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Prof. Joselito Guianan Chan's The Labor Code of the Philippines, Annotated Labor Standards & Social Legislation Volume I of a 3-Volume Series 2019 Edition (3rd Revised Edition)
 

 
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UNITED STATES SUPREME COURT JURISPRUDENCE
 

 
PHILIPPINE SUPREME COURT JURISPRUDENCE
 

   
December-2009 Jurisprudence                 

  • A.C. No. 7054 - Conrado N. Que v. Atty. Anastacio Revilla, Jr.

  • A.M. No. P-09-2600 - Emma B. Ramos v. Apollo R. Ragot

  • A.M. No. P-09-2636 Formerly OCA IPI No. 07-2681-P - Atty. Eduardo Francisco v. Liza O. Galvez

  • A.M. No. P-09-2676 - Judge Juanita T. Guerrero v. Teresita V. Ong

  • A.M. No. RTJ-05-1953 - Mayor Hadji Amer R. Sampiano, et al. v. Judge Cader P. Indar, Acting Presiding Judge, Regional Trial Court, Br. 12, Malabang, Lanao del Sur

  • A.M. No. RTJ-07-2055 - Heir of the late Rev. Fr. Jose O. Aspiras v. Judge Clifton U. Ganay, Presiding Judge of the Regional Trial court, Branch 31, Agoo, La Union

  • A.M. No. RTJ-09-2170 Formerly OCA I.P.I. No. 09-3094-RTJ - Heirs of Simeon Piedad, namely, Eliseo Piedad, et al. v. Executive Judge Cesar O. Estrena and Judge Gaudiso D. Villarin

  • G.R. No. 146548 : December 18, 2009 - HEIRS OF DOMINGO HERNANDEZ, SR., namely: SERGIA V. HERNANDEZ (Surviving Spouse), DOMINGO V. HERNANDEZ, JR., and MARIA LEONORA WILMA HERNANDEZ, Petitioners, v. PLARIDEL MINGOA, SR., DOLORES CAMISURA, MELANIE MINGOA AND

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  • G.R. No. 155125 - YSS Employees Union-Philippine Transport and General Organization v. YSS Laboratories, Inc.

  • G.R. No. 156208 - NPC Drivers and Mechanics Association, et al. v. The National Power Corporation, et al.

  • G.R. No. 149548, G.R. No. 167505, G.R. No. 167540, G.R. No. 167543, G.R. No. 167845, G.R. No. 169163 and G.R. No. 179650 - ROXAS and COMPANY, INC. v. DAMBA-NFSW AND THE DEPARTMENT OF AGRARIAN REFORM/DAMAYAN NG MGA MANGGAGAWANG BUKID SA ASYENDA ROXAS-NATIO

  • G.R. No. 157038 - Government Serive Insurance System v. Jean E. Raoet

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  • G.R. No. 159792 - Barangay Sangalang, represented by its Chairman Dante C. Marcellana v. Barangay Maguihan, represented by its Chairman Arnulfo Villarez

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  • G.R. No. 161424 - Republic of the Philippines v. Ignacio Leonor and Catalino Razon

  • G.R. No. 161929 - Lynn Paz T. Dela Cruz, et al. v. Sandiganbayan, et al.

  • G.R. No. 163117 - Equitable PCI Bank, Inc. v. Maria Letecia Fernandez, et al.

  • G.R. No. 162243, G.R. NO. 164516 and G.R. NO. 171875 - Hon. Heherson T. Alvarez v. PICOP Resources, Inc.

  • G.R. No. 163553 - Yun Kwan Byung v. Philippine Amusement Gaming Corporation

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  • G.R. No. 165109 - Manuel Mamba, et al. v. Edgar R. Lara, et al.

  • G.R. No. 165299 - Pacific Steam Laundry, Inc. v. Laguna Lake Development Authority

  • G.R. No. 165387 - Mayon Estate Corporation and Earthland Developer Corporation v. Lualhati Beltran

  • G.R. No. 166570 - Efren M. Herrera, et al. v. National Power Corporation, et al.

