Republic of the
SUPREME COURT
SECOND DIVISION
DOMINGO REALTY, INC. G.R. No. 126236
and AYALA STEEL
MANUFACTURING
CO., INC.,
Petitioners,
Present:
QUISUMBING,
J., Chairperson,
- versus - CARPIO,
CARPIO
MORALES,
TINGA,
and
VELASCO,
JR., JJ.
COURT OF APPEALS and Promulgated:
ANTONIO M.
ACERO,
Respondents. January 26, 2007
x-----------------------------------------------------------------------------------------x
D E C I S I O N
VELASCO,
JR., J.:
Good judgment comes from experience, and often experience
comes from bad judgment.
–– Rita Mae Brown
The
Case
This Petition for Review on Certiorari,
under Rule 45 of the Revised Rules of Court, seeks the reversal of the October
31, 1995 Decision[1] of the
Court of Appeals (CA) in CA-G.R. SP No. 33407, entitled Antonio M. Acero v. Hon. Sofronio G. Sayo, et al., which annulled
the December 7, 1987 Decision based on a Compromise Agreement among petitioner
Domingo Realty, Inc. (Domingo Realty), respondent Antonio M. Acero, and
defendant Luis Recato Dy in Civil Case No. 9581-P before the Pasay City
Regional Trial Court (RTC), Branch CXI; and the August 28, 1996 Resolution[2] of
the CA which denied petitioners’ Motion for Reconsideration of its October 31,
1995 Decision.
The Facts
On
November 19, 1981, petitioner Domingo Realty filed its November 15, 1981
Complaint[3] with the Pasay City RTC against
Antonio M. Acero, who conducted business under the firm name A.M. Acero Trading,[4]
David Victorio, John Doe, and Peter Doe, for recovery of possession of three
(3) parcels of land located in Cupang, Muntinlupa, Metro Manila, covered by (1)
Transfer Certificate of Title (TCT) No. (75600) S-107639-Land Records of Rizal;
(2) TCT No. (67006) S-107640-Land Records of Rizal; and (3) TCT No. (67007)
S-107643-Land Records of Rizal (the “subject properties”). The said lots have an aggregate area of
26,705 square meters, more or less, on a portion of which Acero had constructed
a factory building for the manufacture of hollow blocks, as alleged by Domingo
Realty.
On
On
1. That
defendants admit and recognize the ownership of the plaintiff over the property
subject of this case, covered by TCT No. S-107639 (75600), S-107643 (67007),
and S-107640 (67006) with a total area of 26,705 square meters;
2. That
defendant Luis Recato Dy admits and recognizes that his title covered by TCT
No. 108027 has been proven not to be genuine and that the area indicated
therein is inside the property of the plaintiff;
3. That
defendant Acero admits that the property he is presently occupying by way of
lease is encroaching on a portion of the property of the plaintiff and assume[s]
and undertakes to vacate, remove and clear any and all structures erected
inside the property of the plaintiff by himself and other third parties, duly
authorized and/or who have an existing agreement with defendant Acero, and
shall deliver said portion of the property of the plaintiff free and clear of
any unauthorized structures, shanties, occupants, squatters or lessees within a
period of sixty (60) days from date of signing of this compromise agreement. Should defendant Acero fail in his obligation
to vacate, remove and clear the structures erected inside the property of the
plaintiff within the period of 60 days afore-mentioned, plaintiff shall be
entitled to a writ of execution for the immediate demolition or removal of said
structure to fully implement this agreement; and ejectment of all squatters and
occupants and lessees, including the dependents to fully implement this
agreement;
4. That
plaintiff admits and recognizes that defendant Luis Recato Dy bought and
occupied the property in good faith and for value whereas defendant Acero
leased the portion of said property likewise in good faith and for value hereby
waives absolutely and unconditionally all claims including attorney’s fees
against both defendants in all cases pending in any court whether by virtue of
any judgment or under the present complaint and undertake to withdraw and/or
move to dismiss the same under the spirit of this agreement;
5. That
defendants likewise waive all claims for damages including attorney’s fees
against the plaintiff;
6. That plaintiff acknowledges the benefit done by defendant Luis Recato Dy on the property by incurring expenses in protecting and preserving the property by way of construction of perimeter fence and maintaining a caretaker therein and plaintiff has agreed to pay Luis Recato Dy the amount of P100,000.00 upon approval of this agreement by this Honorable Court.[7]
Acting on the Compromise Agreement,
the Pasay City RTC rendered the
To implement the said Decision,
Domingo Realty filed its
On
February 2, 1988, respondent Acero filed his January 29, 1988 Motion to Nullify
the Compromise Agreement,[10] claiming
that the January 22, 1988 Order authorizing the survey plan of petitioner
Domingo Realty as the basis of a resurvey would violate the Compromise
Agreement since the whole area he occupied would be adjudged as owned by the
realty firm.
