above-
described pursuant to the agreements [Annex(es) "A" and "B"] set forth in
paragraph 1 hereof.
e. Plaintiff shall pay [petitioner Rogelio] the amount of ₱570,000.00 as
follows:
i. ₱370,000.00 – the 5th day from approval of this compromise agreement
by this Honorable Court and to coincide (with) the start of the 75 days for
[petitioner Rogelio] to complete the construction of the building.
ii. ₱200,000.00 – When the aforedescribed building is fully constructed
pursuant to agreements stated in paragraph 1 hereof.

To put an end to the foregoing litigation, the parties entered into a iii. Said building must be fully finished pursuant to the agreement stated in
Compromise Agreement4 which provided, in part: paragraph 1 hereof within 75 days (excluding Sundays and Holidays)
counted from receipt of payment of ₱370,000.00. The date of receipt to be
COMPROMISE AGREEMENT issued by [petitioner Rogelio] will control. The 75th day will be 12:00 noon
of the 75th day.
1. x x x
iv. From receipt of the aforesaid amount of ₱370,000.00, [petitioner
a. In lieu of rescission, the parties have mutually agreed, subject to the
Rogelio] shall submit in favor of plaintiff a performance or surety bond in
provisions hereunder, to fully implement the building contract dated
the equivalent amount of ₱370,000.00 – to answer or indemnify plaintiff in
October 1, 1990 and supplemented on October 2, 1990 with an additional
the event the building is not finished on the 75th day.
scope of work marked as Annex "A" of the complaint and the Letter-
Agreement dated November 16, 1991 signed by the [petitioner Rogelio] v. In the event the building is finished within 75 days as heretofore stated
and plaintiff’s son(,) Ferdinand A. Borja, marked as Annex "B" of the and pursuant to the agreements set forth in paragraph 1 hereof, in
complaint, which required full compliance of the structural design of Engr. addition to the amount of ₱200,000.00, the plaintiff shall also pay
Ramos and explicit reminders in the constructing of the [petitioner Rogelio] the amount of ₱90,000.00 by way of [bonus].
residential/commercial building and the additional works therein specified However, in the event [petitioner Rogelio] shall fail to fully complete the
for the added consideration of ₱100,000.00 as alleged in paragraphs 2 and construction of the building pursuant to the agreements set forth in
3 of the complaint, Annex "C" hereof. paragraph 1 hereof within 75 days as heretofore stated, [petitioner
Rogelio] shall not be entitled to any further payments and the performance
 Arbit-Part V |16

or surety bond above-mentioned shall be fully implemented by way of requested Sheriff Pangan for a 10-day grace period within which to settle
penalizing [petitioner Rogelio] and/or as award for damages in favor of the claim.13
plaintiff.
Subsequently, Rogelio filed an Urgent Omnibus Motion14 to suspend the
xxxx Writ of Execution and to resolve the Motion for Reconsideration dated June
3, 1992. Upon receipt of the Omnibus Motion, Country Bankers forthwith
f. x x x wrote Sheriff Pangan and requested that the implementation of the Writ of
Execution be held in abeyance so as not to render moot and academic the
g. That the construction herein contemplated shall not extend beyond 75
RTC Caloocan’s resolution on the Omnibus Motion.15
days. Said period shall commence five days from the date of the final
approval hereof by this Honorable Court. Nonetheless, on June 9, 1992, Country Bankers was served a Notice of
Levy/Sheriff’s Sale16 with a list of its personal properties to be sold at the
i. That any violation and/or avoidance of the terms and conditions of this
scheduled public auction on June 15, 1992.
Compromise Agreement by either of the parties herein shall forthwith
entitle the aggrieved party to an immediate execution hereof and to the The next day, or on June 10, 1992, Country Bankers verified with the RTC
necessary and corresponding reliefs and remedies therefore. (Emphasis Caloocan the status of petitioners’ Omnibus Motion. It was informed that
supplied.) the motion had yet to be acted upon. On the same date, Sheriff Pangan
arrived at Country Bankers’ office, and the latter was thus constrained to
The RTC Caloocan approved the Compromise Agreement and rendered a
pay the amount of the surety bond.17
Decision5 in accordance with the terms and conditions contained therein.
Significantly, on June 22, 1992, twelve (12) days after the satisfaction of
In compliance with the Compromise Agreement, Rogelio obtained a Surety
judgment in Civil Case No. C-14745, Rogelio filed a Petition for Certiorari
Bond6 from Country Bankers in favor of the spouses Borja.7 In this regard,
and Prohibition with Preliminary Injunction and Restraining Order18 with the
Rogelio and his spouse, petitioner Teresita P. Acidre, together with DBC
CA, docketed as CA-G.R. SP No. 28205. Although the appellate court
employees Grace C. Osias, Violeta S. Faiyaz and Emma S. Cutillar (the
issued a Temporary Restraining Order (TRO), the petition was eventually
other petitioners herein), signed an Indemnity Agreement 8 consenting to
denied due course and dismissed outright for being fait accompli, as what it
their joint and several liability to Country Bankers should the surety bond
sought to enjoin or prohibit had already been fully satisfied and executed.19
be executed upon.
In the meantime, after Country Bankers was compelled to pay the amount
On April 23, 1992, Country Bankers received a Motion for Execution 9 of the
of the surety bond, it demanded reimbursement from the petitioners under
surety bond filed by Borja with the RTC Caloocan for Rogelio’s alleged
the Indemnity Agreement.20 However, petitioners refused to reimburse
violation of the Compromise Agreement. Consequently, Country Bankers,
Country Bankers.
in a letter10 dated May 13, 1992, advised petitioners that in the event it is
constrained to pay under the surety bond to Borja, it shall proceed against In addition, upon the dismissal of their petition in CA-G.R. SP No. 28205,
petitioners for reimbursement. petitioners wrote Country Bankers and informed the latter that the
voluntary payment of the bond effectively prevented them from contesting
In turn, petitioners wrote Country Bankers informing the latter of the filing
the validity of the issuance of the Writ of Execution.21
of an Opposition to Borja’s Motion for Execution. 11 In spite of the
opposition, however, the RTC Caloocan issued a Writ of Execution 12 on May As a result, Country Bankers filed a complaint for sum of money against
25, 1992. Petitioners then filed a motion for reconsideration. the petitioners which, as previously stated, the RTC Manila dismissed. It
disposed of the case, thus:
On May 29, 1992, Sheriff Perceverando Pangan of RTC Caloocan served
Country Bankers a copy of the writ. Posthaste, Country Bankers, in writing, WHEREFORE, and considering the foregoing, judgment is hereby rendered:
 Arbit-Part V |17

