G.R. No. 150718 ; March 26, 2003
BASILIO BORJA, SR., petitioner, vs. SULYAP, INC. and THE COURT OF APPEALS, respondents.

FACTS

Petitioner Basilio Borja, Sr. and respondent Sulyap, Inc. entered into a lease contract. Upon its expiration, Sulyap demanded the return of advance rentals and deposits, which Borja refused. Sulyap filed a complaint for sum of money. The parties subsequently submitted a Compromise Agreement to the trial court, which approved it and rendered a judgment based on its terms. The agreement stipulated that Borja would reimburse specific amounts to Sulyap by certain dates and included a penalty clause stating that any amount not paid within the period would earn 2% interest per month until fully paid, plus 25% attorney’s fees.
Borja failed to pay the agreed amounts. Sulyap moved for a writ of execution, which the trial court granted. Borja then filed motions to quash the writ and to modify the decision. He alleged fraud in the execution of the compromise, claiming he signed a version without the penalty clause and that his former counsel, Atty. Leonardo Cruz, fraudulently attached his signature to a different version containing the clause. He also argued that Atty. Cruz, being a government employee, was prohibited from private law practice, rendering his assistance void.

ISSUE

Whether the trial court and the Court of Appeals correctly denied the motion to quash the writ of execution and to modify the compromise judgment.

RULING

Yes. The petition was denied. A judicial compromise, once approved by the court, has the force of res judicata and is immediately executory. To set aside a compromise judgment on the ground of fraud, the fraud must be extrinsic or collateral to the litigation, such as a deliberate scheme to prevent a party from presenting its case. Borja’s allegation of fraud pertains to the intrinsic nature of the agreement—specifically, the inclusion of a penalty clause he now disputes. His active participation in the proceedings, including signing the agreement in court as attested by his own counsel, belies his claim of being defrauded regarding the agreement’s contents.
Furthermore, the claim that Atty. Cruz engaged in prohibited private practice is untenable. The “private practice” of law prohibited for public officials contemplates a succession of acts, not an isolated instance of assistance such as aiding in the execution of a single compromise agreement. No such habitual practice was established. Therefore, the compromise agreement and the judgment based upon it remain valid and enforceable, including its penalty provisions for default.