On
In
his June 9, 1989 Report, Elpidio T. De Lara, Chief of the Technical Services
Division of the Lands Management Section of the National Capital Region -
Department of Environment and Natural Resources, submitted to the trial court
Verification Survey Plan No. Vs-13-000135. In the said Verification Survey
Plan, petitioners’ TCTs covered the entire land occupied by the respondent’s
hollow block factory.[13]
On
April 10, 1990, petitioner Ayala Steel Manufacturing Co., Inc. (Ayala Steel)
filed its March 30, 1990 Motion for Substitution alleging that it had purchased
the subject lots, attaching to the motion TCT Nos. 152528, 152529, and 152530
all in its name, as proof of purchase.[14]
The
said motion was opposed by Acero claiming that “this case has already been
terminated in accordance with the compromise agreement of the parties, hence,
substitution will no longer be necessary and justified under the
circumstances.”[15] The motion was not resolved which explains
why both transferor Domingo Realty and transferee Ayala Steel are
co-petitioners in the instant petition.
In
its December 28, 1990 Order,[16]
the trial court directed Acero to conduct his own re-survey of the lots based
on the technical description appearing in the TCTs of Domingo Realty and to
have the re-survey plans approved by the Bureau of Lands. The Order resulted from Acero’s contention
that he occupied only 2,000 square meters of petitioners’ property.
Acero
employed the services of Engr. Eligio L. Cruz who came up with Verification
Survey Plan No. Vs-13-000185. However, when the said Verification Survey Plan
was presented to the Bureau of Lands for approval, it was rejected because
Engr. Cruz failed to comply with the requirements of the Bureau.[17]
On
On
On
January 13, 1992, respondent filed a Motion to Modify Order Dated 6 December ‘91,[22]
claiming that the said Order modified the Compromise Agreement considering that
it allegedly involved only 1,357 square meters and not the entire lot;[23]
and if not amended, the Order would deviate from the principle that “no man
shall enrich himself at the expense of the other.”
In
its
On
On
Given
the conflicting Verification Survey Plans of the parties, the trial court
issued the
Subsequently,
Regional Technical Director Eriberto V. Almazan of the Land Registration
Authority issued the
Thereafter,
petitioners filed their
Respondent’s
Motion for Reconsideration[32]
of the January 12, 1994 Order was denied in the
Aggrieved,
respondent Acero filed before the CA his February 23, 1994 Petition for Certiorari
and Mandamus with Urgent Prayer for Issuance of a Temporary Restraining Order,[34]
under Rule 65 of the Rules of Court, against petitioners and Judge Sofronio G.
Sayo as presiding judge of the lower court. In the petition, respondent sought to nullify
and set aside the RTC Orders dated December 6, 1991, January 15, 1992, October
6, 1992, January 12, 1994, and February 1, 1994, all of which pertain to the
execution of the December 7, 1987 Decision on the Compromise Agreement. Significantly, respondent did not seek the
annulment of said judgment but merely reiterated the issue that under the
Compromise Agreement, he would only be vacating a portion of the property he was
occupying.
