Ayala Land Inc v. Navarro : 127079 : May 7, 2004 : J. Sandoval-Gutierrez
: Third Division : Decision
[G.R. NO. 127079 : May 7, 2004]
AYALA LAND, INC, Petitioner, v. WILLIAM NAVARRO, ISAGANI NAVARRO, ILUMINADA LEGASPI, BELEN DOLLETON,
FLORENTINO ARCIAGA, BARTOLOME PATUGA, DIONISIO IGNACIO, BERNARDINO ARGANA, and
ERLINDA ARGANA, Respondents.
D E C I S I O N
Before us is a Petition for Review on Certiorari assailing
the Decision1 dated September 27, 1996 and Resolution2 dated November 7, 1996 of the Court of Appeals in CA-G.R. SP No. 40948,
entitled Ayala Land, Inc. v. Judge Florentino Alumbres, in his capacity as
Presiding Judge of Br. 255 of RTC of Las Pias, Metro Manila, William Navarro,
Isagani Navarro, Iluminada Legaspi, Belen Dolleton, Florentino Arciaga,
Bartolome Patuga, Dionisio Ignacio, Bernardino Argana and Erlinda Argana.
The factual antecedents as borne by the records are:chanroblesvirtua1awlibrary
On September 6, 1993, the above-named respondents filed with the
Regional Trial Court, Branch 147, Makati City, a complaint for annulment of
titles (Transfer Certificates of Title Nos. T-36975 to T-36983),
possession and damages against Las Pias Ventures, Inc., docketed as Civil Case
Ayala Land, Inc.,
Petitioner, filed a motion for substitution
praying that it should be substituted as party defendant on the ground that in
1991, Las Pias Ventures, Inc. merged with it.
Petitioner also filed a motion to dismiss the complaint on the following
grounds: (1) the cause of action has prescribed; (2) the complaint fails to
state a sufficient cause of action; and (3) the filing fees were not paid.
Respondents then filed an amended complaint impleading petitioner
as party defendant.
On December 29, 1993, respondents filed a motion to prosecute
action as pauper litigants alleging that their individual gross income does not
P4,000.00 a month.
Subsequently, the case was re-raffled to Branch 255 at Las Pias
presided by Judge Florentino Alumbres.
In an Order dated January 3, 1995, Judge Alumbres granted
respondents motion to prosecute action as pauper litigants and admitted their
Petitioner then filed an answer.
During the pre-trial conference, petitioner filed consolidated
motions for production of documents3 and for the striking out of the amended complaint4 for non-payment of docket fees.
On March 4, 1996, the trial court denied the consolidated motions, hence, petitioner filed a motion for
But, in an Order dated May 27, 1996, the trial court denied
the motion for inhibition,prompting petitioner to file with the
Court of Appeals a Petition for Certiorari assailing that Order and the
Order allowing private respondents to litigate as paupers.
The Appellate Court, in a Decision dated September 27, 1996,
dismissed the petition, ratiocinating as follows:chanroblesvirtua1awlibrary
The first issue to be resolved is the propriety of the respondent
Judges Order allowing the private respondents to litigate as pauper.
x x x
Evidently enough, private respondents have complied with the
requirements of the law to be bestowed the status of pauper litigants.
Having complied with the requirements of
the rules, and none has been shown to the contrary, it is imperative on the
part of respondent Judge to confer the right to private respondents to litigate
x x x
We now come to the matter of inhibition of the respondent Judge.
In particular, the petitioner enumerated the instances whereby the
respondent judge allegedly exhibited hostility and bias against petitioner and
counsel, and partiality towards the private respondents x x x
x x x
Going by the actuations of the respondent Judge pointed to by the
petitioner as indicative of hostility, bias and partiality, We fail to see how
such actuations may readily be branded as such.
First, as discussed in the earlier part of this decision, the
denial of petitioners motion to strike out amended complaint is in accord with
law and jurisprudence.
petitioners remonstrance on this respect does not hold water.