1. Dismissing the complaint for lack of merit; In impugning the CA’s decision, petitioners invoke their pending Omnibus
Motion to stay the execution of the compromise judgment. Petitioners’
2. On the counterclaim, ordering [Country Bankers] to pay [petitioners] theory is that, although the RTC Caloocan had already issued a writ of
attorney’s fees of ₱50,000.00, plus the costs of suit. execution and Country Bankers had been served a Notice of Levy/Sheriff’s
Sale of its properties at the impending public auction, the payment made
SO ORDERED.
by Country Bankers to Borja is a voluntary act. Petitioners push their
theory even further, and deign to suggest that Country Bankers should
On appeal, the CA reversed and set aside the decision of the RTC Manila, to
have itself intervened in the proceedings before the RTC Caloocan to stay
wit:
the writ of execution.
WHEREFORE, premises considered, the Appeal is GRANTED and the
We reject this preposterous suggestion. Petitioners ought to be reminded
Decision dated November 2, 1992 of Branch 7 of the Regional Trial Court of
of the nature of a judgment on a compromise and a writ of execution
Manila is hereby REVERSED and a new one entered, ordering [petitioners]
issued in connection therewith.
to pay [Country Bankers] the sum of THREE HUNDRED SEVENTY
THOUSAND PESOS (₱370,000.00), as reimbursement or actual damages,
A compromise judgment is a decision rendered by a court sanctioning the
plus interest thereon at the rate of 12% per annum computed from the
agreement between the parties concerning the determination of the
date of judicial demand, or from July 24, 1992, the date of filing of the
controversy at hand. Essentially, it is a contract, stamped with judicial
complaint until the said amount has been fully paid.
imprimatur, between two or more persons, who, for preventing or putting
an end to a lawsuit, adjust their difficulties by mutual consent in the
SO ORDERED.
manner which they agree on, and which each of them prefers in the hope
In reversing the trial court, the CA ruled that Country Bankers, as surety of of gaining, balanced by the danger of losing.22 Upon court approval of a
Rogelio’s loan obligation, did not effect voluntary payment on the bond. compromise agreement, it transcends its identity as a mere contract
The appellate court found that what Country Bankers paid was an binding only upon the parties thereto, as it becomes a judgment that is
obligation legally due and demandable. It declared that Country Bankers subject to execution in accordance with Rule 39 of the Rules of Court.23
acted upon compulsion of a writ of execution, which appears to have been
Ordinarily, a judgment based on compromise is not appealable. It should
regularly, and validly issued, and, by its very nature, is immediately
not be disturbed except upon a showing of vitiated consent or forgery. The
enforceable.
reason for the rule is that when both parties enter into an agreement to
Hence, this appeal positing a sole issue for our resolution, to wit: end a pending litigation and request that a decision be rendered approving
said agreement, it is only natural to presume that such action constitutes
Whether petitioners should indemnify Country Bankers for the payment of an implicit, as undeniable as an express, waiver of the right to appeal
the surety bond. against said decision.24 Thus, a decision on a compromise agreement is
final and executory, and is conclusive between the parties.25
In fine, petitioners contend that Country Bankers is not entitled to
reimbursement when it voluntarily paid the surety bond considering it It is beyond cavil that if a party fails or refuses to abide by a compromise
knew full well the remedies availed of by petitioners to stay the execution agreement, the other party may either enforce the compromise or regard it
of the compromise judgment. Thus, Country Bankers must bear the loss or as rescinded and insist upon his original demand.26 Following this
damage arising from its voluntary act. mandatory rule, the RTC Caloocan granted Borja’s motion, and
subsequently issued an order to the sheriff to execute the compromise
We deny the appeal and affirm the appellate court’s ruling. Country judgment. Notwithstanding the foregoing, petitioners still maintain that
Bankers should be reimbursed for the ₱370,000.00 it paid to Borja under since they had taken steps to stay the execution of the compromise
the surety bond. judgment, Country Bankers, with full knowledge of their active opposition

