GR L 62023; (November, 1983) (Digest)
G.R. No. L-62023, November 29, 1983
G & S CORPORATION, Petitioner, v. THE HONORABLE COURT OF APPEALS AND INTEGRATED REALTY CORPORATION, Respondents.
FACTS
This case originated as an ejectment action. Petitioner G & S Corporation and private respondent Integrated Realty Corporation were the original parties. During the pendency of the appeal before the Supreme Court, the parties, together with a non-party entity, Dataprep (Phil.) Inc., submitted a joint “Motion for Judgment on a Compromise Agreement.”
The Compromise Agreement detailed several key terms. First, Dataprep voluntarily submitted to the Court’s jurisdiction to be made a party. Second, G & S Corporation and Dataprep jointly and severally admitted liability to Integrated Realty for a principal sum of P297,030.98, payable in specified installments through postdated checks. Third, G & S Corporation agreed to pay attorney’s fees of P75,000.00, with a balance of P50,000.00 payable on a schedule. Furthermore, Integrated Realty and Dataprep would execute a new lease contract for the premises starting October 1, 1983. The parties mutually waived all other claims and counterclaims arising from the case, agreeing that this Compromise Agreement would supersede the Court of Appeals Decision dated June 23, 1982, which was the subject of the appeal. A provision stipulated that any violation would render the entire unpaid balance immediately due and demandable.
ISSUE
Whether the Compromise Agreement executed by the parties, including a non-party who voluntarily submitted to the Court’s jurisdiction, should be approved and rendered as the judgment of the Court.
RULING
Yes, the Supreme Court approved the Compromise Agreement and rendered judgment based on its terms. The legal logic is grounded in the policy of encouraging amicable settlements to end litigation, as enshrined in the Rules of Court. A compromise is a contract whereby the parties, by making reciprocal concessions, avoid a litigation or put an end to one already commenced. For a compromise agreement to be judicially approved, it must not be contrary to law, morals, good customs, public order, or public policy.
The Court examined the submitted agreement and found it compliant with these legal requirements. The terms were clear, involved reciprocal concessions from all sides—including the payment of a debt, execution of a new lease, and mutual waiver of claims—and settled the pending appeal. The voluntary inclusion of Dataprep, though not an original party, was permissible as it consented to the Court’s jurisdiction for the specific purpose of the compromise, thereby binding itself to the agreement’s terms. By superseding the appealed Court of Appeals decision, the compromise effectively resolved the entire controversy. Consequently, the Court approved the agreement, rendering it the final and executory judgment of the case, and enjoined the parties to comply in good faith. No costs were awarded.