GR L 22370; (May, 1966) (Digest)
G.R. No. L-22370 May 27, 1966
LILIA HERNAEZ, plaintiff and appellant, vs. YAN KAO, defendant and appellee.
FACTS
Plaintiff Lilia Hernaez, a former salesgirl at defendant Yan Kao’s Centro de Modas Tailoring, filed a complaint in the City Court of Davao City on April 27, 1963, for unpaid wages, differential pay, premium pay, and overtime pay totaling P1,641.90. The defendant moved to dismiss the complaint on the ground of release. This motion was based on a prior proceeding before the Department of Labor, Regional Office No. XII, where the plaintiff had filed an identical complaint in February 1963. That labor case concluded with an amicable settlement embodied in an “Affidavit of Release” dated February 26, 1963, executed by the plaintiff before Labor Attorney Bernardo G. Delfin. The affidavit stated that the plaintiff’s claims were paid to her full satisfaction through the Labor Attorney. The City Court granted the motion to dismiss on June 26, 1963. On appeal, the Court of First Instance of Davao, after reviewing the record, similarly dismissed the case on October 3, 1963, upon the same ground of release. The plaintiff appealed to the Supreme Court on a purely legal question.
ISSUE
Whether the “Affidavit of Release” executed by the plaintiff, which embodies an amicable settlement of her identical labor claims before the Department of Labor, constitutes a valid and binding compromise that bars her subsequent court action for the same cause of action.
RULING
Yes. The Supreme Court affirmed the order of dismissal. The Court held that the amicable settlement, as documented in the Affidavit of Release, is valid and binding. The plaintiff did not impugn the genuineness of the affidavit or allege that it was vitiated by fraud, threat, intimidation, mistake, or undue influence. The settlement was voluntary and to her full satisfaction. The law favors compromises. The Court rejected the plaintiff’s argument that the release amounted to a waiver of claims under Commonwealth Acts 303 and 444, clarifying that the settlement was not a waiver of a known right but a compromise of a controversy. Following the precedent in Mercader vs. Manila Polo Club, the Court ruled that by virtue of such a settlement, the plaintiff lost any right of action against the defendant concerning the claims covered by the compromise. The compromise has the force of law between the parties and cannot be unilaterally disregarded.