GR 52324; (November, 1981) (Digest)
G.R. No. L-52324 November 23, 1981
MAR-BAY & COMPANY, INC., petitioner, vs. M. G. SUNTAY TRADING CO., INC. and THE HONORABLE COURT OF APPEALS, respondents.
FACTS
The case originated from a dispute between Mar-Bay & Company, Inc. and M. G. Suntay Trading Co., Inc. The Supreme Court had issued restraining orders on September 12 and 19, 1980, preventing the Development Bank of the Philippines (DBP) from releasing a total of P5.5 million in loan proceeds, which were the subject of the controversy. While the petition for review was pending before the Supreme Court, the parties executed a Compromise Agreement on October 14, 1981, which was duly acknowledged.
The Compromise Agreement outlined a settlement to resolve their mutual claims. Key terms included the withdrawal and release of the P5.5 million held by the DBP, with Mar-Bay receiving P4.5 million and Suntay Trading receiving P1 million. Mar-Bay agreed to post a P2 million surety bond to guarantee its future payment obligations to Suntay Trading for rentals covering a 20-year period. Both parties agreed to dismiss the Supreme Court petition and to accept the pending decision of the Court of Appeals in a related civil case, waiving any further appeal to the Supreme Court on that matter.
ISSUE
Whether the Compromise Agreement executed by the parties should be approved by the Supreme Court.
RULING
The Supreme Court approved the Compromise Agreement. The legal logic is grounded in the principle that compromise agreements are a favored means of settling disputes to avoid protracted litigation. The Court meticulously examined the agreement and found it to be proper and duly authorized. The Board of Directors of both corporations had confirmed and ratified the agreement, as attested by their respective Corporate Secretaries, ensuring that the corporate representatives, Presidents Agustin Tanco and Manolita G. Suntay, had the proper authority to bind their companies.
The Court’s approval is contingent on the agreement not being contrary to law, morals, good customs, public order, or public policy. Finding no such contravention in the stipulated terms, the Court rendered judgment in accordance with the agreement. Consequently, the Court ordered the lifting of the restraining orders on the DBP, directed the DBP to disburse the funds as stipulated (P4.5 million to Mar-Bay and P1 million to Suntay Trading), and dismissed the petition for review as having been rendered moot and academic by the settlement. The parties were enjoined to comply strictly and in good faith with all terms of the approved agreement.