GR 190818; (November, 2014) (Digest)
G.R. No. 190818 , November 10, 2014
METRO MANILA SHOPPING MECCA CORP., SHOEMART, INC., SM PRIME HOLDINGS, INC., STAR APPLIANCES CENTER, SUPER VALUE, INC., ACE HARDWARE PHILIPPINES, INC., HEALTH AND BEAUTY, INC., JOLLIMART PHILS. CORP., and SURPLUS MARKETING CORPORATION, Petitioners, vs. MS. LIBERTY M. TOLEDO, in her official capacity as the City Treasurer of Manila, and THE CITY OF MANILA, Respondents.
FACTS
Petitioners filed a Manifestation and Motion seeking the approval of the terms and conditions of a Universal Compromise Agreement (UCA) dated June 1, 2012, in lieu of the Court’s Decision dated June 5, 2013, which had denied petitioners’ claim for tax refund/credit of local business taxes paid to the City of Manila. The UCA was an amicable settlement of all cases between the parties involving claims for tax refund/credit, including the instant case. A pertinent provision of the UCA stated that no refunds or tax credit certificates would be given by the City of Manila in the case of “SC GR 190818.” Respondents confirmed the UCA’s authenticity but submitted that it had no effect on the subject Decision as the taxes paid in the instant case were not included in the agreement.
ISSUE
Whether the Universal Compromise Agreement (UCA) should be approved and adopted by the Court to govern the settlement of the present dispute.
RULING
Yes. The Court granted the petitioners’ Manifestation and Motion, set aside its Decision dated June 5, 2013, and approved and adopted the pertinent terms and conditions of the UCA as the Decision of the Court. The Court held that a compromise agreement is a valid contract whereby parties make reciprocal concessions to avoid or end litigation. Its terms must not be contrary to law, morals, good customs, public policy, and public order. When judicially approved, it has the force and effect of a judgment. The Court found that the local business taxes subject of the instant case were clearly covered by the UCA, as they were paid pursuant to the same provision of the Revenue Code of Manila referenced in the UCA’s whereas clauses. The UCA was executed validly, more than a year prior to the Court’s Decision, and the result of both the UCA and the subject Decision were identical—that petitioners are not entitled to any tax refund/credit. The parties were ordered to faithfully comply with the UCA’s terms.