to the execution thereof, should not have readily complied with the RTC
Caloocan Order.
Petitioners’ argument contemplates a brazen defiance of a validly issued
court order, which had not been restrained by the appellate court or this
Court. The argument is unacceptable.
The Compromise Agreement between Borja and Rogelio explicitly provided
that the latter’s failure to complete construction of the building within the
stipulated period27 shall cause the full implementation of the surety bond
as a penalty for the default, and as an award of damages to Borja.
Furthermore, the Compromise Agreement contained a default executory
clause in case of a violation or avoidance of the terms and conditions
thereof. Therefore, the payment made by Country Bankers to Borja was
proper, as failure to pay would have amounted to contumacious
disobedience of a valid court order.
Clearly, even without the aforesaid default clause, the compromise
judgment remained executory as against Rogelio, as the principal obligor
(co-debtor), and Country Bankers as surety of the obligation. Section 4,
Rule 39 of the Rules of Court provides:
SEC. 4. Judgments not stayed by appeal. – Judgments in actions for
injunction, receivership, accounting and support, and such other judgments
as are now or may hereafter be declared to be immediately executory,
shall be enforceable after their rendition and shall not be stayed by an
appeal taken therefrom, unless otherwise ordered by the trial court. On
appeal therefrom, the appellate court in its discretion may make an order
suspending, modifying, restoring or granting the injunction, receivership,
accounting, or award of support.
The stay of execution shall be upon such terms as to bind or otherwise as Petition for Certiorari and Prohibition with prayer for a TRO with the CA,
may be considered proper for the security or protection of the rights of the
adverse party.
Other judgments in actions declared to be immediately executory and not
stayed by the filing of an appeal are for: (1) compromise, 28 (2) forcible
entry and unlawful detainer,29 (3) direct contempt,30 and (4)
expropriation.31
Likewise, Section 9, paragraph (a),32 of the same Rule outlines the
procedure for execution of judgments for money, thus:
SEC. 9 Execution of judgments for money, how enforced. –
Arbit-Part V |18
(a) Immediate payment on demand. – The officer shall enforce an
execution of a judgment for money by demanding from the judgment
obligor the immediate payment of the full amount stated in the writ of
execution and all lawful fees. The judgment obligor shall pay in case,
certified bank check payable to the judgment oblige, or any other form of
payment acceptable to the latter, the amount of the judgment debt under
proper receipt directly to the judgment oblige or his authorized
representative if present at the time of payment. The lawful fees shall be
handed under proper receipt to the executing sheriff who shall turn over
the said amount within the same day to the clerk of court of the court that
issued the writ.
As Rogelio’s obligation under the compromise agreement, and approved by
the RTC Caloocan, had a penal clause33 which is monetary in nature,34 the
writ of execution availed of by Borja, and paid by Country Bankers, strictly
complied with the rules on execution of money judgments.
It is true that the petitioners did not directly question the compromise
judgment. What was pending before the Caloocan RTC was petitioners’
Omnibus Motion praying for a stay in the implementation of the writ of
execution. However, the bottom line issue raised in the Omnibus Motion is,
actually, a question on the compromise judgment, since its resolution
would require an inquiry into the stipulations contained in the Compromise
Agreement, particularly the provision on immediate execution.
Thus, when the RTC Manila ruled that the payment on the bond made by
Country Bankers was voluntary, the lower court effectively disregarded the
rule on the non-appealable nature and the immediately executory
character of a judgment on a compromise.
Moreover, it has not escaped our attention that petitioners belatedly filed a
ostensibly to stop the execution of the compromise judgment. Not only was
the filing thereof late, it was done twelve (12) days after the satisfaction of
the compromise judgment. We are, therefore, perplexed why, despite the
urgency of the matter, petitioners merely banked on a pending motion for
reconsideration to stay the enforcement of an already issued writ of
execution. Petitioners’ total reliance thereon was certainly misplaced.
Admittedly, the general rule is that certiorari will not lie unless a motion for
reconsideration is first filed before the respondent tribunal to allow it an
opportunity to correct the imputed errors.35 Nonetheless, the rule admits of
exceptions, thus:

