G.R. No. L-25511 September 28, 1968
PATRICIO S. CUNANAN, petitioner, vs. HON. COURT OF APPEALS and BASARAN (Moro), respondents.

FACTS

On February 14, 1948, Patricio S. Cunanan filed a complaint for forcible entry against Basaran Nicolas in the Justice of the Peace Court of Mati, Davao. The parties, assisted by counsel, amicably settled the controversy by entering into a Compromise Agreement on March 20, 1948. In the agreement, Cunanan ceded and acknowledged Basaran’s right of ownership and possession over a five-hectare portion (the southwestern part) of the land in dispute, and Basaran likewise renounced and acknowledged Cunanan’s right of ownership and possession over the other half. The Justice of the Peace Court rendered judgment based on this compromise, enjoining the parties to comply. The parties voluntarily complied with the decision from 1948 until about mid-1951. Cunanan then alleged that Basaran, taking advantage of his frequent absences, maliciously encroached beyond the five hectares ceded to him, occupying and harvesting coconuts from Cunanan’s portion. On August 26, 1953, Cunanan commenced an action in the Court of First Instance of Davao praying for execution of the Justice of Peace Court’s decision, for Basaran to vacate the usurped property, and for damages. The trial court dismissed the complaint, holding the compromise agreement null and void because it adjudicated ownership (beyond the inferior court’s competence) and because the action to execute the judgment after five years should have been brought in the same court that rendered it. The Court of Appeals affirmed the dismissal, declaring the Justice of the Peace Court’s decision null and void for lack of authority to pass upon title to real property and because the compromise agreement lacked the approval of the Provincial Governor of Davao or his representative as required for contracts with non-Christians under the Administrative Code of Mindanao and Sulu.

ISSUE

1. Whether the compromise agreement and the Justice of the Peace Court’s decision based thereon are null and void for adjudicating ownership of real property, which is beyond the court’s competence in a forcible entry case.
2. Whether the compromise agreement is null and void for lack of approval by the Provincial Governor or his representative as required under Sections 145 and 146 of the Administrative Code of Mindanao and Sulu for contracts with non-Christian inhabitants affecting real property.
3. Whether Cunanan’s action in the Court of First Instance for execution of the judgment was proper.

RULING

1. No. The compromise agreement and the decision did not amount to an adjudication on title. The mention of ownership in the agreement was merely as a basis for the right of possession, which was the only question sought to be settled and actually decided by the Justice of the Peace Court in the forcible entry case.
2. No. Sections 145 and 146 of the Administrative Code of Mindanao and Sulu, requiring gubernatorial approval for contracts affecting real property with non-Christians, do not apply to compromise agreements submitted to and approved by a court in a pending judicial proceeding. The evils sought to be avoided (misunderstanding of contract terms) are not present when the parties are assisted by counsel and the agreement receives judicial scrutiny and approval. The Justice of the Peace Court considered whether the parties understood their commitment and whether the agreement infringed any laws or local customs. Both parties voluntarily complied with the decision, indicating their awareness and intent.
3. Cunanan is not entitled to a writ of execution of the Justice of the Peace Court’s decision in this separate action because the decision had already been voluntarily executed by the parties. The proper remedy for execution would have been an application for a writ in the forcible entry case itself within five years from rendition, or an action for revival of the judgment after the expiration of that period. However, Cunanan’s complaint in the Court of First Instance is proper as an accion publiciana (a plenary action to recover possession), as he alleged Basaran usurped his portion for over a year before its institution. He is entitled to a determination of the factual issues raised in the pleadings.
The Supreme Court reversed the decisions of the Court of Appeals and the Court of First Instance and remanded the case to the Court of First Instance of Davao for further proceedings. Costs were imposed on Basaran Nicolas.