  • G.R. No. 166941 - Spouses Dennis Barias and Divina Barias v. Heirs of Bartolome Boneo, namely, Juanita Leopoldo, et al.

  • G.R. No. 168668 - Philippine Economic Zone Authority (PEZA), et al. v. Pearl City Manufacturing Corporation, et al.

  • G.R. No. 168897 - Gina M. Tiangco and Salvacion Jenny Manego v. Uniwide Sales Warehouse Club, Inc. and Jimmy Gow

  • G.R. No. 168756 and G.R. NO. 171476 - Shrimp Specialist, Inc., v. Fuji-Triumph Agri-Industrial Corporation

  • G.R. No. 170447 - Bievenido Di o and Renato Comparativo v. Pablo Olivarez

  • G.R. No. 170476 - People of the Philippines v. Ricardo Grande

  • G.R. No. 170661 - Ramon B. Formantes v. Duncan Pharmaceutical, Philis., Inc.

  • G.R. No. 171023 - Arsenio S. Quiambao v. Manila Electric Company

  • G.R. No. 171669 - Heirs of Rodrigo Yacapin, namely, Sol Belnas, et al. v. Felimon Belida (Deceased), represented by Merlyn B. Palos, et al.

  • G.R. No. 171916 - Constantino A. Pascual v. Lourdes S. Pascual

  • G.R. No. 172092 - People of the Philippines v. Joey Tion y Cabadu

  • G.R. No. 172372 - The People of the Philippines v. Romar Teodoro y Vallejo

  • G.R. No. 172822 - MOF COMPANY, INC., v. SHIN YANG BROKERAGE CORPORATION

  • G.R. No. 173158 - Alejandro B. Ty and International Realty Corporation v. Queen's Row Subdivision, Inc., et al.

  • G.R. No. 173319 - Federico Miguel Olbes v. Hon. Danilo A. Buemio, etc. et al.

  • G.R. No. 173329 - Susan G. Po and Lilia G. Mutia v. Omerio Dampal

  • G.R. No. 173441 - Heirs of Sofia Quirong, etc. v. Development Bank of the Philippines

  • G.R. No. 173533 - Vicente N. Luna, Jr. v. Nario Cabales, Oscar Pabalan, et al.

  • G.R. No. 174480 - People of the Philippines v. Reynaldo Albalate, Jr.

  • G.R. No. 175115 - Lily O. Orbase v. Office of the Ombudsman and Adoracion Mendoza-Bolos

  • G.R. No. 175393 and G.R. NO. 177731 - Government Service Insurance System v. RTC of Pasig, et al.

  • G.R. No. 175466 - Bank of the Philippine Islands as successor-in-interest of Far East Bank and Trust Company v. SMP, Inc.

  • G.R. No. 175803 - Governor Ornaldo A. Fua, Jr., et al. v. The Commission on Audit, et al.

  • G.R. No. 175994 - Jesus Campos and Rosemarie Campos-Bautista v. Nenita Buevinida Pastrana, et al.

  • G.R. No. 176291 - Jorge B. Navarra v. Office of the Ombudsman, Samuel Namnama, et al.

  • G.R. No. 176951, G.R. No. 177499 and G.R. No. 178056 - League of cities of the Philippines, et al. v. COMELEC

  • G.R. No. 177384 - Josephine Wee v. Republic of the Philippines

  • G.R. No. 177404 and G.R. NO. 178097 - Land Bank of the Philippines v. Kumassie Plantation Company Incorporated

  • G.R. No. 177486 - Purisimo S. Buyco v. Nelson Baraquia

  • G.R. No. 177664 - CRC Agricultural Trading and Rolando B. Catindig v. National Labor Relations Commission and Roberto Obias

  • G.R. No. 177777 - People of the Philippines v. Fernando Gutierrez y Gatso

  • G.R. No. 178000 and 178003 - Liberato M. Carabeo v. Court of Appeals, et al.