Second, the remark of the respondent Judge referring to the private
respondents as genuine owners and the respondent Judges prodding that
petitioner better negotiate with the genuine owners should not be readily
colored with prejudgment.
x x x
Third, the barrage of motions to dismiss filed by the petitioners
ostensibly on identical grounds impelled the respondent Judge to issue the
warning of contempt.
The records of
this case is very revealing on this matter, and We cannot thus fault the
respondent Judge in so doing.
x x x
WHEREFORE, the petition is hereby DISMISSED for lack of merit.
From the said Decision, petitioner filed a motion for
reconsideration but was denied.
Hence, this Petition for Review on Certiorari .
For our resolution is the issue of whether
the Court of Appeals erred (1) in holding that respondents are pauper
litigants; and (2) in sustaining the trial courts Order denying petitioners
motion for inhibition.
During the pendency of the instant petition, both parties, on May
13, 1997, executed a memorandum of agreement (MOA) wherein respondents agreed
to transfer to petitioner their rights of ownership over the subject land for a
consideration of One Hundred Twenty Million (
The MOA also provided that Ten
Million ( P10,000,000.00) Pesos representing attorneys fee of Atty.
Hicoblino Catly, respondents counsel, shall be deducted from P120,000,000.00.
The parties then submitted to the trial
court their joint motion for judgment based on their compromise agreement.
This prompted Atty. Catly to file with the trial court a
manifestation and motion alleging that under his retainer agreement5 with respondents, he is entitled to Thirty Million(
P30,000,000.00) Pesos as attorneys fee or 25% of the P120,000,000.00.
Subsequently or on May 27, 1997,
Petitioner, respondents and
Atty. Catly executed an amendatory
agreement6 wherein they included in the original compromise agreement or MOA the provision
that Twenty Million (
P20,000,000.00) Pesos will be paid to Atty. Catly
in addition to the P10,000,000.00 previously agreed upon,
as attorneys fee, subject to the trial
In a Judgment7 dated July 22, 1997, the trial court approved the parties amendatory agreement
and directed petitioner to release Atty. Catlys additional attorneys fee of
to the Court for approval and judgment on June 9, 1997 is the JOINT MOTION FOR
JUDGMENT BASED ON COMPROMISE dated May 13, 1997 of the parties, duly assisted
by their counsels, Atty. Hicoblino M. Catly for the plaintiffs and Atty.
Alexander J. Poblador for the defendant.
During the hearing of the said motion on June 10, 1997, the parties
discussed an AMENDATORY AGREEMENT which relates to attorneys fees of Atty.
Catly which they alluded to as forming part of their compromise agreement, but
this said amendatory agreement has not yet been submitted to the Court.
On June 23, 1997, an order was issued
directing the parties to submit the same for approval by the Court.
Thus, on June 27, 1997, in compliance with the said order, the
plaintiffs submitted their copy which is not notarized, while the defendant
submitted its copy, duly notarized, on July 4, 1997.
x x x
Finding the terms and conditions set forth under the Amendatory
Agreement to be freely agreed upon, and the same not being contrary to law,
morals, public order and public policy, the same are hereby approved.
WHEREFORE, judgment is hereby rendered on the basis of the terms
and conditions agreed upon under the Amendatory Agreement with emphasis on
Paragraphs 2, 3 and 4 thereof, and in accordance with Section 5, Rule 36 of the
Rules of Civil Procedure.
ACCORDINGLY, the defendant is directed to immediately release the
sum of Twenty Million (
P20,000,000.00) Pesos in favor of Atty. Hicoblino
M. Catly representing his attorneys fees as herein approved by the Court.
Immediately, Atty. Catly, in order to get hold of his attorneys
fee, filed with the trial court a motion praying for the execution of its compromise
Thereupon, respondents filed
with this Court an urgent application for a temporary restraining order to enjoin
the trial court from enforcing its Judgment, specifically with respect to Atty.
Catlys attorneys fee of
P30,000,000.00.For its part, petitioner filed with the trial court an opposition
to Atty. Catlys motion.
The trial court then held in abeyance its resolution of Atty.
Catlys motion until after we shall have resolved respondents urgent
application for a temporary restraining order.
