G.R. No. L-7044 January 31, 1955
ISIDRO MIRANDA, plaintiff-appellant, vs. LUCION M. TIANGCO, as Judge of the Municipal Court of Rizal City, THE SHERIFF OF RIZAL CITY, and MANUEL P. DOMINGUEZ, defendants-appellees.

FACTS

Isidro Miranda was a sublessee of three lots leased by Manuel Dominguez. For non-payment of rentals, Dominguez filed an ejectment case (Civil Case No. 14) in the Municipal Court of Pasay City. On October 10, 1947, the parties submitted a compromise agreement (“stipulation of facts”) which the court approved, wherein Miranda admitted arrears of P940, paid P200, and agreed to pay the balance plus current monthly rentals. Upon Miranda’s failure to comply, an order of execution was issued on November 28, 1947. On June 23, 1948, the parties submitted another agreement, also approved by the court, consolidating back rentals of P1,585 to be paid in installments and stipulating that upon Miranda’s failure, he could be ejected and the October 10, 1947 judgment revived. Miranda again defaulted. After further extensions, the court granted a motion for execution on January 8, 1949, and later ordered demolition of Miranda’s house. On April 7, 1949, Miranda filed an action in the Court of First Instance of Rizal to annul the June 23, 1948 agreement, alleging it did not represent the true intent, that the municipal court lacked jurisdiction to approve it as it modified a final judgment, and that the stipulated rentals violated Republic Act No. 66 . The Court of First Instance dismissed the complaint. Miranda appealed, raising pure questions of law, leading to the case’s referral to the Supreme Court.

ISSUE

1. Whether the propriety of the rentals agreed upon in the ejectment case can be raised in the present action for annulment.
2. Whether the municipal court had jurisdiction to approve the June 23, 1948 agreement and issue the subsequent writ of execution, considering the original judgment had become final.

RULING

The Supreme Court affirmed the dismissal of the complaint.
1. On the first issue, the Court held that Miranda is barred by the principle of res judicata, specifically estoppel by judgment. The judgment in the ejectment case, based on a compromise agreement, is a judgment by consent, which is conclusive and has the force of a final judgment on the merits. Under Section 44(b) of Rule 39 (now Rule 39, Section 47(b)), such a judgment is conclusive not only on matters actually litigated but also on any other matter that could have been raised. Miranda cannot now challenge the legality of the rental agreement in a separate action. Furthermore, a judgment by a court of competent jurisdiction can only be annulled on grounds of lack of jurisdiction, collusion, or fraud under Section 45 of Rule 123 (now Rule 132, Section 23), none of which were alleged.
2. On the second issue, the Court distinguished between a court’s jurisdiction to alter a final judgment and its jurisdiction to enforce it. The power to modify a judgment ends when it becomes final, but jurisdiction to execute it continues for five years under Rule 39, Section 6 (now Rule 39, Section 6). The June 23, 1948 agreement did not modify the original final judgment of November 28, 1947. Instead, it consolidated the unpaid rents from that judgment with subsequent accruals and provided a method of payment. As the case remained under the court’s jurisdiction for execution, and to prevent multiplicity of suits, the parties could submit, and the court could approve, a new compromise agreement concerning rents falling due after the original judgment. Thus, the municipal court acted within its jurisdiction. The Court deemed it unnecessary to rule on the alleged violation of the House Rental Law, as the issue was barred by conclusiveness of judgment.