G.R. No. 73707 March 12, 1990
VICTORIA C. GO and EPIFANIO GO, petitioners, vs. HONORABLE INTERMEDIATE APPELLATE COURT (FIRST CIVIL CASES DIVISION), SPOUSES EUGENIO DE VERA and ELENA HERMOSA, respondents.

FACTS

The case involves a homestead awarded to respondent Eugenio de Vera, which was sold to petitioner Victoria Go in 1972. In 1975, the De Vera spouses filed an action to repurchase the homestead under Section 119 of the Public Land Act. The Gos moved to dismiss, claiming res judicata. They presented a 1972 compromise agreement, approved by the trial court, wherein the De Veras allegedly agreed to drop a prior repurchase case (Civil Case No. 1284) for an additional P1,000. The De Veras denied filing any prior case, asserted their signatures on the compromise were obtained through fraud, and claimed they never solicited the services of Atty. Mirabueno, who notarized the sale and also appeared as their counsel of record in the prior case.
The trial court dismissed the 1975 repurchase complaint. The Intermediate Appellate Court reversed, ordering reconveyance. The Gos elevated the case to the Supreme Court, primarily arguing that the 1972 compromise judgment barred the subsequent action.

RULING

The Supreme Court affirmed the Appellate Court’s decision, but on different grounds, holding that res judicata did not apply because the 1972 compromise agreement was void. The Court found the consent of the De Veras was vitiated by fraud. Critical circumstances revealed a pattern of deceit: Atty. Narciso Mirabueno, who was the notary for the sale and counsel for petitioner Go, also purportedly represented the De Veras in the prior case. He prepared the compromise agreement after the De Veras, who had limited education, were made to sign documents under the pretense they were mere formalities. The Court found the lawyer-client relationship between Atty. Mirabueno and the De Veras was a sham, part of a scheme to keep them ignorant of the case until it could be used to bar their repurchase right.
The legal logic is clear: A compromise agreement is a contract requiring mutual consent. Where consent is vitiated by fraud, the contract is voidable or void. Since the De Veras’ consent to the 1972 compromise was not real—there was no meeting of the minds—the agreement and the judgment based upon it produced no res judicata effect. Consequently, the statutory right to repurchase the homestead within the five-year period remained enforceable. The Court also referred Atty. Mirabueno’s conduct to the Integrated Bar of the Philippines for investigation.