The Ruling of the Court of Appeals
On
IN VIEW OF THE FOREGOING, the petition
for certiorari is GRANTED and the
Orders of respondent court dated
SO ORDERED.[35]
In
discarding the December 7, 1987 Decision based on the Compromise Agreement, the
appellate court ratiocinated that David Victorio, the alleged lessor of Acero,
was not a party to the Compromise Agreement; thus, there would always remain
the probability that he might eventually resurface and assail the Compromise Agreement,
giving rise to another suit. Moreover, the CA found the Compromise Agreement
vague, not having stipulated a mutually agreed upon surveyor, “who would survey
the properties using as a basis, survey plans acceptable to both, and to
thereafter submit a report to the court.”[36]
Likewise,
the CA sustained Acero’s belief that he would only have to vacate a portion of
the property he was presently occupying, which was tantamount to a mistake that
served as basis for the nullification of the Compromise Agreement entered into.
On
Thus, the instant petition is in our hands.
The Issues
The issues as
stated in the petition are as follows:
1.
The respondent Court of Appeals
erred in nullifying and setting aside judgment on Compromise Agreement and the
Compromise Agreement itself as well as the subsequent orders of the court a quo
though there is no motion to set aside the judgment on the Compromise Agreement
before the court a quo on the ground of fraud, mistake or duress;
2. The respondent Court of Appeals erred
in nullifying and setting aside the judgment on Compromise Agreement and the
Compromise Agreement itself as well as the subsequent Orders of the Court of
quo [sic] though in the Petition for Certiorari and Mandamus before respondent
Court of Appeals, private respondent argued that judgment on Compromise
Agreement is final, executory, immutable and unalterable;
3. The respondent Court of Appeals erred
in nullifying and setting aside Judgment on Compromise Agreement and the Compromise
Agreement itself as well as the subsequent Orders of the Court a quo based on
fraud or mistake though said issues were not raised before the Court a quo, and
no evidence was introduced to substantiate fraud or mistake before the court a
quo;
4. The respondent Court of Appeals erred
when it ruled that the non-inclusion of one of the parties in this case, and
the vagueness of the Compromise Agreement are grounds to nullify and set aside
the Compromise Agreement; and
5. The respondent Court of Appeals erred
when it entertained the Petition for Certiorari and Mandamus though it was
filed beyond reasonable time if not barred by laches.[38]
Restated, the issues are:
I.
WHETHER THE PETITION
BEFORE THE COURT OF APPEALS WAS FILED OUT OF TIME OR BARRED BY LACHES;
II.
WHETHER THE
NON-INCLUSION OF DAVID VICTORIO WOULD NULLIFY THE COMPROMISE AGREEMENT;
III.
WHETHER THE JUDGMENT
ON COMPROMISE AGREEMENT SHOULD BE SET ASIDE ON THE GROUND OF VAGUENESS; AND
IV.
WHETHER THE JUDGMENT
ON COMPROMISE AGREEMENT SHOULD BE SET ASIDE ON THE GROUND OF MISTAKE.
The Court’s Ruling
The petition is meritorious.
The
preliminary issue involves the query of what proper remedy is available to a
party who believes that his consent in a compromise agreement was vitiated by
mistake upon which a judgment was rendered by a court of law.
There is no question that a contract where
the consent is given through mistake, violence, intimidation, undue influence,
or fraud is voidable under Article 1330 of the Civil Code. If the contract assumes the form of a
Compromise Agreement between the parties in a civil case, then a judgment
rendered on the basis of such covenant is final, unappealable, and immediately
executory. If one of the parties claims
that his consent was obtained through fraud, mistake, or duress, he must file a
motion with the trial court that approved the compromise agreement to
reconsider the judgment and nullify or set aside said contract on any of the
said grounds for annulment of contract within 15 days from notice of
judgment. Under Rule 37, said party can
either file a motion for new trial or reconsideration. A party can file a motion for new trial based
on fraud, accident or mistake, excusable negligence, or newly discovered
evidence.
