GR L 3885; (July, 1951) (Digest)
G.R. No. L-3885 July 9, 1951
FELISA BASA VDA. DE CONCEPCION, Dr. SOFRONIO CONCEPCION, LOURDES CONCEPCION, LOURDES CONCEPCION, and Dr. JULIAN CONCEPCION, plaintiffs-appellants, vs. JOSE R. SANTOS, defendant-appellee.
FACTS
The plaintiffs, widow and children of Hermenegildo Concepcion, filed an initial action (Civil Case No. 8273) on October 30, 1941, in the Court of First Instance of Rizal against defendant Jose R. Santos. They prayed for recognition of their rights over a 5,000-square-meter portion of land (Lot No. 955) they had purchased on installment from Juan Fuentes, acceptance of the remaining installments, and execution of a certificate of sale upon full payment. They alleged that Fuentes had sold his rights over the entire lot to Santos, subject to the condition that Santos respect their existing installment contract, but Santos refused to recognize their rights or accept their payments.
On January 24, 1943, the parties executed a written “agreement of compromise.” They stipulated that the plaintiffs would take a reduced portion of 1,762 square meters instead of 5,000, in consideration of the amount already paid, and Santos would condone the unpaid balance. The plaintiffs would bear the expenses for the segregation survey, and upon its completion, Santos would execute an absolute deed of sale and cause the issuance of a certificate of title, with the plaintiffs bearing related charges and reimbursing taxes paid by Santos on that portion. The plaintiffs also agreed to file a motion to dismiss Civil Case No. 8273. In the compromise, the plaintiffs “remised, released and forever discharged” Santos from any and all claims and demands arising from the facts set out in the original complaint. Consequently, Civil Case No. 8273 was dismissed.
On July 6, 1949, the plaintiffs instituted the present action, reiterating substantially the same allegations from the dismissed case (including a prayer for a share of rent received by Santos from the U.S. Army for the lot’s use) and adding that, despite their fulfillment of their part of the compromise agreement (incurring expenses of P400), Santos had unjustly refused to comply with his obligations under said agreement.
The defendant moved to dismiss the complaint on two grounds: (1) that the claims set forth had been released, and (2) that the complaint failed to state a cause of action. The trial court dismissed the complaint on the ground that a previous action between the same parties based on the same subject matter had been compromised and dismissed.
ISSUE
Whether the trial court correctly dismissed the complaint.
RULING
Yes, the trial court’s order of dismissal is affirmed, but on the specific ground that the subject of the complaint (the claims under the original sale contract) had been released by the compromise agreement and could not be litigated anew, and not on the ground of res adjudicata.
The Court held that the dismissal of the first case (No. 8273) did not constitute res adjudicata in the legal sense, as the order of dismissal made no reference to nor contained any adjudication based on the compromise agreement. However, the comprehensive release clause in the compromise agreement—whereby the plaintiffs discharged the defendant from “any and all claims and demands whatsoever… growing out of or arising from the facts, circumstances, and things set out in the complaint”—effectively barred any subsequent action on the original contract of sale. The old agreement was merged into and superseded by the new compromise. Non-compliance with the compromise did not revive the original covenant or the cause of action under it; the plaintiffs’ recourse was to file a new appropriate action to enforce the terms of the compromise agreement itself.
The Court further noted that the present complaint was not intended to secure rescission or enforcement of the compromise. It was essentially based on the extinguished original contract, and its defects could not be cured by amendment without introducing a new cause of action, which is not permitted. Therefore, on the basis of the released contract of sale, the plaintiffs would not be entitled to relief under any state of facts provable in support of the claim asserted.