G.R. No. 97556 & 101152 July 29, 1996
DAMASO S. FLORES, petitioner, vs. COURT OF APPEALS and ROLANDO R. LIGON, respondents.

FACTS

Petitioner Damaso S. Flores and private respondent Rolando R. Ligon entered into a Compromise Agreement to settle a collection suit for unpaid loans. The agreement, approved as a judgment by the RTC, obligated Flores to pay his debts in installments. As security, he agreed that upon default, Ligon could take possession and operate the Parañaque Cockpit Stadium. After Flores allegedly defaulted, the RTC issued a writ of execution. Flores appealed, but the RTC granted Ligon’s motion for execution pending appeal, allowing Ligon to take possession of the stadium. Meanwhile, unbeknownst to the court and Flores, Ligon had already purchased the stadium from its heirs. This purchase occurred after the compromise agreement was approved but before execution. A protracted legal battle ensued over possession, reaching the Supreme Court, which ultimately upheld the finality of the compromise judgment and ordered its execution.

ISSUE

Can a final and executory judgment, specifically a compromise agreement, be rendered unenforceable by a supervening event—namely, the creditor’s purchase of the property pledged as security—that occurs after the judgment’s finality but before its execution?

RULING

No. The Supreme Court ruled that the final and executory compromise judgment remained enforceable. The principle of immutability of final judgments is paramount; a court loses jurisdiction to alter a final judgment except for clerical errors or void judgments. The supervening event—Ligon’s purchase of the stadium—did not nullify the judgment. The compromise agreement created a contractual obligation for Flores to deliver possession upon default, which was distinct from any property right. Ligon’s act of buying the property was a separate transaction that did not extinguish Flores’s contractual duty under the judgment. To hold otherwise would allow a party to unilaterally frustrate a final judgment through his own voluntary acts post-litigation. The Court emphasized that equity cannot override the fundamental need for judicial certainty and the unalterability of final decisions. The trial court correctly issued the writ of execution to enforce the judgment as rendered, irrespective of the changed circumstances allegedly making enforcement inequitable. The supervening event did not make execution impossible but merely affected the manner of its satisfaction, which did not justify setting aside the final judgment.