G.R. No. L-75934, December 15, 1989
WILLY CARSON and SPS. RANTE FABOL and TERESITA CARSON, petitioners, vs. HON. GREGORIO D. PANTANOSAS, JR., JUDGE OF THE MUNICIPAL TRIAL COURT IN CITIES, BRANCH II, CAGAYAN DE ORO CITY and ELPIDIO M. QUIRANTE, respondents.

FACTS

Private respondent Elpidio Quirante filed an unlawful detainer case against petitioners for unpaid rentals of barbecue stalls. The parties entered into a Compromise Agreement, approved by the Municipal Trial Court (MTC) on February 10, 1984. The agreement stipulated that petitioners would pay a P2,000 initial amount and a P23,135 balance in daily installments of at least P50, plus daily rentals of P105 starting February 1984. Failure to pay any daily installment, after a five-day grace period, would entitle Quirante to eject the petitioners and execute the judgment.
Subsequently, China Banking Corporation obtained a money judgment against Quirante in a separate case. The Regional Trial Court (RTC) in that case issued an order on November 23, 1984, directing all stallholders, including petitioners, to pay their rentals directly to China Bank. Alleging petitioners’ violation of the compromise agreement for non-payment, Quirante moved for and secured an alias writ of execution from the MTC on September 20, 1985. Petitioners opposed, arguing that the RTC order legally compelled them to pay China Bank, which payment should be deemed compliance with their obligation to Quirante.

ISSUE

Whether the respondent judge committed grave abuse of discretion in issuing the alias writ of execution to enforce the judgment based on the compromise agreement.

RULING

The Supreme Court ruled that the respondent judge did not commit grave abuse of discretion. Grave abuse of discretion implies a capricious, arbitrary, or whimsical exercise of judgment equivalent to lack of jurisdiction. The record shows the MTC judge issued the alias writ only after careful determination of a breach, with petitioners given due notice and hearing. The legal defense raised by petitioners—that the RTC order to pay China Bank excused their performance—was untenable. The Court found no evidence that petitioners actually made any rental payments to China Bank following that order, as confirmed by the bank manager’s testimony. The mere existence of the RTC order did not constitute payment or validly extinguish their obligation under the compromise agreement. A judgment based on a compromise is a binding contract between the parties and becomes final and executory upon court approval. Where a breach of its terms is established, as in this case where no payments were made after December 1984, execution is valid and justified. The petition was dismissed for lack of merit.