(a) where the order is a patent nullity, as where the court a quo has no
jurisdiction;
(b) where the questions raised in the certiorari proceedings have been duly
raised and passed upon by the lower court, or are the same as those raised
and passed upon in the lower court;
(c) where there is an urgent necessity for the resolution of the question
and any further delay would prejudice the interests of the Government or
of the petitioner or the subject matter of the action is perishable;
(d) where, under the circumstances, a motion for reconsideration would be
useless;
(e) where petitioner was deprived of due process and there is extreme
urgency for relief;
(f) where, in a criminal case, relief from an order of arrest is urgent and
the granting of such relief by the trial court is improbable;
(g) where the proceedings in the lower court are a nullity for lack of due
process;
(h) where the proceedings was ex-parte or in which the petitioner had no
opportunity to object; and
(i) where the issue raised is one purely of law or where public interest is
involved.36
Evidently, it would not have been premature for petitioners to have filed a
petition before the CA, upon the issuance by the RTC Caloocan of a writ of
execution, because the RTC Caloocan already denied their Opposition to
Borja’s Motion for Execution on the surety bond. If, as petitioners insist,
they had a meritorious challenge to the satisfaction of the writ of
execution, they should have immediately filed a Petition for Certiorari with
the CA and therein alleged the exceptional circumstance warranting the
non-filing of a motion for reconsideration. Petitioners should not have
persisted on waiting for the resolution of their Omnibus Motion.
We have consistently ruled that an order for the issuance of a writ of
execution is ordinarily not appealable. The reason for this is that the merits
of the case should not be delved into anew after a determination has been
made thereon with finality.37 Otherwise, there would be practically no end
to litigation since the losing party would always try to thwart execution by
Arbit-Part V |19
appealing from every order granting the writ. In this case, this aphorism
should apply. Rogelio, after agreeing to an amicable settlement with Borja
to put an end to the case before the RTC Caloocan, cannot flout compliance
of the court order of execution by refusing to reimburse Country Bankers,
the surety of his obligation in the compromise agreement.
Still, petitioners stubbornly refuse to pay Country Bankers, contending that
the CA itself, in CA-G.R. SP No. 28205, declared that the payment effected
was voluntary.
We are not persuaded.
Article 2047 of the Civil Code specifically calls for the application of the
provisions on solidary obligations to suretyship contracts. In particular,
Article 1217 of the Civil Code recognizes the right of reimbursement from a
co-debtor (the principal co-debtor, in case of suretyship) in favor of the
one who paid (i.e., the surety).38 In contrast, Article 1218 of the Civil Code
is definitive on when reimbursement is unavailing, such that only those
payments made after the obligation has prescribed or became illegal shall
not entitle a solidary debtor to reimbursement. Nowhere in the invoked CA
Decision does it declare that a surety who pays, by virtue of a writ of
execution, is not entitled to reimbursement from the principal co-debtor.
The CA Decision was confined to the mootness of the issue presented and
petitioners’ preclusion from the relief it prayed for, i.e., a stay of the writ of
execution, considering that the writ had already been satisfied.
More importantly, the Indemnity Agreement signed by Rogelio and the
other petitioners explicitly provided for an incontestability clause on
payments made by Country Bankers.1âwphi1 The said clause reads:
INCONTESTABILITY OF PAYMENTS MADE BY THE COMPANY: - Any
payment or disbursement made by [Country Bankers] on account of the
above-mentioned Bond, its renewals, extensions, alterations or
substitutions either in the belief that [Country Bankers] was obligated to
make such payment or in the belief that said payment was necessary or
expedient in order to avoid greater losses or obligations for which [Country
Bankers] might be liable by virtue of the terms of the above-mentioned
Bond, its renewals, extensions, alterations, or substitutions, shall be final
and shall not be disputed by the undersigned, who hereby jointly and
severally bind themselves to indemnify [Country Bankers] of any and all
such payments, as stated in the preceding clauses.
 Arbit-Part V |20

In case [Country Bankers] shall have paid, settled or compromised any SO ORDERED.
liability, loss, costs, damages, attorney’s fees, expenses, claims, demands,
suits, or judgments as above-stated, arising out of or in connection with
said bond, an itemized statement thereof, signed by an officer of [Country
Bankers] and other evidence to show said payment, settlement or
compromise, shall be prima facie evidence of said payment, settlement or
compromise, as well as the liability of [petitioners] in any and all suits and
claims against [petitioners] arising out of said bond or this bond
application.

Ineluctably, petitioners are obligated to reimburse Country Bankers the

amount of ₱370,000.00.

Finally, petitioners desperately attempt to inveigle out of this burden,

which is of their own making, by imputing a lack of initiative on Country
Banker’s part to intervene in the execution proceedings before the RTC.

This contention, as with the rest of petitioners’ arguments, deserves scant

consideration. Suffice it to state that Country Bankers is a surety of the
obligation with a penal clause, constituted in the compromise judgment; it
is not a joint and solidary co-debtor of Rogelio.

In the recent case of Escaňo v. Ortigas,39 we elucidated on the distinction

between a surety as a co-debtor under a suretyship agreement and a joint
and solidary co-debtor, thus:

(A)s indicated by Article 2047, a suretyship requires a principal debtor to

whom the surety is solidarily bound by way of an ancillary obligation of
segregate identity from the obligation between the principal debtor and the
creditor. The suretyship does not bind the surety to the creditor, inasmuch
as the latter is vested with the right to proceed against the former to
collect the credit in lieu of proceeding against the principal debtor for the
same obligation. At the same time, there is also a legal tie created between
the surety and the principal debtor to which the creditor is not privy or
party to. The moment the surety fully answers to the creditor for the
obligation created by the principal debtor, such obligation is extinguished.
At the same time, the surety may seek reimbursement from the principal
debtor for the amount paid, for the surety does in fact "become subrogated
to all the rights and remedies of the creditor."

WHEREFORE, the Petition is DENIED. The Decision of the Court of Appeals

in CA-G.R. C.V. No. 48603 is hereby AFFIRMED. Costs against the
petitioner.
 Arbit-Part V |21

