GR 74461; (May, 1989) (Digest)
G.R. No. 74461 May 12, 1989
JUAN ASONG, petitioner, vs. THE HONORABLE INTERMEDIATE APPELLATE COURT, ALBARO ALBANO, JR. and SEVERINO BANASIG, respondents.
FACTS
Private respondent Severino Banasig filed a forcible entry case against petitioner Juan Asong before the Municipal Court. The parties subsequently submitted an amicable settlement wherein Asong recognized Banasig’s ownership and possession of two specific lots, Lot Nos. 2925 and 2654. The court approved this settlement and rendered judgment based upon it.
Over a year later, Asong filed a complaint in the Court of First Instance seeking to annul the amicable settlement and recover ownership. He contended he was illiterate, did not understand the settlement’s contents, and only intended to concede rights to a different lot. He claimed he discovered the alleged defect when cited for contempt for refusing to vacate the lots.
ISSUE
Whether the amicable settlement was voluntarily and freely entered into by petitioner, thereby precluding its annulment on grounds of mistake.
RULING
The Supreme Court affirmed the lower courts’ decisions, upholding the validity of the amicable settlement. The legal logic rests on the finality of factual findings and the nature of compromise agreements. Factual conclusions of the trial court, especially on witness credibility, are accorded great weight and are generally not disturbed on appeal absent strong, cogent reasons. The record contained positive testimonies from Asong’s own lawyer, another attorney, and the municipal judge, all of whom explained the settlement’s terms to him in the Hiligaynon dialect. Their testimonies were found credible and unrebutted by any contrary evidence.
On the substantive law, the Court ruled that a compromise agreement is a binding contract favored by law to avoid litigation. It cannot be invalidated merely because it appears one-sided or because a party later perceives it as unfavorable. The principle from Berg v. National City Bank of New York, as cited, establishes that a compromise made in good faith, free from fraud or mistake, is binding even if the terms are harsh or the claim surrendered was baseless. Asong’s belated claim of mistake, raised only after Banasig had taken possession and cultivated the land, was deemed dubious. His inaction for over a year contradicted his assertion of lack of understanding. Consequently, the settlement constituted a valid and irrevocable resolution of the possessory dispute and a bar to the subsequent action.