On
the other hand, a party may decide to seek the recall or modification of the
judgment by means of a motion for reconsideration on the ground that “the
decision or final order is contrary to law” if the consent was procured through
fraud, mistake, or duress. Thus, the
motion for a new trial or motion for reconsideration is the readily available
remedy for a party to challenge a judgment if the 15-day period from receipt of
judgment for taking an appeal has not yet expired. This motion is the most plain, speedy, and adequate
remedy in law to assail a judgment based on a compromise agreement which, even
if it is immediately executory, can still be annulled for vices of consent or
forgery.[39]
Prior
to the effectivity of the 1997 Rules of Civil Procedure on
If
the 15-day period for taking an appeal has lapsed, then the aggrieved party can
avail of Rule 38 by filing a petition for relief from judgment which should be done
within 60 days after the petitioner learns of the judgment, but not more than
six (6) months after such judgment or final order was entered. Prior to the effectivity of the 1997 Rules of
Civil Procedure in 1997, if the court denies the petition under Rule 38, the
remedy is to appeal from the order of denial and not from the judgment since
said decision has already become final and already unappealable.[41] However, in the appeal from said order, the
appellant may likewise assail the judgment.
Under the 1997 Rules of Civil Procedure, the aggrieved party can no longer
appeal from the order denying the petition since this is proscribed under
Section 1 of Rule 41. The remedy of the
party is to file a special civil action for certiorari under Rule 65 from the
order rejecting the petition for relief from judgment.
The
records of the case reveal the following:
1.
2.
3.
4.
5.
6.
7.
8. October 6, 1992 – the trial court
reiterated its January 15, 1992 Order directing the issuance of a Writ of Execution
after the records of the case were lost in a fire that gutted the Pasay City
Hall;
9.
10.
11.
In
his undated Manifestation, respondent Acero admitted having received a copy of
the
What
respondent Acero should have done was to file a petition for relief from
judgment when he became aware that he lost his right of appeal on
In
sum, the petition for certiorari instituted by respondent Acero with the CA is
a wrong remedy; a simple appeal to the CA would have sufficed. Since the certiorari action is an improper
legal action, the petition should have been rejected outright by the CA.
Assuming
arguendo that a petition for certiorari with the CA is the appropriate remedy, still,
said petition was filed out of time.
The
petition before the CA was filed prior to the effectivity of the 1997 Rules of
Court when there was still no prescribed period within which to file said
petition, unlike in the present Section 4 of Rule 65 wherein a Petition for
Certiorari and Mandamus must be filed within 60 days from notice of the
judgment, final order, or resolution appealed from, or of the denial of the
petitioners’ motion for new trial or reconsideration after notice of judgment.
Section
4, Rule 65 previously read:
Section
4. Where
petition filed.—The petition may be filed in the Supreme Court, or, if it
relates to the acts or omissions of an inferior court, or of a corporation,
board or officer or person, in a Court of First Instance having jurisdiction
thereof. It may also be filed in the
Court of Appeals if it is in aid of its appellate jurisdiction.
Petitions for certiorari under Rules 43, 44 and 45 shall be filed with the Supreme Court.
Before
the 1997 Rules of Civil Procedure became effective on July 1, 1997, the
yardstick to determine the timeliness of a petition for certiorari under Rule
65 was the reasonableness of the time that had elapsed from receipt of notice
of the assailed order/s of the trial court up to the filing of the appeal with
the CA.[44] In a number of cases, the Court ruled that
reasonable time can be pegged at three (3) months.[45]
In
the present case, the Order denying the Motion to Nullify the Compromise
Agreement was issued on
On
the second issue, petitioners assail the ruling of the appellate court that David
Victorio who is claimed to be the lessor of Acero, and who is impleaded as a
defendant in Civil Case No. 9581-P, was not made a party to the Compromise
Agreement and hence, he may later “assail the compromise agreement as not
binding upon him, thereby giving rise to another suit.”[46]
We find merit in petitioners’
position.
