G.R. No. L-48257 August 24, 1984
ROGELIO MANIA, petitioner, vs. JOSEFINA VDA. DE SEGARRA and COURT OF FIRST INSTANCE OF CAMARINES SUR, BRANCH IV, respondents.

FACTS

Respondent Josefina Vda. de Segarra filed an ejectment case against petitioner Rogelio Mania in the City Court of Naga for non-payment of rent. The court rendered a decision based on a compromise agreement requiring Mania to pay P2,150.00 within 20 days from June 27, 1975. Failure to pay would result in the transfer of his personal properties to Segarra and his immediate vacatur of the premises. If he paid, he could continue occupying the premises provided he paid rentals regularly starting August 1975, with default allowing Segarra to eject him.
After the stipulated 20-day period, Mania made substantial payments, which Segarra accepted. In April 1976, Segarra moved for execution of the original decision. Mania moved to quash, arguing his payments constituted substantial compliance and implied novation of the agreement. The City Court agreed, recalling the writ of execution for ejectment and ordering a new writ only for a monetary balance of P650.00. Segarra appealed this order to the Court of First Instance (CFI).

ISSUE

The primary issue is whether the Court of Appeals had jurisdiction to review the CFI’s decision on an appeal from the City Court’s order in an ejectment case. Subsidiarily, whether the CFI correctly ruled that the City Court’s orders (the restraining order and the order recalling the writ of execution) had no legal justification, thereby reinstating the original decision for ejectment.

RULING

The Supreme Court dismissed the petition. On jurisdiction, the Court held that appeals from decisions of the CFI reviewing cases originating from inferior courts (like the City Court) fall under the jurisdiction of the Court of Appeals, pursuant to Section 45 of the Judiciary Act ( Republic Act No. 296 ), as amended by Republic Act No. 6031 . The CFI, in such instances, exercises appellate jurisdiction, and its decisions are reviewable by the Court of Appeals, not the Supreme Court, on a petition for review. The Court noted that procedural rules on appeals were subsequently simplified by Batas Pambansa Blg. 129 and the Interim Rules, but the jurisdictional hierarchy established by law at the time governed this case.
On the substantive merits, the Supreme Court sustained the CFI’s reversal of the City Court’s orders. The legal logic is that a judgment based on a compromise agreement, once approved by the court, becomes final and executory and has the force of res judicata. It ceases to be a mere contract and is transformed into a court judgment. Acceptance of delayed payments by the creditor, without a new agreement expressly or impliedly modifying the terms of the compromise judgment, does not constitute novation. Novation requires a clear intention to extinguish the old obligation and replace it with a new one. Here, Segarra’s mere acceptance of payments after the breach did not manifest consent to supersede the final judgment, which contained a resolutory condition (vacatur upon default). Therefore, the City Court exceeded its jurisdiction in recalling the writ of execution for ejectment based on an implied novation, as the final and executory judgment mandated Mania’s ejectment for his failure to pay within the original 20-day period. The CFI correctly nullified the City Court’s orders for lack of legal basis.