  • G.R. No. 178606 - The Episcopal Diocese of the Northern Philippines v. The District Engineer, MPED-DPWH

  • G.R. No. 179328 - Rizalina P. Positos v. Jacob M. Chua

  • G.R. No. 179356 - Kepco Philippines Corporation v. Commissioner of Internal Revenue

  • G.R. No. 179505 - First Philippine Holding Corporation v. Trans Middle East (Phils.) Equities Inc.

  • G.R. No. 179554 - Metropolitan Manila Development Authority v. Trackworks Rail Transit Advertising, Vending and Promotions, Inc.

  • G.R. No. 178158 and G.R. NO. 180428 - Strategic Alliance Development Corporation v. Radstock Securities Limited and Philippine National Construction corporation

  • G.R. No. 179830 - Lintang Bedol v. Commssion on Elections

  • G.R. No. 179946 - The People of the Philippines v. Quirino Cabral y Valencia

  • G.R. No. 179952 - Metropolitan Bank and Trust Company, etc. v. BA Finance Corporation and Malayan Insurance Co, Inc.

  • G.R. No. 180218 - REPUBLIC OF THE PHILIPPINES v. DEVELOPMENT RESOURCES CORPORATION, ET AL.

  • G.R. No. 180439 - Resort Hotels Corporation, Rodolfo M. Cuenca Insvestment Corporation v. Development Bank of the Philippines and SM Investment Corp.

  • G.R. No. 181174 - Ma. Cristina Torres Braza, et al. v. The City Registrar of Himamaylan City, Negros Occidental, minor Patrick Alvin Titular Braza, represented by Leon Titular, et al.

  • G.R. No. 181455 and G.R. No. 182008 - Santiago Cua, Jr., et al. v. Miguel Ocampo Tan, et al.

  • G.R. No. 181556 - In Re: Petition for Assistance in the Liquidation of Intercity Savinds and Loan Bank, Inc., Philippine Deposit Insurance Corporation v. Stockholders of Intercity Savings and Loan Bank, Inc.

  • G.R. No. 181571 - Juno Batistis v. People of the Philippines

  • G.R. No. 182013 - Quasha Ancheta Pe a & Nolasco Law Office and Legeng International Reports, Limited v. The Special Sixth Division of the Court of Appeals, et al.

  • G.R. No. 182161 - Rev. Father Robert P. Reyes v. Court of Appeals, et al.

  • G.R. No. 182216 - Plantation Bay Resort & Spa and Efren Belarmino v. Romel S. Dubrico, et al.

  • G.R. No. 182310 - People of the Philippines v. Jan Michael Tan and Archie Tan

  • G.R. No. 182336 - Elvira O. Ong v. Jose Casim Genio

  • G.R. No. 182430 - Leopoldo Abante v. KJGS Fleet Management Manila and/or Gur Domingo A. Macapayag, Kristian Gerhard Jebsens Skipsrenderi A/S

  • G.R. No. 182623 - Dionisio M. Musnit v. Sea Star Shipping Corporation and Sea Star Shipping Corporation, Ltd.

  • G.R. No. 182498 - Gen. Avelino I. Razon, Jr., chief, Philippine National Police (PNP), et al. v. Mary Jean B. Tagitis

  • G.R. No. 182626 - Hilario S. Ramirez v. Hon. Court of Appeals, et al.

  • G.R. No. 182645 - In the matter of the Heirship (Intestate Estates) of the late Hermogenes Rodriguez, et al., Rene B. Pascual v. Jaime M. Robles

  • G.R. No. 182735 - Sps. Rogelio Marcelo & Milagros v. Philippine Commercial International Bank (PCIB)

  • G.R. No. 183233 - Virgilio G. Anabe v. Asian Construction (ASIAKONSTRUKT), et al.