The
CA was unable to cite a law or jurisprudence that supports the annulment of a
compromise agreement if one of the parties in a case is not included in the
settlement. The only legal effect of the
non-inclusion of a party in a compromise agreement is that said party cannot be
bound by the terms of the agreement. The
Compromise Agreement shall however be “valid and binding as to the parties who
signed thereto.”[47]
The
issue of ownership between petitioners and David Victorio can be threshed out
by the trial court in Civil Case No. 9581-P.
The proper thing to do is to remand the case for continuation of the
proceedings between petitioners and defendant David Victorio but not to annul the
partial judgment between petitioners and respondent Acero which has been
pending execution for 20 years.
With
regard to the third issue, petitioners assail the ruling of the CA that the
Compromise Agreement is vague as there is still a need to determine the exact
metes and bounds of the encroachment on the petitioners’ lot.
The object of a contract, in order to
be considered as “certain,” need not specify such object with absolute
certainty. It is enough that the object
is determinable in order for it to be considered as “certain.” Article 1349 of the Civil Code provides:
Article 1349. The object of every contract must be determinate as to its kind. The fact that the quantity is not determinate shall not be an obstacle to the existence of the contract, provided it is possible to determine the same, without the need of a new contract between the parties.
In the instant case, the title over the subject property
contains a technical description that provides the metes and bounds of the
property of petitioners. Such technical
description is the final determinant of the extent of the property of
petitioners. Thus, the area of
petitioners’ property is determinable based on the technical descriptions
contained in the TCTs.
Notably, the determination made by
the Bureau of Lands—that Verification Survey Plan No. Vs-13-000135 is the
correct Plan—is controlling and shall prevail over Verification Survey Plan No.
Vs-13-000185 submitted by Acero. Findings
of fact by administrative agencies, having acquired expertise in their field of
specialization, must be given great weight by this Court.[48] Even if the exact area of encroachment is not
specified in the agreement, it can still be determined from the technical
description of the title of plaintiff which defendant Acero admitted to be
correct. Thus, the object of the Compromise
Agreement is considered determinate and specific.
Moreover,
“vagueness” is defined in Black’s Law Dictionary as: “indefinite, uncertain;
not susceptible of being understood.”
A
perusal of the entire Compromise Agreement will negate any contention that
there is vagueness in its provisions. It
must be remembered that in the interpretation of contracts, an instrument must
be construed so as to give effect to all the provisions of these contracts.[49] Thus, the Compromise Agreement must be
considered as a whole.
The
alleged vagueness revolves around the term “portion” in paragraph three (3) of
the Compromise Agreement,[50] taken
together with paragraph one (1) which we quote:
1. That defendants admit and recognize the
ownership of the plaintiff over the property subject of this case, covered by
TCT No. S-107639 (75600), S-107643 (67007), and S-107640 (67006) with a total
area of 26,705 square meters;
x x x x
3. That defendant Acero admits that the property he is presently occupying by way of lease is encroaching on a portion of the property of the plaintiff and assume and undertakes to vacate, remove and clear any and all structures erected inside the property of the plaintiff by himself and other third parties, duly authorized and/or who have an existing agreement with defendant Acero, and shall deliver said portion of the property of the plaintiff free and clear of any unauthorized structures, shanties, occupants, squatters or lessees within a period of sixty (60) days from date of signing of this compromise agreement. Should defendant Acero fail in his obligation to vacate, remove and clear the structures erected inside the property of the plaintiff within the period of 60 days afore-mentioned, plaintiff shall be entitled to a writ of execution for the immediate demolition or removal of said structure to fully implement this agreement; and ejectment of all squatters and occupants and lessees, including the dependents to fully implement this agreement. (Emphasis supplied.)
