G.R. No. L-25897 August 21, 1976
AGUSTIN DORMITORIO and LEONCIA D. DORMITORIO, petitioners, vs. HONORABLE JOSE FERNANDEZ, Judge of the Court of First Instance of Negros Occidental, Branch Bacolod City, and SERAFIN LAZALITA, respondents.

FACTS

The petitioners, the Dormitorio spouses, were the plaintiffs in Civil Case No. 5111, which resulted in a decision in their favor on September 5, 1961. Subsequently, the parties were involved in a related case, Civil Case No. 6553, where their roles were reversed. In this later case, the parties entered into an “Agreed Stipulation of Facts” which was approved by the court and formed the basis for a judgment dated February 12, 1965. This stipulation explicitly stated that the decision in Civil Case No. 5111 “shall not be enforced and executed anymore” and provided for the reimbursement of respondent Serafin Lazalita for expenses in relocating his house. Years later, the petitioners filed an ex-parte motion and secured a writ of execution to enforce the 1961 decision from Case No. 5111. Respondent Lazalita filed a petition for relief, arguing that the writ was based on a decision that had been superseded by the compromise agreement embodied in the 1965 judgment from Case No. 6553. Respondent Judge Jose Fernandez granted the petition and set aside the writ of execution.

ISSUE

Whether the respondent Judge committed grave abuse of discretion in setting aside the writ of execution issued for the enforcement of the 1961 decision, based on a subsequent compromise judgment.

RULING

The Supreme Court dismissed the petition, holding that the respondent Judge acted correctly and without abuse of discretion. The legal logic is anchored on the principle that a final judgment based on a compromise agreement has the effect of res judicata and constitutes a binding contract between the parties. The Court emphasized that the “Agreed Stipulation of Facts” in Civil Case No. 6553, which was judicially approved, clearly manifested an animus novandi—an intention to novate or supersede the obligations under the prior 1961 decision. Since the parties and the subject matter in the two cases were identical, the later compromise agreement effectively replaced and rendered unenforceable the earlier judgment. Therefore, the petitioners’ attempt to execute the superseded decision was improper. The Court further noted that any initial lack of notice to the petitioners regarding the petition for relief was cured when they were afforded, and availed themselves of, the opportunity to file a motion for reconsideration of the order setting aside the writ, thus satisfying procedural due process. The respondent Judge’s act of correcting the erroneous execution was in accordance with law.