GR 170395; (July, 2006) (Digest)
G.R. No. 170395 ; July 28, 2006
SPS. JESUS AND LOLITA MARTIR, petitioners, vs. SPS. RAYMUNDO AND PURA VERANO, respondents.
FACTS
Petitioners and respondents entered into a Compromise Agreement on March 18, 1991, to settle a prior civil case (Civil Case No. 5045) pending before the Regional Trial Court (RTC) of Bacolod City, Branch 51. The agreement obligated petitioners to sell ten lots to the Department of Agrarian Reform (DAR) and use part of the proceeds to settle respondents’ loan with the Philippine National Bank (PNB). The RTC, Branch 51, approved the agreement and rendered judgment in accordance with it. Respondents later alleged petitioners failed to fully comply, as only four lots were sold, causing their loan obligations to balloon.
Consequently, on February 9, 2000, respondents filed a new complaint for reimbursement (Civil Case No. 11066) before RTC Branch 43. Petitioners moved to dismiss this new case for lack of jurisdiction, arguing that any enforcement of the judicially approved compromise agreement must be sought via a motion for execution in the original court, Branch 51. The RTC Branch 43 granted the motion and dismissed the case. On appeal, the Court of Appeals reversed, ordering Branch 43 to proceed with the trial, prompting this petition.
ISSUE
Whether the Court of Appeals erred in ruling that respondents could file a separate civil action for breach of the judicially approved compromise agreement instead of seeking its enforcement through a motion for execution in the court that approved it.
RULING
The Supreme Court granted the petition and reinstated the RTC Branch 43’s order of dismissal. The Court held that a compromise agreement, once approved by the court, becomes a judgment on the merits with the force of res judicata. It transcends its identity as a mere contract and is immediately executory. The proper remedy for a party alleging non-compliance is not to institute a separate action re-litigating the same obligations. Instead, the aggrieved party must file a motion for the issuance of a writ of execution in the very court that rendered the judgment based on the compromise. This ensures finality and prevents multiplicity of suits over the same cause.
The Court emphasized that Branch 51 retained jurisdiction to enforce its own judgment. Respondents’ filing of a new complaint in Branch 43 was an improper circumvention of this procedural rule. The dismissal with prejudice of the original case (Civil Case No. 5045) solidified the compromise as a final judgment, not a mere basis for a new contract. Therefore, the RTC Branch 43 correctly dismissed the subsequent case for lack of jurisdiction.