Respondent harps on their contention that the term “portion”
in paragraph 3 of the Compromise Agreement refers to the property which they
are occupying. Respondent’s interpretation of paragraph 3 of the Compromise
Agreement is mistaken as it is anchored on his belief that the encroachment on
the property of petitioners is only a portion and not the entire lot he is
occupying. This is apparent from his
Supplement to his Petition for Certiorari and Mandamus where he explained:
Petitioner [Acero] entered into this agreement because of his well-founded belief and conviction that a portion of the property he is occupying encroaches only a portion of the property of private respondent. In fine, only a portion of the property petitioner is occupying (not all of it) encroaches on a portion of the property of private respondent.[51]
This contention is incorrect. The agreement is clear that respondent Acero
admitted that “the property he is presently occupying by way of lease is
encroaching on a portion of the property of the plaintiff.” Thus, whether it is only a portion or the
entire lot Acero is leasing that will be affected by the agreement is of no importance.
What controls is the encroachment on the lot of petitioner Domingo Realty regardless
of whether the entire lot or only a portion occupied by Acero will be covered
by the encroachment.
While
it may be the honest belief of respondent Acero that only a portion of the lot he
is occupying encroaches on the 26,705-square meter lot of petitioner Domingo
Realty and later, Ayala Steel, the Court finds that the true and real agreement
between the parties is that any encroachment by respondent Acero on the
lot of petitioners will be surrendered to the latter. This is apparent from the undertaking in
paragraph 3 that defendant Acero “undertakes to vacate, remove and clear any
and all structures erected inside the property of the plaintiff.” This prestation results from the admission
against the interest of respondent Acero that he “admits and recognizes the
ownership of the plaintiff (Domingo Realty)” over the subject lot. The controlling word therefore is “encroachment”—whether it involves a
portion of or the entire lot claimed by defendant David Victorio. To reiterate, the word “portion” refers to petitioners’
lot and not that of Acero’s. Contrary to
the disposition of the CA, we rule that the terms of the Compromise Agreement
are clear and leave no doubt upon the intent of the parties that respondent
Acero will vacate, remove, and clear any and all structures erected inside petitioners’
property, the ownership of which is not denied by him. The literal meaning of the stipulations in
the Compromise Agreement will control under Article 1370 of the Civil Code. Thus, the alleged vagueness in the object of
the agreement cannot be made an excuse for its nullification.
Finally,
with regard to the fourth issue, petitioners question the finding of the CA that
the compromise judgment can be set aside on the ground of mistake under Article
2038 of the Civil Code, because respondent Acero gave his consent to the Compromise
Agreement in good faith that he would only vacate a portion of his lot in favor
of petitioner Domingo Realty.
We
rule otherwise.
Articles
2038 and 1330 of the Civil Code allow a party to a contract, on the ground of
mistake, to nullify a compromise agreement, viz:
Article 2038. A compromise in which there is mistake, fraud, violence, intimidation, undue influence, or falsity of documents, is subject to the provisions of Article 1330 of this Code.
Article 1330. A contract where the consent is given through mistake, violence, intimidation, undue influence, or fraud is voidable (emphasis supplied).
“Mistake”
has been defined as a “misunderstanding of the meaning or implication of
something” or “a wrong action or statement proceeding from a faulty judgment x
x x.”[52]
Article
1333 of the Civil Code of the
Under
this provision of law, it is presumed that the parties to a contract know and
understand the import of their agreement. Thus, civil law expert Arturo M.
Tolentino opined that:
To invalidate consent, the error must be excusable. It must be real error, and not one that could have been avoided by the party alleging it. The error must arise from facts unknown to him. He cannot allege an error which refers to a fact known to him, or which he should have known by ordinary diligent examination of the facts. An error so patent and obvious that nobody could have made it, or one which could have been avoided by ordinary prudence, cannot be invoked by the one who made it in order to annul his contract. A mistake that is caused by manifest negligence cannot invalidate a juridical act.[53] (Emphasis supplied.)
