G.R. No. 48074 , December 3, 1941
ENRIQUE MEDINA, petitioner, vs. SOTERO B. CABAHUG, ETC., ET AL., respondents.

FACTS

On May 22, 1935, respondent Monico Cabanela filed civil case No. 1019 in the Court of First Instance of Negros Oriental against petitioner Enrique Medina to recover P5,000. On October 25, 1937, judgment was rendered in favor of Cabanela for P3,500 with interest and costs. The Court of Appeals affirmed this judgment on June 29, 1940. On July 6, 1940, Cabanela filed a motion in the Court of Appeals to dismiss the case, alleging the real debtor was Timoteo Moreno, not Medina. On July 8, 1940, Medina filed a motion for new trial and reconsideration, alleging Cabanela had admitted Medina owed him nothing. Medina also filed a supplemental motion for new trial on July 26, 1940, alleging Cabanela had agreed to accept and had received P1,500 in full settlement of his claim against Moreno. On July 31, 1940, Cabanela filed a petition withdrawing his motion to dismiss, stating he signed it believing the case was still pending and, under that belief, agreed to accept P3,000 from Medina in full settlement, having received P1,500 on July 8, 1940, with the balance due in October. The Court of Appeals denied Medina’s motion for reconsideration and new trial and granted Cabanela’s withdrawal motion on August 17, 1940. Medina’s petition for review to the Supreme Court was denied on September 24, 1940. On December 24, 1940, the respondent Judge issued a writ of execution for P3,500 with interest, costs, and sheriff’s fees. The sheriff notified Medina to pay P4,764.55. In this prohibition proceeding, Medina claims that under a receipt (Exhibit C) dated July 8, 1940, Cabanela accepted P1,500 in full payment. Respondents admit Cabanela received P1,500 and signed the receipt but allege he did so based on Medina’s representation that the Court of Appeals had not yet decided the case, and that Medina induced Cabanela to accept less than half the judgment without his counsel’s knowledge. Medina alleges Cabanela knew of the judgment when he signed Exhibit C.

ISSUE

Whether the respondent Judge acted without or in excess of jurisdiction or with grave abuse of discretion in issuing the writ of execution, in light of the alleged compromise settlement (Exhibit C) for P1,500.

RULING

The Supreme Court denied the petition for a writ of prohibition. The Court sustained the respondents’ contention that the settlement was void. The Court found that Monico Cabanela was not aware of the confirmatory judgment of the Court of Appeals when he signed Exhibit C. This conclusion was based on: (1) information about a filed motion for reconsideration did not necessarily mean Cabanela knew the judgment for P3,500 was affirmed; (2) the Court of Appeals’ denial of Medina’s motion (which alleged the settlement) and its granting of Cabanela’s withdrawal motion (which alleged ignorance of the affirmance) supported Cabanela’s claim; (3) exhibits indicated Cabanela did not know of the affirmance on July 6, 1940; (4) the settlement was effected directly with Cabanela without his counsel’s knowledge or intervention. Therefore, the settlement was vitiated by error or deceit and is void under Article 1817 in connection with Article 1265 of the Civil Code. Article 1819 (ignorance of a non-final judgment not being a cause for attacking a compromise) did not apply because Medina knew of the judgment and caused Cabanela to accept the settlement by representing the case was not yet decided in Cabanela’s favor. The respondent Judge did not act without or in excess of jurisdiction or with grave abuse of discretion in issuing the writ. The writ of preliminary injunction was dissolved. However, in enforcing the writ, the petitioner is to be given credit for the P1,500 already paid to Cabanela.