Compromise Agreement; Has the Force of Res Judicata Between the Parties |
Compromise Agreement; Has the Force of Res Judicata Between the Parties |
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Petitioner filed a Petition for Certiorari before the CA, docketed as CA-G,R. SP No. 122409, claiming that the trial court committed grave abuse of discretion in issuing a writ of execution, since there is nothing in the trial court's August 16,2010 judgment that authorizes the issuance of such a writ in case the parties fail to perform the obligations stated under the Compromise Agreement.
A compromise is a contract whereby the parties, by making reciprocal concessions, avoid a litigation or put an end to one already commenced. Like any other contract, a compromise agreement must comply with the requisites in Article 1318 of the Civil Code, to wit: (a) consent of the contracting parties; (b) object certain that is the subject matter of the contract; and (c) cause of the obligation that is established. Like any other contract, the terms and conditions of a compromise agreement must not be contrary to law, morals, good customs, public policy and public order.
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Corollary thereto, once submitted to the court and stamped with judicial approval, a compromise agreement 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.
Verily, it is a settled rule that a compromise agreement, once approved by final order of the court, has the force of res judicata between the parties and should not be disturbed except for vices of consent or forgery. Hence, a decision on a compromise agreement is final and executory and it has the force of law and is conclusive between the parties. It transcends its identity as a mere contract binding only upon the parties thereto as it becomes a judgment that is subject to execution in accordance with the Rules of Court. In this regard, Article 2041 of the Civil Code explicitly provides that, if one of the parties fails or refuses to abide by the compromise agreement, the other party may [either] (a) enforce the compromise [or] (b) regard it as rescinded and insist upon his or her original demand[.] (Emphasis supplied).
Under Article 2041 of the Civil Code, "(i)f one of the parties fails or refuses to abide by the compromise, the other party may either enforce the compromise or regard it as rescinded and insist upon his original demand." "The language of this Article 2041 x x x denotes that no action for rescission is required x x x, and that the party aggrieved by the breach of a compromise agreement may, if he chooses, bring the suit contemplated or involved in his original demand, as if there had never been any compromise agreement, without bringing an action for rescission thereof. He need not seek a judicial declaration of rescission, for he may ‘regard’ the compromise agreement already ‘rescinded’.”19 This principle was reiterated in a subsequent case, thus:
In the case of Leonor v. Sycip, the Supreme Court (SC) had the occasion to explain this provision of law. It ruled that Article 2041 does not require an action for rescission, and the aggrieved party, by the breach of compromise agreement, may just consider it already rescinded, to wit:
“It is worthy of notice, in this connection, that, unlike Article 2039 of the same Code, which speaks of "a cause of annulment or rescission of the compromise" and provides that "the compromise may be annulled or rescinded" for the cause therein specified, thus suggesting an action for annulment or rescission, said Article 2041 confers upon the party concerned, not a "cause" for rescission, or the right to "demand" the rescission of a compromise, but the authority, not only to "regard it as rescinded", but, also, to "insist upon his original demand". The language of this Article 2041, particularly when contrasted with that of Article 2039, denotes that no action for rescission is required in said Article 2041, and that the party aggrieved by the breach of a compromise agreement may, if he chooses, bring the suit contemplated or involved in his original demand, as if there had never been any compromise agreement, without bringing an action for rescission thereof. He need not seek a judicial declaration of rescission, for he may "regard" the compromise agreement already "rescinded". [20]
Footnotes
19 Leonor v. Sycip, 111 Phil. 859, 865 (1961).
20 Miguel v. Montanez, 680 Phil. 356, 364-365 (2012).
Read the full decision at
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