G.R. No. L-38577 July 31, 1975
C. K. SAN, doing business under the name and style “SAN BUILDERS (BRUNEI)”, petitioner, vs. HON. ELIAS B. ASUNCION, Judge of Branch XII of the Court of First Instance of Manila, MARINE TECHNICAL SERVICES, ELLIS H. R. DAVIES, TOP SERVICE, INC., SEVERINO DE LA CRUZ, THE BRANDMAN CO., INC., JOHN M. BRADLEY, LYDIA BRADLEY, ROLANDO C. CALDEA, FERDINAND J. GUERRERO, and JUAN G. ATENCIA, respondents.

FACTS

Petitioner C.K. San filed a petition for certiorari to annul orders of the respondent Court of First Instance of Manila in Civil Case No. 91758, which granted a writ of replevin for the vessel “Wave Victor” (alias “San Orient”) in favor of respondent Marine Technical Services. The Supreme Court issued a restraining order and later, during hearings, explored the possibility of a public auction of the vessel to preserve its value pending litigation. During these proceedings, a significant development arose when respondent Ellis H.R. Davies, allegedly representing Marine Technical Services, executed a Bill of Sale for the same vessel in favor of Tai Kien Industry Co. Ltd. in February 1974. This sale was not disclosed until after the certiorari petition was filed. Tai Kien subsequently moved to intervene in the case, claiming ownership. Petitioner opposed this intervention, arguing the sale was a brazen act of bad faith designed to mock the judicial process and deprive him of the property by potentially removing the vessel from Philippine jurisdiction.

ISSUE

The primary issue for the Supreme Court’s resolution was whether to approve a compromise agreement submitted by the principal parties and how to dispose of the pending motions, particularly the motion to intervene by Tai Kien Industry Co. Ltd.

RULING

The Supreme Court approved the Compromise Settlement executed by C.K. San, Brunei Shipping & Shipbuilding, Ltd. S.A., San Timber Ltd., and the respondents (excluding Marine Technical Services, Ellis H.R. Davies, and Juan G. Atencia). The legal logic for approval rests on the principle that compromises are highly favored in law to end litigation. The agreement detailed reciprocal concessions: petitioner’s group would pay a specified sum to certain respondents and would retain possession of several vessels, including the “San Orient,” while all parties mutually waived all claims related to the vessels. The Court found the terms not contrary to law, morals, public order, or public policy. By approving it, the Court rendered a judgment that was immediately executory, promoting judicial economy and finality. Consequently, the case was remanded to the trial court for implementation. Regarding Tai Kien’s motion to intervene, the Court denied it. The compromise had resolved the dispute among the original parties, rendering Tai Kien’s claim, which derived from a disputed sale by Davies, moot. Furthermore, the Court noted the oppositions by petitioner, which alleged the sale was a fraudulent maneuver executed during pending litigation. Allowing intervention after a final compromise would undermine the settlement and the Court’s approval. The case was deemed moot as to respondents Davies, Marine Technical Services, and Atencia due to their manifestation regarding the sale to Tai Kien.