5. G.R. No. 174835 March 22, 2010 5.2 further, the improvement consisting of a bakery-store under lease to a
third party. The proceeds thereof shall be shared by Antonio Reyes and
ANITA REYES-MESUGAS, Petitioner, Pedro N. Reyes;
vs.
ALEJANDRO AQUINO REYES, Respondent. 5.3 that the expenses for the partition and titling of the property between
Antonio Reyes and Anita Reyes-Mesugas shall be equally shared by them.
DECISION
On December 7, 2004, petitioner filed a motion to cancel lis
CORONA, J.: pendens annotation for TCT No. 244756 in the RTC in view of the finality of
judgment in the settlement of the estate. Petitioner argued that the
This is a petition for review on certiorari1 seeking to reverse the June 23,
settlement of the estate proceeding had terminated; hence, the annotation
2006 and September 21, 2006 orders2 of the Regional Trial Court of Makati
of lis pendens could already be cancelled since it had served its purpose.
(RTC), Branch 62 denying the petitioner’s motion to cancel a notice of lis
pendens. Respondent opposed the motion and claimed that the parties, in addition to
the compromise agreement, executed "side agreements" which had yet to
Petitioner Anita Reyes-Mesugas and respondent Alejandro A. Reyes are the
be fulfilled. One such agreement was executed between petitioner 7 and
children of Lourdes Aquino Reyes and Pedro N. Reyes. Lourdes died
respondent granting respondent a one-meter right of way on the lot
intestate, leaving to her heirs, among others, three parcels of land,
covered by TCT No. 24475. However, petitioner refused to give the right of
including a lot covered by Transfer Certificate of Title (TCT) No. 24475.
way and threatened to build a concrete structure to prevent access. He
argued that, unless petitioner permitted the inscription of the right of way
On February 3, 2000, respondent filed a petition for settlement of the
on the certificate of title pursuant to their agreement, the notice of lis
estate of Lourdes, praying for his appointment as administrator due to
3
pendens in TCT No. 24475 must remain.
alleged irregularities and fraudulent transactions by the other heirs.
Petitioner, her father Pedro and Arturo, a sibling of the petitioner, opposed
In its order8 dated January 26, 2006, the RTC denied the motion to cancel
the petition.
the notice of lis pendens annotation for lack of sufficient merit. It found
that the cancellation of the notice of lis pendens was unnecessary as there
On August 30, 2000, a compromise agreement was entered into by the
4
were reasons for maintaining it in view of petitioner's non-compliance with
parties whereby the estate of Lourdes was partitioned. A decision dated5
the alleged right of way agreement between the parties. It stated that:
September 13, 2000 was rendered by the RTC pursuant to the said
compromise agreement. The compromise agreement with respect to TCT
A careful perusal of the compromise agreement dated September 13, 2000
No. 24475 is reproduced below:
revealed that one of the properties mentioned is a parcel of land with
improvements consisting [of] two hundred nine (209) square meters
5. That the parties hereto hereby agree to recognize, acknowledge and
situated in Makati covered under TCT No. 24475 of the Registry of Deeds
respect:
[of] Rizal in the name of Pedro N. Reyes married to Lourdes Aquino Reyes
5.1. the improvements found on the parcel of land covered under TCT No. and form[s] part of the notarized right of way agreement on TCT No.
24475 of the Registry of Deeds of Rizal consisting of two lots namely Lot 4- 24475, considering that the movant Anita Reyes is still bound by the right
A and Lot 4-B of the new survey with two (2) residential houses presently of way agreement, the same should be complied with before the
occupied and possessed as owners thereof by Antonio Reyes and Anita cancellation of the subject annotation. (Citations omitted)
9

Reyes-Mesugas to constitute part of their shares in the estate of Lourdes

Petitioner filed a notice of appeal.10 Because the denial of a motion to
Aquino Reyes;
cancel the notice of lis pendens annotation was an interlocutory order, the
RTC denied the notice of appeal as it could not be appealed until the
 Arbit-Part V |22

judgment on the main case was rendered.11 A motion for reconsideration to be protected. Any alleged right arising from the "side agreement" on the
was filed by petitioner but the same was also denied.12
Hence, this petition.
We find for petitioner.
A compromise is a contract whereby the parties, by making reciprocal
concessions, avoid litigation or put an end to one already
commenced.13 Once submitted to the court and stamped with judicial
approval, it becomes more than a mere private contract binding upon the
parties; having the sanction of the court and entered as its determination
of the controversy, it has the force and effect of any judgment.14
Consequently, a judgment rendered in accordance with a compromise
agreement is immediately executory as there is no appeal from such
judgment.15 When both parties enter into an agreement to end a pending
litigation and request that a decision be rendered approving said
agreement, such action constitutes an implied waiver of the right to appeal
against the said decision.16
In this instance, the case filed with the RTC was a special proceeding for
the settlement of the estate of Lourdes. The RTC therefore took cognizance
of the case as a probate court.
right of way can be fully protected by filing an ordinary action for specific
performance in a court of general jurisdiction.1avvphi1
More importantly, the order of the probate court approving the compromise
had the effect of directing the delivery of the residue of the estate of
Lourdes to the persons entitled thereto under the compromise agreement.
As such, it brought to a close the intestate proceedings20 and the probate
court lost jurisdiction over the case, except only as regards to the
compliance and the fulfillment by the parties of their respective obligations
under the compromise agreement.
Having established that the proceedings for the settlement of the estate of
Lourdes came to an end upon the RTC’s promulgation of a decision based
on the compromise agreement, Section 4, Rule 90 of the Rules of Court
provides:
Sec. 4. Recording the order of partition of estate. - Certified copies of final
orders and judgments of the court relating to the real estate or the
partition thereof shall be recorded in the registry of deeds of the province
where the property is situated.
In line with the recording of the order for the partition of the estate,
paragraph 2, Section 77 of Presidential Decree (PD) No. 152921 provides:

