G.R. No. 178591, July 30, 2018
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.

FACTS

The case originated from a dispute over three parcels of land in Muntinlupa. Respondents were farmer-tenants of the original owner, Victoria Homes, Inc. In 1983, Victoria Homes sold the lands to Springsun Management Systems Corporation, petitioner’s predecessor, without notifying the tenants. The farmers eventually filed an action for legal redemption, which culminated in a final and executory Supreme Court Decision in G.R. No. 161029 on January 19, 2005, affirming their right to redeem the property from petitioner for ₱9,790,612.00. Prior to this finality, on December 18, 2003, the farmers executed an Irrevocable Power of Attorney (IPA) in favor of Mariano Nocom, authorizing him to pay the redemption price. When petitioner refused acceptance, Nocom consigned the full redemption amount with the trial court on August 4, 2005. Subsequently, on August 21, 2005, petitioner and the farmers (except Oscar Camerino) entered into a compromise agreement (“Kasunduan”) for a settlement of ₱300,000.00. Petitioner later sought to annul the execution of the redemption, arguing this agreement was a supervening event that novated the obligation.

ISSUE

Whether the compromise agreement constituted a valid supervening event that novated the final and executory judgment allowing redemption, thereby nullifying the redemption already effected by Nocom.

RULING

The Supreme Court denied the petition and reinstated the Court of Appeals’ decision, holding the compromise agreement void and ineffective to novate the final judgment. The legal logic is anchored on the finality of judgments and the validity of the prior redemption. A final and executory judgment becomes immutable and unalterable. The right to redeem, having been conclusively settled, was validly exercised by Nocom through the consignation of the full redemption price on August 4, 2005. This act perfected the redemption and vested ownership rights in the farmers, through their attorney-in-fact, prior to the execution of the compromise agreement on August 21, 2005. Consequently, there was no longer any subsisting right or obligation to compromise at that later date. The Court emphasized that the IPA, which was the subject of a separate revocation case dismissed by the farmers themselves, remained valid and binding, empowering Nocom to act. Since the redemption was already complete, the subsequent compromise agreement involved nothing more than a vain act and could not supersede or novate the executed redemption. The Court found it unnecessary to rule on the alleged unconscionability of the ₱300,000.00 settlement, as the agreement was void ab initio for dealing with an already extinguished obligation.