G.R. No. L-33050; July 23, 1987
PABLO V. ZAGALA and PABLO V. ZAGALA & CO., petitioners, vs. THE HONORABLE JOSE B. JIMENEZ, in his capacity as Presiding Judge of Branch VI, Court of First Instance of Manila, and FRANCISCO G. GUBALLA, respondents.

FACTS

Petitioners filed a collection suit against private respondent Francisco Guballa. The complaint included a cause of action for the collection of a debt in U.S. dollars, specifically praying for judgment ordering Guballa to pay “the amount of U.S. $9,404.14 equivalent to P36,864.23 at the current exchange rate of P3.92 to the dollar, or the equivalent amount thereof based on the exchange rate officially prevailing at the time of payment.” The parties subsequently entered into a Compromise Agreement, which was approved by the trial court in a judgment dated May 17, 1968. The compromise judgment ordered Guballa to pay petitioners “the amount of NINE THOUSAND FOUR HUNDRED FOUR & 14/100 DOLLARS (US $9,404.14).”
Petitioners later filed a “Motion For Fixing The Peso Value Of Judgment In Dollars And For Issuance Of Writ Of Execution.” The respondent judge denied the motion, ruling that the judgment, being based on a compromise, was for a specific sum in U.S. dollars only and did not include the alternative prayer for its peso equivalent. The motion for reconsideration was likewise denied.

ISSUE

Whether the respondent judge committed grave abuse of discretion in denying the motion to fix the peso equivalent of the dollar award in the compromise judgment and to issue a writ of execution.

RULING

Yes. The Supreme Court granted the petition for certiorari and mandamus. The Court ruled that a compromise agreement and the judgment rendered upon it must be interpreted with reference to the entire context of the original complaint, which is deemed incorporated into the compromise. The complaint, read in its totality including its prayer, explicitly sought recovery of the dollar amount “or the equivalent amount thereof based on the exchange rate officially prevailing at the time of payment.” Consequently, the compromise judgment for “$9,404.14” must be construed as embodying this alternative mode of payment.
The legal logic is anchored on the jurisprudence established in Phoenix Assurance Company vs. Macondray & Co., Inc., which holds that a judgment awarding an amount in U.S. dollars may be satisfied by paying its equivalent in local currency at the conversion rate prevailing at the time of payment. If the parties cannot agree on the rate, the trial court is duty-bound to determine it. The respondent judge therefore erred in refusing to fix the conversion rate. Furthermore, a compromise judgment is immediately executory and final. Thus, a writ of mandamus lies to compel the issuance of a writ of execution to enforce it. The Court annulled the challenged orders and directed the respondent judge to fix the current peso equivalent of the dollar award and to issue the writ of execution.