G.R. No. 74461 May 12, 1989
JUAN ASONG, petitioner, vs. THE HONORABLE INTERMEDIATE APPELLATE COURT, ALBARO ALBANO, JR. and SEVERINO BANASIG, respondents.

FACTS

Private respondent Severino Banasig filed a forcible entry case against petitioner Juan Asong before the Municipal Court of Barotac Viejo, Iloilo. The parties subsequently entered into an amicable settlement, which was approved by the court in a judgment dated December 5, 1973. In the settlement, Asong recognized Banasig’s ownership and possession of two specific lots, Lot Nos. 2925 and 2654.
Over a year later, Asong filed a complaint in the Court of First Instance seeking to annul the amicable settlement and judgment. He alleged he was illiterate, did not understand the contents of the settlement, and only intended to concede rights to a different lot, Lot 2653. He claimed he discovered the error when cited for contempt for refusing to vacate the lots. The trial court dismissed his complaint, finding the settlement was entered into voluntarily and with full understanding. The Intermediate Appellate Court affirmed this decision.

ISSUE

Whether the amicable settlement should be annulled on the ground of mistake, as petitioner claims he did not voluntarily and intelligently enter into it due to his illiteracy.

RULING

The Supreme Court denied the petition and affirmed the appellate court’s decision. The legal logic rests on the factual findings of the lower courts and the nature of a compromise agreement. The Court emphasized the fundamental rule that factual conclusions of the trial court, which had the opportunity to observe witness demeanor and examine evidence directly, are accorded great weight and finality on appeal absent strong, cogent reasons to overturn them. No such reasons existed here.
The record contained positive testimonies from Asong’s own lawyer, another attorney present during discussions, and the municipal judge, all of whom explained the settlement’s terms to Asong in the Hiligaynon dialect. Their testimonies, found credible and without motive to testify falsely, established that Asong was fully apprised of the legal consequences. His bare denial, unsupported by evidence, could not overcome this. Furthermore, the Court found his claim of discovering the mistake only after over a year dubious, as evidence showed Banasig took immediate possession and cultivated the land, activities Asong would have likely known about sooner.
On the legal character of the agreement, the Court upheld that it was a valid compromise. A compromise is favored in law and is binding if entered in good faith, even if the terms later appear unfavorable to one party. The settlement involved reciprocal concessions—Asong conceded possession and recognized ownership to avoid litigation, while Banasig dismissed his claim for damages. That Asong may have gained less from the agreement does not invalidate it. The Court also noted that even if construed as a confession of judgment, it partook of the nature of a compromise and was equally binding.