Settled is the rule that a probate court is a tribunal of limited jurisdiction. It
acts on matters pertaining to the estate but never on the rights to property
arising from the contract.17 It approves contracts entered into for and on
behalf of the estate or the heirs to it but this is by fiat of the Rules of
Court.18 It is apparent therefore that when the RTC approved the
compromise agreement on September 13, 2000, the settlement of the
estate proceeding came to an end.
Moreover, a notice of lis pendens may be cancelled when the annotation is
not necessary to protect the title of the party who caused it to be
recorded.19 The compromise agreement did not mention the grant of a
right of way to respondent. Any agreement other than the judicially
approved compromise agreement between the parties was outside the
limited jurisdiction of the probate court. Thus, any other agreement
entered into by the petitioner and respondent with regard to a grant of a
right of way was not within the jurisdiction of the RTC acting as a probate
court. Therefore, there was no reason for the RTC not to cancel the notice
of lis pendens on TCT No. 24475 as respondent had no right which needed
Section 77. Cancellation of Lis Pendens – xxx xxx xxx
xxx xxx
At any time after final judgment in favor of the defendant, or other
disposition of the action such as to terminate finally all rights of the
plaintiff in and to the land and/or buildings involved, in any case in
which a memorandum or notice of lis pendens has been registered as
provided in the preceding section, the notice of lis pendens shall be
deemed cancelled upon the registration of a certificate of the clerk of
court in which the action or proceeding was pending stating the manner of
disposal thereof. (emphasis supplied)
Thus, when the September 13, 2000 decision was recorded in the Registry
of Deeds of Rizal pursuant to Section 4, Rule 90 of the Rules of Court, the
notice of lis pendens inscribed on TCT No. 24475 was deemed cancelled by
virtue of Section 77 of PD No. 1529.
 Arbit-Part V |23

WHEREFORE, the petition is hereby GRANTED. The Orders of the

Regional Trial Court of Makati, Branch 62 dated June 23, 2006 and
September 21, 2006 are SET ASIDE. The notice of lis pendens annotated
on TCT No. 24475 is hereby declared CANCELLED pursuant to Section 77
of the PD No. 1529 in relation to Section 4, Rule 90 of the Rules of Court.

SO ORDERED.

6. G.R. No. 178591 July 26, 2010
SM SYSTEMS CORPORATION (formerly Springsun Management
Systems Corporation), Petitioner,
vs.
OSCAR CAMERINO, EFREN CAMERINO, CORNELIO MANTILE,
DOMINGO ENRIQUEZ, and HEIRS OF NOLASCO DEL
ROSARIO, Respondents.
RESOLUTION
NACHURA, J.:
This is a petition for review on certiorari of the Court of Appeals (CA)
Decision1 dated October 23, 2006, and its Resolution2 dated June 29, 2007,
in CA-G.R. SP No. 92994.
The facts of the case, as summarized in Springsun Management Systems
Corporation v. Camerino,3 and as found by the CA, are as follows:
Victoria Homes, Inc. (Victoria Homes) was the registered owner of three
(3) lots (subject lots), covered by Transfer Certificate of Title (TCT) Nos.
(289237) S-6135, S-72244, and (289236) S-35855, with an area of
109,451 square meters, 73,849 sq m, and 109,452 sq m, respectively.
These lots are situated in Barrio Bagbagan, Muntinlupa, Rizal (now
Barangay Tunasan, Muntinlupa City, Metro Manila).
Since 1967, respondents Oscar Camerino, Efren Camerino, Cornelio
Mantile, Domingo Enriquez, and Nolasco del Rosario (herein represented by
his heirs) were farmers-tenants of Victoria Homes, cultivating and planting
rice and corn on the lots.
On February 9, 1983 and July 12, 1983, Victoria Homes, without notifying
respondents, sold the subject lots to Springsun Management Systems
Corporation (Springsun), the predecessor-in-interest of petitioner SM
Systems Corporation.4 The Deeds of Sale were registered with the Registry
of Deeds of Rizal. Accordingly, TCT Nos. (289237) S-6135, (289236) S-
35855, and S-72244 in the name of Victoria Homes were cancelled and, in
lieu thereof, TCT Nos. 120541, 120542, and 123872 were issued in the
name of Springsun. Springsun subsequently mortgaged the subject lots to
Banco Filipino Savings and Mortgage Bank (Banco Filipino) as security for
its various loans amounting to ₱11,545,000.00. When Springsun failed to
pay its loans, the mortgage was foreclosed extra-judicially. At the public
Arbit-Part V |24
auction sale, the lots were sold to Banco Filipino, being the highest bidder,
but they were eventually redeemed by Springsun.
On March 7, 1995, respondents filed with the Regional Trial Court (RTC),
Branch 256, Muntinlupa City, a complaint against Springsun and Banco
Filipino for Prohibition/Certiorari, Reconveyance/Redemption, Damages,
Injunction with Preliminary Injunction and Temporary Restraining Order or,
simply, an action for Redemption.5 On January 25, 2002, the RTC rendered
a decision6 in favor of respondents, authorizing them to redeem the subject
lots from Springsun for the total price of ₱9,790,612.00. On appeal to the
CA, the appellate court affirmed the RTC decision with a modification on
the award of attorney’s fees.7
Aggrieved, Springsun elevated the matter to this Court via a petition for
review on certiorari. The case was docketed as G.R. No. 161029. On
January 19, 2005, we affirmed the CA Decision.8 With the denial of
Springsun’s motion for reconsideration, the same became final and
executory; accordingly, an entry of judgment was made.9 Respondents
thus moved for the execution of the Decision.10
Petitioner11 instituted an action for Annulment of Judgment with prayer for
the issuance of a Temporary Restraining Order before the CA, docketed as
CA-G.R. SP No. 90931.12 Petitioner sought the annulment of the RTC
decision allowing respondents to redeem the subject property. Petitioner
argued that it was deprived of the opportunity to present its case on the
ground of fraud, manipulations and machinations of respondents. It further
claimed that the Department of Agrarian Reform, not the RTC, had
jurisdiction over the redemption case. The CA, however, dismissed the
petition on October 20, 2005.13 Its motion for reconsideration was also
denied for lack of merit.14 The matter was elevated to this Court via a
petition for review on certiorari in G.R. No. 171754, but the same was
denied on June 28, 2006.15 After the denial of its motion for
reconsideration, the Decision became final and executory; and an entry of
judgment was subsequently made.16
Meanwhile, on December 18, 2003, respondents executed an Irrevocable
Power of Attorney in favor of Mariano Nocom (Nocom), authorizing him,
among other things, to comply with our January 19, 2005 Decision by
paying the redemption price to Springsun and/or to the
court.17 Respondents, however, challenged the power of attorney in an
action for revocation with the RTC. In a summary judgment, the RTC
annulled the Irrevocable Power of Attorney for being contrary to law and
public policy. The RTC explained that the power of attorney was a disguised

