G.R. No. L-24458-64 July 31, 1969
AMANDO ALGABRE, ENRICO ATAÑGAN, JOSE CAONTOY, APOLONIO GONZALES, BONIFACIO JALEA, BENITO LAMELA, HILARION LAMELA, PATRICIO LOBREDO, RODRIGO MONTEVERDE, PEDRO SALCEDO, MANUEL SALMAGA, ALFREDO VILLANUEVA, TRANQUILINO VILLARTA, and RAYMUNDO CASIANO, CONSOLACION GONZALES, FILOMENO HECHANOVA, EDE LAMELA, GENOFREO LAMELA, MAXIMO LAMELA, ALFREDO LOBREDO, FLORENTINO LOBREDO, HERMOGENES LOBREDO, FEDERICO LAMELA, SANTOS LEYES, FEDERICO MALUNES and BARTOLOME ACONIA, JUAN BAÑES, BENJAMIN GONZALES, FRANCISCO GONZALES, RICARDO LAMELA, LUCIANO NAPAGAO and WILFREDO VILLARTA, petitioners, vs. THE COURT OF APPEALS, and REBECCA ANDRES, respondents.

FACTS

The landholder, Rebecca Andres, entered into three separate but identical Compromise Agreements with three groups of tenants (33 in total) on December 4, 1962, and May 20, 1963. In these agreements, the tenants agreed to surrender their landholdings to Andres. In return, Andres condoned their previous loans and gave them specified sums of money. The agreements were acknowledged before a Deputy Clerk of Court, who certified that the contents were translated into the local dialect and that the parties entered into them voluntarily. The Court of Agrarian Relations (CAR), presided by Judge Valeriano A. del Valle, approved these Compromise Agreements and rendered judgments based on them on December 7, 1962, June 17, 1963, and June 18, 1963, finding nothing contrary to law, morals, or public policy.
On July 9, 1963, the tenants, represented by counsel, filed a Motion for Reconsideration in the three CAR cases (2217, 2455, 2456), alleging that their signatures on the compromise agreements were obtained through coercion, intimidation, and trickery, and that the agreed amounts were not paid. Rebecca Andres opposed, arguing the judgments had become final under Section 12 of Republic Act 1267, as amended. On April 27, 1964, Judge Jose R. Cabatuando denied the motion in CAR Case 2217 as filed out of time.
Subsequently, six individual tenants filed separate reinstatement cases (CAR Cases 2815, 2816, 2817, 2818, 2819, 2826) on December 12, 1963, praying for reinstatement to their landholdings and damages. Andres moved to dismiss these based on res judicata, but the motion was overruled.
In a turn of events, on July 15, 1964, Judge Cabatuando issued an order vacating the judgments in the three compromise agreement cases (2217, 2455, 2456), citing that no summons were issued, no pleadings were filed, no hearing was held, and there was no prior pending case, thus holding the court did not acquire jurisdiction over the persons of the tenants. This order was inconsistent with his earlier April 27, 1964 order upholding the finality of the judgment in CAR Case 2217.

ISSUE

The primary issue revolves around the validity of the Compromise Agreements and the subsequent judgments approving them, specifically whether the tenants’ consent was vitiated and whether the Court of Agrarian Relations acquired jurisdiction over the tenants in those cases.

RULING

The Supreme Court affirmed the decision of the Court of Appeals with modification. It held that the grounds alleged by the tenants in their Motion for Reconsideration—coercion, intimidation, and trickery—pertain to the vitiation of consent under Article 1330 of the Civil Code, making a contract voidable. A compromise agreement has the effect of res judicata only if consent is not vitiated. However, the presence of vitiated consent must be established by clear and convincing evidence.
The Supreme Court ruled that these cases should be returned to the trial court for the determination of the truth of the allegation of vitiated consent based on the evidence the parties may present. To avoid further delay, the trial court should treat the cases not merely as motions to set aside the questioned decisions, but as actions to set aside the compromise agreements themselves. Consequently, it is unnecessary to determine whether the decisions have become final and executory.
With this resolution for CAR Cases 2217, 2455, and 2456, the six reinstatement cases (2815, 2816, 2817, 2818, 2819, 2826) are automatically resolved along the same lines. The decision of the Court of Appeals was affirmed, with the sole modification that the requirement for the trial court to determine if the decisions have become final is eliminated.