Prior
to the execution of the Compromise Agreement, respondent Acero was already
aware of the technical description of the titled lots of petitioner Domingo
Realty and more so, of the boundaries and area of the lot he leased from David
Victorio. Before consenting to the
agreement, he could have simply hired a geodetic engineer to conduct a
verification survey and determine the actual encroachment of the area he was
leasing on the titled lot of petitioner Domingo Realty. Had he undertaken such a precautionary
measure, he would have known that the entire area he was occupying intruded
into the titled lot of petitioners and possibly, he would not have signed the
agreement.
In
this factual milieu, respondent Acero could have easily averted the alleged
mistake in the contract; but through palpable neglect, he failed to undertake
the measures expected of a person of ordinary prudence. Without doubt, this kind of mistake cannot be
resorted to by respondent Acero as a ground to nullify an otherwise clear,
legal, and valid agreement, even though the document may become adverse and
even ruinous to his business.
Moreover,
respondent failed to state in the Compromise Agreement that he intended to
vacate only a portion of the property he was leasing. Such provision being beneficial to
respondent, he, in the exercise of the proper diligence required, should have
made sure that such matter was specified in the Compromise Agreement. Respondent Acero’s failure to have the said
stipulation incorporated in the Compromise Agreement is negligence on his part and
insufficient to abrogate said agreement.
In
Torres v. Court of Appeals,[54]
which was also cited in LL and Company
Development and Agro-Industrial Corporation v. Huang Chao Chun,[55]
it was held that:
Under Article 1315 of the Civil Code,
contracts bind the parties not only to what has been expressly stipulated, but
also to all necessary consequences thereof, as follows:
ART. 1315. Contracts are perfected by
mere consent, and from that moment the parties are bound not only to the
fulfillment of what has been expressly stipulated but also to all the
consequences which, according to their nature, may be in keeping with good
faith, usage and law.
It is undisputed that petitioners are
educated and are thus presumed to have understood the terms of the contract
they voluntarily signed. If it was not
in consonance with their expectations, they should have objected to it and
insisted on the provisions they wanted.
Courts are not authorized to extricate parties from the necessary consequences of their acts, and the fact that the contractual stipulations may turn out to be financially disadvantageous will not relieve parties thereto of their obligations. They cannot now disavow the relationship formed from such agreement due to their supposed misunderstanding of its terms.
The
mere fact that the Compromise Agreement favors one party does not render it
invalid. We ruled in Amarante v. Court of Appeals that:
Compromises are generally to be favored and cannot be set aside if the parties acted in good faith and made reciprocal concessions to each other in order to terminate a case. This holds true even if all the gains appear to be on one side and all the sacrifices on the other (emphasis supplied).[56]
One
final note. While the Court can
commiserate with respondent Acero in his sad plight, nonetheless we have no
power to make or alter contracts in order to save him from the adverse
stipulations in the Compromise Agreement.
Hopefully this case will serve as a precaution to prospective parties to
a contract involving titled lands for them to exercise the diligence of a
reasonably prudent person by undertaking measures to ensure the legality of the
title and the accurate metes and bounds of the lot embraced in the title. It is advisable that such parties (1) verify
the origin, history, authenticity, and validity of the title with the Office of
the Register of Deeds and the Land Registration Authority; (2) engage the
services of a competent and reliable geodetic engineer to verify the boundary,
metes, and bounds of the lot subject of said title based on the technical
description in the said title and the approved survey plan in the Land
Management Bureau; (3) conduct an actual ocular inspection of the lot; (4)
inquire from the owners and possessors of adjoining lots with respect to the
true and legal ownership of the lot in question; (5) put up signs that said lot
is being purchased, leased, or encumbered; and (6) undertake such other
measures to make the general public aware that said lot will be subject to
alienation, lease, or encumbrance by the parties. Respondent Acero, for all his woes, may have
a legal recourse against lessor David Victorio who inveigled him to lease the
lot which turned out to be owned by another.
