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Compromise agreement

First Posted 13:49:00 08/03/2007

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CEBU, Philippines?Clark Development Corp. vs. Mondragon etc, G.R. No. 150186, March 2, 2007

The vexation to the courts in this case is evident. There is a high risk of conflict between the decisions of the RTC Branches 58 and 60 regarding their respective civil cases. A decision by one branch of court will constitute res judicata in the other case pending before the other branch of court. Alternatively, if the RTC Branch 60 exercised its jurisdiction over the petition for declaratory relief, then it would have to restrain the execution proceedings in the RTC Branch 58. Thus, interference with the proceedings in another court would ensue. Under the doctrine of non-interference, ?a trial court has no authority to interfere with the proceedings of a court of equal jurisdiction, much less to annul the final judgment of a co-equal court.? In Paper Industries Corporation of the Philippines v.

Intermediate Appellate Court, we declared that a court has no jurisdiction to restrain the execution proceedings in another court with concurrent jurisdiction.

The consolidation of the two civil cases is also not possible in line with the doctrine on non-interference. As observed by the CA:

In the matter of the consolidation of the two cases, Mondragon should be reminded that the same is addressed to the sound discretion of the courts. Neither of the judges in the two cases can impose upon the other the consolidation of the cases. Additionally, consolidation is no longer practicable because Civil Case No. 9242 is already terminated and is in the execution stage, while in Civil Case No. 9596, the issues have not even been joined.

Furthermore, if Civil Case No. 9596 was allowed to continue, the basic purpose of compromise agreements would be defeated. As defined by the Civil Code:

Art. 2028. A compromise is a contract whereby the parties, by making reciprocal concessions, avoid a litigation or put an end to one already commenced.

Art. 2037. A compromise has upon the parties the effect and authority of res judicata, but there shall be no execution except in compliance with a judicial compromise.

Thus, in Genova v. De Castro, we held that:

A compromise is an agreement between two or more persons who, for preventing or putting an end to a lawsuit, adjust their respective positions by mutual consent in the way they feel they can live with. Reciprocal concessions are the very heart and life of every compromise agreement, where each party approximates and 93 concedes in the hope of gaining balance by the danger of losing. It is, in essence, a contract.

A compromise is binding and has the force of law between the parties, unless the consent of a party is vitiated?such as by mistake, fraud, violence, intimidation or undue influence?or when there is forgery, or if the terms of the settlement are so palpably unconscionable.

Certainly, a compromise agreement becomes the law between the parties and will not be set aside other than the grounds mentioned above. In Ramnani v. Court of Appeals, we held that the main purpose of a compromise agreement is to put an end to litigation because of the uncertainty that may arise from it. Once the compromise is perfected, the parties are bound to abide by it in good faith. Should a party fail or refuse to comply with the terms of a compromise or amicable settlement, the other party could either enforce the compromise by a writ of execution or regard it as rescinded and so insist upon his/her original demand.

Instead of ending litigation, Mondragon had effectively prolonged the legal battle by filing the second civil case. Considering the investments involved, it is also likely that the parties would unceasingly appeal any judgment/s from the trial and even appellate courts, as the case now exemplifies. The vexation to the courts is already apparent, and the delay from litigating two civil cases is inevitable. Indeed, ?[p]rolonging a litigation is anathema to [the purpose of] a compromise agreement.?

Forum shopping is contumacious, as well as an act of malpractice that is proscribed and condemned as trifling with the courts and abusive of their processes. It warrants prosecution for contempt of court and summary dismissal of the actions involved, without prejudice to appropriate administrative sanction against the counsel. In this case, only Civil Case No. 9596 is left to be dismissed considering that a judgment by compromise was already rendered in Civil Case No. 9242 through the Court?s July 15, 1999 Resolution. This judgment was already executory; and the RTC Branch 58 had indeed issued a writ of execution against Mondragon.


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