  • G.R. No. 183297 - National Power Corporation v. Hon. Amer Ibrahim, etc., et al.

  • G.R. No. 183317 - Mariwasa Siam Ceramics, Inc. v. The Secretary of the Department of Labor and Employment, et al.

  • G.R. No. 18335 - Juanito Tabigue, et al. v. International Copra Export Corporation (INTERCO)

  • G.R. No. 183908 - Joelson O. Iloreta v. Philippine Transmarine Carriers, Inc. and Norbulk Shipping U.K. Ltd.

  • G.R. No. 184836 - Simon B. Aldovino, Jr., Danilo B. Faller and Ferdinand N. Talabong v. Commission on Elections and Wilfredo F. Asilo

  • G.R. No. 184977 - Coca Cola Bottlers Philippines, Inc. v. Ricky E. Dela Cruz, et al.

  • G.R. No. 185011 - People of the Philippines v. SP03 Sangki Ara y Mirasol, et al.

  • G.R. No. 185381 - People of the Philippines v. Danilo Cruz y Culala

  • G.R. No. 185477 - Herminio M. Gutierrez, et al. v. Flora Mendoza-Plaza, et al.

  • G.R. No. 185749 - Civil Service Commission v. Herminigildo L. Andal

  • G.R. No. 186234 - People of the Philippines v. Felix Palgan

  • G.R. No. 186242 - Government Service Insurance System v. City Treasurer and City Assessor of the City of Manila

  • G.R. No. 186460 - People of the Philippines v. Gualberto Cinco y Soyosa

  • G.R. No. 186965 - Temic Automotive Philippines, Inc. v. Temic Automotive Philippines, Inc., Employees Union

  • G.R. No. 187478 - Representative Danila Ramon S. Fernandez v. House of Representatives Electoral Tribunal and Jesus L. Vicente

  • G.R. No. 187494 - People of the Philippines v. Elmer Barberos

  • G.R. No. 187838 - Adriatico Consortium, Inc. Primary Realty Corp., and Benito Cu-Uy-Gam v. Land Bank of the Philippines

  • G.R. No. 188240 - Michael L. San Miguel v. Commission on Elections and Christopher V. Aguilar

  • G.R. No. 189868 - KABATAAN PARTY-LIST, ET AL. v. COMELEC

  • G.R. No. 189698 - ELEAZAR P. QUINTO and GERINO A. TOLENTINO, JR., v. COMELEC

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    G.R. No. 187838 - Adriatico Consortium, Inc. Primary Realty Corp., and Benito Cu-Uy-Gam v. Land Bank of the Philippines

      G.R. No. 187838 - Adriatico Consortium, Inc. Primary Realty Corp., and Benito Cu-Uy-Gam v. Land Bank of the Philippines

    PHILIPPINE SUPREME COURT DECISIONS

    THIRD DIVISION

    [G.R. NO. 187838 : December 23, 2009]

    ADRIATICO CONSORTIUM, INC., PRIMARY REALTY CORPORATION, and BENITO CU-UY-GAM, Petitioners, v. LAND BANK OF THE PHILIPPINES, Respondent.

    D E C I S I O N

    VELASCO, JR., J.:

    The Case

    Before us is a Petition for Review on Certiorari under Rule 45 assailing and seeking to set aside the Decision1 and Resolution2 dated October 16, 2008 and May 13, 2009, respectively, of the Court of Appeals (CA) in CA-G.R. SP No. 103717. The CA nullified and set aside the Orders dated February 29, 2008, March 5, 2008, March 17, 2008, and April 21, 2008, with the assailed March 5, 2008 Writ of Execution and March 14, 2008 Writ of Preliminary Injunction, issued by the Regional Trial Court (RTC), Branch 51 in Manila, in Civil Case No. 00-97648.