WHEREFORE, the
petition is hereby GRANTED and the
assailed Decision and Resolution of the CA are REVERSED. The questioned Orders of the Pasay City RTC
dated December 6, 1991, January 15, 1992, October 6, 1992, January 12, 1994,
and February 1, 1994, including the Decision dated December 7, 1987, are AFFIRMED. The case is remanded to the Pasay RTC, Branch
III for further proceedings with respect to petitioner Domingo Realty’s
November 15, 1981 Complaint[57] against
one of the defendants, David Victorio. No
costs.
SO ORDERED.
PRESBITERO
J. VELASCO, JR.
Associate
Justice
WE
CONCUR:
LEONARDO A. QUISUMBING
Associate Justice
Chairperson
ANTONIO T.
CARPIO CONCHITA
CARPIO MORALES
Associate
Justice
Associate Justice
DANTE
O. TINGA
Associate Justice
A T T
E S T A T I O N
I attest that the conclusions in the
above Decision had been reached in consultation before the case was assigned to
the writer of the opinion of the Court’s Division.
LEONARDO A. QUISUMBING
Associate Justice
Chairperson
C E R T I F I C A T I O N
Pursuant to Section 13, Article VIII of the
Constitution, and the Division Chairperson’s Attestation, I certify that the
conclusions in the above Decision had been reached in consultation before the
case was assigned to the writer of the opinion of the Court’s Division.
REYNATO S. PUNO
Chief Justice
[1] Penned by Associate Justice Ricardo P. Galvez, with Associate Justices Emeterio C. Cui (Chairperson) and Antonio P. Solano concurring; rollo, pp. 33-40.
[2]
[5] CA rollo, pp. 61-64.
[6] The subject property of this case consists of
three (3) parcels of land, and respondent Acero does not occupy all of these
lands. Other parties occupying the other
parts of the subject property were included in the case and denominated as John
and Peter Does. John Doe appears to
have turned out to be Recato Dy who, according to the Compromise Agreement,
was also claiming part of the subject property by virtue of Transfer
Certificate of Title No. 108027. Dy
later on admitted in the Compromise Agreement that such TCT was not genuine and
that the property indicated in the TCT belonged to petitioners.
[8]
[9]
[17]
[18]
[19]
[20]
[21]
[22]
[23]
[24]
[26]
[27]
[28]
[29]
[30]
[31]
[32]
[33]
[34] CA rollo,
p. 3-41.
[35] Supra note 1, at 40.
[37] CA rollo, pp. 250-261.
[38] Rollo, pp. 15-16.
[39] Magbanua v. Uy, G.R. No. 161003, May 6, 2005, 458 SCRA 184, 191.
[43] Fajardo v. Bautista, G.R. Nos. 102193-97, May 10, 1994, 232 SCRA 291; Calalang v. Register of Deeds of Quezon City, G.R. Nos. 76265 & 83280, March 11, 1994, 231 SCRA 88; and Hipolito v. CA, G.R. Nos. 108478-79, February 21, 1994, 230 SCRA 191.
[44] Fernandez v. National Labor Relations Commission, G.R. No. 106090, February 28, 1994, 230 SCRA 460, 465.
[45] People v. Magallanes, G.R. Nos. 118013-14, October 11, 1995, 249 SCRA 212, 229 and Paderanga v. Court of Appeals, G.R. No. 115407, August 28, 1995, 247 SCRA 741, 759.
[46] Rollo, p. 38.
[47] SMI Fish Industries, Inc. v. NLRC, G.R. Nos. 96952-56, September 2, 1992, 213 SCRA 444, 448.
[48] See Pan Pacific Industrial Sales Co., Inc. v. NLRC, G.R. No. 96191, March 4, 1994, 194 SCRA 633; Five J Taxi v. NLRC, G.R. No. 100138, August 5, 1992, 212 SCRA 225; and San Miguel Corporation v. Javate, Jr., G.R. No. 54244, January 27, 1992, 205 SCRA 469.
[49] Rules of Court, Rule 130, Sec. 11.
[57] Supra note 3.