conveyance of the statutory right of redemption that is prohibited under
Republic Act No. 3844. The CA affirmed the RTC decision. However, this
Court, in G.R. No. 182984, set aside the CA Decision and concluded that
the RTC erred in rendering the summary judgment. The Court thus
remanded the case to the RTC for proper proceedings and proper
disposition, according to the rudiments of a regular trial on the merits and
not through an abbreviated termination of the case by summary judgment.
On August 4, 2005, as petitioner refused to accept the redemption amount
of ₱9,790,612.00, plus ₱147,059.18 as commission, respondents deposited
the said amounts, duly evidenced by official receipts, with the RTC. The
RTC further granted respondents’ motion for execution and, consequently,
TCT Nos. 120542, 120541, and 123872 in the name of petitioner were
cancelled and TCT Nos. 15895, 15896, and 15897 were issued in the
names of respondents. It also ordered that the "Irrevocable Power of
Attorney," executed on December 18, 2003 by respondents in favor of
Nocom, be annotated in the memorandum of encumbrances of TCT Nos.
15895, 15896, and 15897.18
On August 20, 2005, petitioner and respondents (except Oscar Camerino)
executed a document, denominated as Kasunduan,19 wherein the latter
agreed to receive ₱300,000.00 each from the former, as compromise
settlement. Petitioner then filed a Motion to Hold Execution in Abeyance on
the Ground of Supervening Event.20
On September 7, 2005, the RTC denied petitioner’s motion, thus:
WHEREFORE, in view of the foregoing, defendant’s Motion to Hold in
Abeyance Execution on Ground of Supervening Event is denied and the
Kasunduan separately entered into by Efren Camerino, Cornelio Mantile,
Domingo Enriquez[,] and the Heirs of Nolasco del Rosario are hereby
disapproved.
SO ORDERED.21
Aggrieved by the aforesaid Order and the denial of its motion for
reconsideration, petitioner elevated the matter to the CA. On May 8, 2006,
counsel for respondents moved that they be excused from filing the
required comment, considering that only Oscar Camerino was impleaded as
private respondent in the amended petition; and also because respondents
already transferred pendente lite their contingent rights over the case in
favor of Nocom.22Nocom, in turn, filed a Motion for Leave of Court to Admit
Attached Comment to the Petition.23
Arbit-Part V |25
On October 23, 2006, the appellate court rendered the assailed Decision,
finding petitioner guilty of forum shopping. The CA concluded that the
present case was substantially similar to G.R. No. 171754. It further held
that the compromise agreement could not novate the Court’s earlier
Decision in G.R. No. 161029 because only four out of five parties executed
the agreement.
Undaunted, petitioner comes before us in this petition for review on
certiorari, raising the following issues:
1. Whether or not the Kasunduan effectively novated the judgment
obligation.
2. Whether or not the Court should rule on the Motion to Expunge the
Comment of Mariano Nocom filed by the Petitioner.
3. Whether or not Mariano Nocom should be allowed to participate in the
instant case on the basis of the null and void Irrevocable Power of
Attorney.
4. Whether or not the (sic) there is grave abuse of discretion when Judge
Lerma denied the Motion to inhibit filed by Petitioner despite Judge Lerma’s
clear showing of partiality for the other party.
5. Whether or not there is forum-shopping.24
Contrary to the conclusion of the CA, we find petitioner not guilty of forum
shopping.
Forum shopping is the act of a litigant who repetitively avails of several
judicial remedies in different courts, simultaneously or successively, all
substantially founded on the same transactions and on the same essential
facts and circumstances, and all raising substantially the same issues
either pending in or already resolved adversely by some other court, to
increase his chances of obtaining a favorable decision if not in one court,
then in another.25
The rationale against forum shopping is that a party should not be allowed
to pursue simultaneous remedies in two different fora. Filing multiple
petitions or complaints constitutes abuse of court processes, which tends to
degrade the administration of justice, wreaks havoc upon orderly judicial
procedure, and adds to the congestion of the heavily burdened dockets of
the courts. Thus, the rule proscribing forum shopping seeks to promote
candor and transparency among lawyers and their clients in the pursuit of
 Arbit-Part V |26