    The Facts

    Sometime in 1997, William A. Siy, the president of Adriatico Consortium, Inc. (ACI), applied for a credit line of PhP 200 million with Land Bank of the Philippines as additional funding to finish the construction of the Pan Pacific Hotel and the Adriatico Square, both owned by ACI. The lands on which the buildings were built belonged to Primary Realty Corporation (PRC).

    The loan was approved and a Mortgage Trust Indenture (MTI) dated January 15, 1998 was created to secure the loan. Under the MTI, Land Bank was constituted as trustee of the lands of PRC and the buildings of ACI mortgaged to it.

    On April 28, 1998, the MTI was amended increasing the maximum amount secured by it from PhP 200 million to PhP 600 million. Metropolitan Bank and Trust Company (Metrobank) and Land Bank participated in the MTI. Land Bank was then issued Mortgage Participation Certificate (MPC) No. 0001 for PhP 200 million, while Metrobank was issued MPC No. 0003 for PhP 100 million.

    On July 8, 1998, the MTI was amended for the second time at the initiative of Siy, without the knowledge of other ACI officials and Board of Directors, to include J.V. Williams Realty and Development Corporation (JVWRDC) as borrower. JVWRDC is a majority-owned corporation of Siy. Consequently, Land Bank issued MPC No. 0002 dated July 17, 1998 for PhP 200 million and MPC No. 0004 for PhP 100 million to cover the loans of JVWRDC.

    Subsequently, ACI fully paid the PhP 200 million under MPC No. 0001 and PhP 100 million under MPC No. 0003. ACI then requested the cancellation of the MTI but Land Bank refused. At this point, Land Bank revealed it never received any payment from the entire PhP 200 million-loan availed of by Siy sometime in 1997 under MPC No. 0001. This prompted ACI to investigate.

    In the course of its investigation, ACI discovered that its former president, Siy, did not remit ACI's payments. What is more, ACI and PRC, with Benito Cu-Uy-Gam, ACI's new president, were obliged by Land Bank to pay the maturing obligations of JVWRDC. Likewise, it was discovered that the second amendment to the MTI was made possible by the submission of two secretary's certificates from ACI and PRC, which the National Bureau of Investigation (NBI) found to be forged.3

    On June 6, 2000, petitioners filed a Petition for Declaration of Nullity, Specific Performance, Injunction, and Damages with Prayer for a Temporary Restraining Order (TRO) against Land Bank and Siy with the Manila RTC, docketed as Civil Case No. 00-97648.4

    On November 14, 2000, the parties entered into a Partial Compromise Agreement. Under the said agreement, ACI agreed, among others, to pay and actually paid to Land Bank the total sum of PhP 289,656,868.97 representing the principal amount of PhP 201,233,891.38 plus interest in the amount of PhP 88,422,977.59 on November 28, 2000 as full and complete payment of MPC No. 0001 for PhP 200 million. Accordingly, the RTC issued a Partial Decision5 approving the compromise agreement on January 31, 2001.

    Trial of the case proceeded in the RTC for the purpose of determining who the parties liable under MPC Nos. 0002 and 0004 are.

    On January 15, 2008, Land Bank, however, informed ACI through a letter that the JVWRDC loans were included in a sealed-bid public auction of Land Bank Non-Performing Assets under the Special Purpose Vehicle Act. Petitioners viewed this as a violation of the Partial Compromise Agreement by Land Bank, particularly its Section 5, which states:

