This is a case where the parties entered into a compromise agreement after the lower courts have already rendered a decision. The question here is whether the compromise agreement entered into by the parties is valid even if it is different from or even contrary to the decision of the court.
The case involved a fish pond (Lot 1483) subject matter of a complaint for ejectment and damages filed with the Municipal Trial Court (MTCC) by Enteng who allegedly owned it, against Fredo who allegedly entered into it without Enteng’s authority and dumped soil thereon without an Environmental Clearance Certificate. Enteng alleged that because of Fredo’s action the crabs and the bangus he was raising in the fishpond were killed thus forcing him to file the complaint, since Fredo still continued with his actions. In his complaint Enteng asked that Fredo be restrained from touching and destroying the fishpond; that he be ejected therefrom permanently; and that he be ordered to pay actual and moral damages and attorney’s fees.
The MTCC dismissed Enteng’s complaint upon motion of Fredo because it was filed without first bringing the matter to barangay conciliation pursuant to the Local Government Code. But on appeal to the Regional Trial Court (RTC), the dismissal was reversed and set aside. Instead the RTC rendered judgment in favor of Enteng and directed Fredo, his heirs and subalterns to immediately vacate Lot 1483 and restore Enteng to his peaceful possession thereof. The RTC also ordered Fredo to pay Enteng, actual and moral damages and attorney’s fees.
When Fredo filed a petition for review with the Court of Appeals (CA), the latter upheld the RTC’s reversal of the MTCC’s order and affirmed the RTC decision except the award of actual and moral damages and attorney’s fees.
Still not satisfied Fredo went to the Supreme Court (SC) on a petition for certiorari and prayed for the annulment of the CA decision and for reinstatement of the MTCC’s order of dismissal. Pending resolution of the case, Enteng and Fredo now represented by their heirs entered into a compromise agreement wherein the heirs of Enteng acknowledged that Fredo and his heirs were indeed owners of the lot and that for and in consideration of the sum of P200,000, they are abandoning the decision rendered in their favor by the RTC and the CA, and are waiving all their rights and interest to the subject property particularly their right of possession of the same thus assuring Fredo’s heirs of continuous and peaceful possession. Was this Compromise Agreement valid?
Yes. Under Article 2028 of the Civil Code, a compromise agreement is a contract whereby the parties, by making reciprocal concessions, avoid litigation or put an end to one already commenced. Compromise is a form of amicable settlement that is not only allowed by also encouraged in civil cases.
Contracting parties may establish such stipulation, clauses, terms and conditions as they deem convenient, provided that these are not contrary to law, morals, good customs, public order or public safety.
In this case the Compromise Agreement has been validly and voluntarily executed and is not contrary to law, morals, good customs, public order or public policy. So it should be approved (Heirs of Zabala vs. Court of Appeals and Heirs of Manuel, G.R. 189602, May 6, 2010).
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