G.R. No. L-15739. April 29, 1961.
INTESTATE ESTATE OF THE LATE MARTIN LACSON, JR. EMILIANO LACSON, SR., administrator-appellee, vs. JACINTO DELGADO, reservee-claimant-appellant.

FACTS

These are proceedings for the intestate estate of Martin Lacson, Jr. The joint petition for administration was filed by Emiliano Lacson, Sr. (the deceased’s father and heir) and Jacinto Delgado (the reservee of the estate properties, which he inherited from his mother Consolacion Delgado). The petition appointed Emiliano as administrator. It declared that funeral expenses totaled P9,345.00, with Delgado advancing P3,359.10 and Lacson advancing P5,985.90. The parties expressly agreed that these amounts “shall be paid proportionally and annually by the opponent in his capacity as judicial administrator, with two-thirds of the annual produce of the lands under administration starting from the 1952-1953 crop and so on without interruption until fully paid.”
Subsequent incidents involved disputes over the administrator’s accounts. A commissioner found the estate’s balance to be P4,948.69, favoring Delgado’s objections. Despite this, the court approved a later account filed by the administrator, which applied a lesser balance to his own claim. The administrator then filed a project of partition adjudicating all properties to himself, subject to Delgado’s claim. Delgado objected, citing unpaid debts. The lower court then issued the orders under appeal, directing the administrator to sell estate property within a specified period to pay the obligations, under threat of removal.

ISSUE

Whether the lower court erred in ordering the sale of estate properties to pay the debts, thereby disregarding the specific payment agreement entered into by the parties at the inception of the proceedings.

RULING

Yes. The Supreme Court set aside the appealed orders. The legal logic centers on the binding nature of the agreement between the administrator and the reservee-claimant. This agreement, incorporated in their joint petition and sanctioned by the court, stipulated a precise method for liquidating the funeral expense debts: using two-thirds of the annual income from the estate’s lands, to be paid proportionally to the parties until the advances were fully settled. The Court characterized this agreement as a judicial compromise, which, under Article 2067 of the Civil Code, has the effect and authority of res judicata and is enforceable as a final judgment.
Consequently, the lower court was bound to enforce this compromise agreement. It erred in sanctioning a different mode of payment—the forced sale of estate properties—which was prejudicial to Delgado as the sole reservee entitled to the properties. The correct procedure was to compel the administrator to strictly comply with the agreed-upon income-sharing scheme. No partition or sale of properties should have been ordered until the claims were satisfied according to the terms of the compromise. The case was remanded with instructions for the lower court to adhere to the stipulated agreement.