    5. With the submission of this compromise agreement and payment by petitioner Adriatico Consortium, Inc. of the amounts stated in paragraph 2 hereof, the herein parties agree to unconditionally apply said payment in full satisfaction and extinguishment of the loan obligations of petitioner Adriatico Consortium, Inc. with the respondent Land Bank of the Philippines and to suspend all actions against each other with respect to the liabilities represented by Mortgage Participation Certificate No. 0002 for PhP 200,000,000 dated July 17, 1998 and Mortgage Participation No. 0004 for PhP 100,000,000 dated July 29, 1998 covered under the Second Amendment to the Mortgage Trust Indenture dated July 6, 1998. It is understood, however, that said mortgage participation certificates (Certificate Nos. 0002 and 0004) shall continue to secure the outstanding obligations of J.V. Williams until said outstanding obligations have been fully settled and satisfied or until it is finally adjudged and determined who are the parties liable thereto; toward this end, the parties herein agree to cooperate with each other in order for respondent Land Bank of the Philippines to recover the same as against the person/s liable thereon.6 (Emphasis supplied.)

    This prompted petitioners to file a Motion for Execution7 before the RTC on January 24, 2008.

    Likewise, petitioners started to receive verbal demands for payment of the MPCs with a threat to foreclose the MPCs from a supposed highest winning bidder. Hence, on January 30, 2008, petitioners filed a Reiteration of Prayer for TRO and/or Writ of Preliminary Injunction8 before the RTC to enjoin the threatened foreclosure proceedings.

    Despite opposition from Land Bank, the RTC issued an Order9 granting the Motion for Execution on February 29, 2008. The fallo reads:

    Wherefore, the Motion for Execution is granted. Let a Writ of Execution be issued directing respondent Land Bank of the Philippines and respondent William Siy to suspend all actions against petitioner and particularly with respect to Mortgage Participation Certificate No. 0002 and 0004 including the transfer of the same to the buyer at the public auction.

    SO ORDERED.

    The corresponding Writ of Execution10 was issued on March 5, 2008. Subsequently, the Motion for Reconsideration and to Quash Writ of Execution11 filed by Land Bank was denied by the RTC in an Order12 dated March 17, 2008. The RTC, in interpreting Sec. 5 of the Partial Compromise Agreement, reasoned as follows:

    The paragraph is clear and does not need further interpretation. It does not [connote] of any other things. Action is viewed by the Court as any action, deed, act, contemplated by the parties as not to disturb the status quo of the terms and condition in the compromise agreement. The provision in the partial decision specifically prohibit[s] the sale at public auction of liabilities represented by MPC No. 0002 and 0004. So, whatever is done to, or disturbed in the terms and condition which is prohibited is a violation of the partial decision. If the parties [refer] to action stated in the partial decision, it is no other, and if it refers to other action it should have specifically placed in the partial decision which the parties did not.

    Likewise, on March 5, 2008, the RTC issued an Order13 granting petitioner's Reiteration of Prayer for TRO and/or Writ of Preliminary Injunction, and accordingly issuing the corresponding Writ of Preliminary Injunction.14

    Land Bank filed a Motion for Reconsideration, which was later denied by the RTC in its Order15 dated April 21, 2008.

    Dissatisfied, Land Bank filed a Petition for Certiorari and Prohibition with Prayer for TRO and/or Preliminary Injunction16 before the CA docketed as CA-G.R. SP No. 103717. Land Bank argued that the sale of the MPCs is not prohibited by the Partial Compromise Agreement, reasoning that it was well within its legal rights to assign its credits to a third person.

    Ruling of the Appellate Court

    On October 16, 2008, the CA promulgated its Decision as follows:

    WHEREFORE, premises considered, the petition is GRANTED and public respondent's Orders dated February 29, 2008, March 5, 2008, March 17, 2008 and April 21, 2008, together with the assailed March 5, 2008 Writ of Execution and March 14, 2008 writ of preliminary injunction are, accordingly, NULLIFIED and SET ASIDE.

    SO ORDERED.17

    Unlike the RTC, the CA found that the compromise agreement sought to prohibit only legal actions, e.g., litigation, and rejected the interpretation of the lower court. Further, it ruled that there is nothing in the said compromise agreement which prohibits Land Bank from transferring or assigning its obligations to third persons, necessarily suggesting that such transfer or assignment does not constitute "action" within the context of the compromise agreement.