We now go back to the issue raised in the instant petition, i.e.,
whether or not the Court of Appeals erred (a) in allowing respondents to
litigate as paupers; and, (b) in sustaining the trial courts order denying
petitioners motion for inhibition.
Obviously, with the execution of the May 13, 1997 MOA or
compromise agreement and the May 27, 1997 amendatory agreement, the parties
resolved to settle their differences and put an end to the litigation.8 It bears reiterating that on July 22, 1997, the trial court rendered its
Judgment approving this amendatory agreement.
We have consistently held that a compromise agreement, once
approved by final order of the court, has the force of res judicata
between the parties and should not be disturbed except for vices of consent or
forgery.9 In Armed Forces of the Philippines
Mutual Benefit Association v. Court of Appeals ,10 we also held:chanroblesvirtua1awlibrary
Once stamped with judicial imprimatur, it (compromise
agreement) becomes more than a mere contract binding upon the parties; having
the sanction of the court and entered as its determination of the controversy,
it has the force and effect of any other judgment.It has the effect and authority of res judicata, although
no execution may issue until it would have received the corresponding approval
of the court where the litigation pends and its compliance with the terms of
the agreement is thereupon decreed.
judicial compromise is likewise circumscribed by the rules of procedure.
Thus, by virtue of the trial courts Judgment approving the
parties amendatory agreement (or amendatory compromise agreement),
petition has become moot and academic.11 cralawred
In City of Laoag v. Public Service Commission,12 we ruled that a petition may be dismissed in view of the compromise agreement
entered into by the parties.
Relative to Atty. Catlys attorneys fee of
while it was agreed upon by both parties in their MOA and amendatory agreement,
however, they are now contesting its reasonableness.In fact, petitioner filed with the trial court an opposition to
Atty. Catlys motion for execution of compromise Judgment on the ground that
his attorneys fee is excessive and unconscionable; while respondents filed
with this Court a motion for the issuance of a temporary restraining order to
enjoin the trial court from granting Atty. Catlys motion.
The issue of whether or not Atty. Catlys attorneys fee is
reasonable should be resolved by the trial court.For one, this incident stemmed from Atty. Catlys motion for
execution of the compromise Judgment filed with the trial court.
As earlier stated, petitioner filed its
opposition, also with the trial court.
For another, this incident appears to be factual and is being raised
before us only for the first time.
In De Rama v. Court of Appeals,
13 we held that issues or questions of fact cannot be raised for the first time
WHEREFORE, the instant
petition, being moot, is DENIED.
Nonetheless, let the records be
remanded to the trial court for the purpose of resolving with dispatch the
propriety of Atty. Hicoblino Catlys attorneys fee of
being assailed by both parties before that court.
Vitug, (Chairman), Corona, and
Carpio-Morales, JJ., concur.
1 Annex A of the Petition for Review on Certiorari, Rollo at 88-99.
2 Annex B, id. at 106-107.
3 The motion prayed for the production of tax declarations alleged in the amended
4 The motion to strike out the amended complaint was based on the
ground that the market value of the claims
of Florentino Navarro and Leon Argana, private respondents, exceeded
thus they cannot be considered pauper litigants.
5 Under the retainer agreement, respondents counsel is entitled to attorneys
fees equivalent to 25% of the total area recovered or its equivalent in cash
upon successful termination of court litigation.
6 Annex C of the Manifestation and Motion, Rollo. at 423-426.
7 Annex A of the Urgent Application for Temporary Restraining Order, id. at
8 Article 2028 of the New Civil Code provides:chanroblesvirtua1awlibrary
A compromise is a contract
whereby the parties, by making reciprocal concessions, avoid a litigation or
put an end to one already commenced.
11 Ordonez v. Gustilo,G.R. No. 81835, December 20, 1990,
192 SCRA 469, citing Berenguer v. Arcangel, 149 SCRA 164 (1987).
12 G.R. NOS. L-32097-98, March 30, 1979, 89 SCRA 207, citing Socorro v. Ortiz,
12 SCRA 641 (1964).
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