their cases before the courts to promote the orderly administration of finality of the decision.29 A reciprocal concession inherent in a compromise
justice, to prevent undue inconvenience upon the other party, and to save agreement assures benefits for the contracting parties. For the defeated
the precious time of the courts. It also aims to prevent the embarrassing litigant, obvious is the advantage of a compromise after final judgment as
situation of two or more courts or agencies rendering conflicting resolutions the liability decreed by the judgment may be reduced. As to the prevailing
or decisions upon the same issue.26 party, it assures receipt of payment because litigants are sometimes
deprived of their winnings because of unscrupulous mechanisms meant to
To determine whether a party violated the rule against forum shopping, the delay or evade the execution of a final judgment.301avvphi1
most important question to ask is whether the elements of litis pendentia
are present or whether a final judgment in one case will result to res As much as we would like to settle the issues raised in this petition, we
judicata in another.27 cannot make a definitive conclusion on the validity of the compromise
agreement because of some facts that complicate the present case.
It is true that after the finality of this Court’s Decision in G.R. No. 161029
dated January 19, 2005, petitioner instituted and filed various petitions and We must recall that, in our January 19, 2005 Decision, we upheld
motions which essentially prevented the execution of the aforesaid respondents’ right to redeem the subject lots for ₱9,790,612.00. On
Decision. Yet, we do not agree with the CA that the instant case is December 18, 2003, respondents executed an Irrevocable Power of
dismissible because it earlier filed an action for annulment of judgment that Attorney in favor of Nocom, authorizing him to redeem the subject lots.
involved substantially the same set of facts, issues, and reliefs sought. Pursuant to the aforesaid authority, Nocom deposited with the court the
While petitioner’s goal in filing the instant case is the same as that in G.R. redemption money plus commission on August 4, 2005. Consequently, the
No. 171754 (which stemmed from the petition for annulment of judgment), certificates of title in the name of petitioner were cancelled, and new ones
that is to prevent the execution of the January 19, 2005 Decision, still, were issued in the name of respondents. It was only on August 20, 2005
there is no forum shopping. that petitioner and respondents executed the Kasunduan or the
compromise agreement. Although we could have easily declared that the
In the action for annulment of judgment, petitioner sought the nullification agreement was invalid as there was nothing more to compromise at that
of the January 19, 2005 Decision on the ground that it was deprived of its time with the redemption of the property by Nocom, yet, as narrated
opportunity to present its case and that the RTC had no jurisdiction to earlier, respondents assailed in a separate case the validity of the
decide the case. While in the instant case, petitioner prays that the Irrevocable Power of Attorney
execution of the January 19, 2005 Decision be held in abeyance in view of
the compromise agreement entered into by petitioner and four allegedly executed by them in favor of Nocom. The case had reached this
respondents. In short, the issue threshed out in the annulment case was Court in G.R. No. 182984, but we remanded it to the RTC of Muntinlupa
the validity of the 2005 Decision, while in this case, the issue is focused on City, Branch 203, for further proceedings and in accordance with the
the effect of the compromise agreement entered into after the finality of rudiments of a regular trial, with the instruction not to dispose of the case
the Decision sought to be executed. Clearly, therefore, there is no identity through a summary judgment.
of issues in the two cases.
The Court notes that respondents herein are the farmers-tenants, but
In view of the foregoing, a review of the assailed Decision is in order, records show that the pleadings in answer to the petition were filed by
particularly on the effect of the compromise agreement entered into after Nocom for and in his own behalf. Nocom is actively participating herein on
final judgment has been rendered. the basis of the questioned Irrevocable Power of Attorney. But to date, the
authority of Nocom to exercise the right of redemption is still in issue in a
Once a case is terminated by final judgment, the rights of the parties are separate case.
settled; hence, a compromise agreement is no longer necessary. 28 Though
it may not be prudent to do so, we have seen in a number of cases that With the foregoing discussion, the resolution of the issues herein have to
parties still considered and had, in fact, executed such agreement. To be be held in abeyance, pending the settlement of the questions raised in the
sure, the parties may execute a compromise agreement even after the other action.31 We are not unmindful of the right of every party to a speedy
 Arbit-Part V |27

disposition of his case,32 but the rights of the parties herein cannot be
properly determined until the resolution of the issues in the other action.

The court in which an action is pending may, in the exercise of sound

discretion, hold the action in abeyance to abide by the outcome of another
case pending in another court.33 Undeniably, the power to stay proceedings
is an incident to the power inherent in every court to control the disposition
of the cases on its dockets, considering its time and effort, and those of
counsel and litigants.34 Every order suspending proceedings must be
guided by the following precepts: it shall be done in order to avoid
multiplicity of suits and to prevent vexatious litigations, conflicting
judgments, confusion between litigants and courts, or when the rights of
parties to the second action cannot be properly determined until the
questions raised in the first action are settled.35

WHEREFORE, premises considered, the resolution of this petition is hereby

SUSPENDED or HELD IN ABEYANCE until after the proceedings in Civil Case
No. 05-172 shall have been terminated.

Let a copy of this Resolution be furnished the Regional Trial Court of

Muntinlupa City, Branch 203, where the above-cited case is pending. The
said court is hereby directed to resolve the case pending before it with
dispatch.

SO ORDERED.