G.R. No. L-22710 June 30, 1967
Domingo Bautista, petitioner, vs. The Court of Appeals, Philippine Ready-Mixed Concrete Co., Inc., and Central Surety and Insurance Co., respondents.

FACTS

In 1951 and 1952, Philippine Ready-Mixed Concrete Co., Inc. (Prmcci) had various road-building contracts with the Government. For the Highway 54 project, Prmcci and Central Surety & Insurance Co. (Central) executed a performance bond for P313,407.00 pursuant to Act 3688. Petitioner Domingo Bautista was a supplier of sand, gravel, and filling materials. To further assure payment for materials supplied for the España Extension and Highway 54 projects, Prmcci and Central executed an additional surety bond for P20,000.00 in favor of Bautista.
On January 31, 1952, Bautista filed a complaint (Civil Case No. 1636) against Prmcci and Central to recover P102,880.24, the unpaid balance for materials delivered from September 1951 to January 26, 1952. On February 14, 1952, Bautista and Prmcci entered into a judicial compromise agreement, wherein Prmcci acknowledged a consolidated debt of P104,000.00 for all materials supplied and used. The agreement specified payment sources: a P14,000.00 check from contract PR-521 (Plaza Lawton), a P67,000.00 check from contract PR-13(1) (Plaza Moriones and Juan Luna), and a P23,000.00 amount already assigned from a prior agreement. The court rendered judgment based on this compromise on February 15, 1952.
On April 2, 1952, Bautista filed another case (Civil Case No. 1711) against Prmcci to recover P37,686.80 for materials delivered in February and March 1952. On July 31, 1952, the Director of Public Works informed Bautista that the Highway 54 project was completed and that he could proceed against the performance bond for unpaid claims.
On October 3, 1952, Bautista filed the present case (Civil Case No. 1888) against Prmcci and Central to enforce the performance bond for P48,807.74. This amount consisted of P8,012.59 for materials delivered from February 14 to March 31, 1952, and P40,795.15 for materials delivered up to January 26, 1952 (which was included in the complaint in Civil Case No. 1636). Allied Enterprises Co., Inc. intervened to claim P13,629.42 for crushed rock supplied.
The trial court rendered judgment in favor of Bautista and the intervenor. The Court of Appeals modified this judgment, ordering defendants to pay Bautista only P8,012.59, affirming the rest. Bautista appealed to the Supreme Court, disputing the disallowance of the P40,795.15 balance.

ISSUE

Whether the final judgment by compromise in Civil Case No. 1636 bars the present action (Civil Case 1888) for the recovery of the P40,795.15 balance of the value of sand and gravel delivered to the Highway 54 project up to January 26, 1952.

RULING

Yes, the final judgment by compromise in Civil Case No. 1636 is a bar to the present action for the P40,795.15 balance.
The Supreme Court affirmed the decision of the Court of Appeals. The compromise agreement in Civil Case No. 1636 consolidated Prmcci’s various obligations into a single amount of P104,000.00, which was fully satisfied by payment from the specified sources. The P40,795.15 claim for materials delivered to Highway 54 up to January 26, 1952, was included in that consolidated obligation and was thus extinguished by payment. Bautista cannot revive this extinguished obligation by changing the application of payments to leave only the Highway 54 account unpaid. Furthermore, since the obligation was solidary under the performance bond, payment by one solidary debtor (Prmcci) extinguished the obligation, thereby also extinguishing Central’s liability for that amount. Therefore, Bautista’s recourse on the performance bond for the P40,795.15 is barred.