    Aggrieved by the ruling of the CA, petitioners filed a motion for reconsideration, which was subsequently denied in its likewise assailed resolution dated May 13, 2009]

    Hence, this petition is before us.

    The Issues

    I

    The Honorable [CA] seriously erred and committed grave abuse of discretion in not holding [that] the Land Bank's actuation in selling the receivables during the litigation is a violation of its obligation under the partial compromise agreement to cooperate with petitioners to determine the parties liable under Mortgage Participation Nos. 0002 and 0004.

    II

    The [CA] seriously erred and gravely abused its discretion in holding that the sale of credit or receivables is beyond the scope of the term "action" proscribed under the partial compromise agreement.

    III

    The [CA] seriously erred and gravely abused its discretion in setting aside the writ of execution issued by the trial court due to the violations of the compromise agreement committed by Land Bank.

    Our Ruling

    The petition is meritorious.

    Petitioners contend that the act of Land Bank in selling the receivables during the litigation violates its obligations under the Partial Compromise Agreement to cooperate with petitioners in the determination of the parties ultimately liable under MPC Nos. 0002 and 0004. Furthermore, they maintain that the sale of the receivables falls under the term "action" as found in the Partial Compromise Agreement.

    In their Comment,18 however, respondent argues that the Partial Compromise Agreement aimed to suspend only legal actions against each other with respect to the obligations covered by MPC Nos. 0002 and 0004. It invoked its legal and contractual rights to transfer the MPCs and that such transfer cannot be construed as an action against petitioners.

    Essentially, the issues in this case can be summed up into one basic question: Whether or not the act of Land Bank in selling the receivables violated the Partial Compromise Agreement, specifically the aforequoted Sec. 5.

    This Court believes that it did.

    For a better understanding of the Partial Compromise Agreement in question, its entire text is hereby reproduced below:

    1. To avoid a protracted litigation for the mutual benefit of the parties herein, the petitioners and the respondent bank enter into the following compromise agreement whereby petitioners Adriatico Consortium, Inc. and Primary Realty Corporation are represented by its President, Benito Cu-Uy-Gam while respondent Land Bank of the Philippines is herein represented by its President and Chief Executive Officer, MARGARITO B. TEVES;

    2. Parties agree that the petitioner Adriatico Consortium, Inc. will pay to respondent Land Bank of the Philippines the total amount [of] PhP 289,656,868.97 representing the principal amount of PhP 201,233,891.38 plus interest in the amount of PhP 88,422,977.59 on November 28, 2000 as full and complete payment of Mortgage Participation Certificate No. 0001 for PhP 200,000,000 issued under Mortgage Trust Indenture dated January 5, 1998; Penalties, fees and other expenses are hereby waived. Within fifteen (15) days from receipt of the aforesaid payment, respondent Land Bank of the Philippines will release to petitioner Adriatico Consortium, Inc. the Mortgage Participation No. 0001 as confirmation that Adriatico Consortium, Inc. has no more obligations to respondent Land Bank of the Philippines with respect thereto;

    3. Parties agree that the respondent Land Bank of the Philippines shall furnish to petitioner Adriatico Consortium, Inc. on or before November 28, 2000 the following:

    A. Debit memo records for ACI LandBank account 0052-1198-20 as follows:

    x x x

    b. Microfilm copies of check pertinent to the withdrawal/disbursement of Php139,671,991.00 issued from ACI LandBank account 0052-1198-20. The particulars of which are as follows:

    x x x

    4. Within fifteen (15) days from submission of the above-mentioned documents, petitioner Adriatico Consortium, Inc. and respondent Land Bank of the Philippines shall reconcile ACI Land bank account under 0052-1198-20 in such a manner and procedure as may be mutually agreed upon by the parties.

    5. With the submission of this compromise agreement and payment by petitioner Adriatico Consortium, Inc. of the amounts stated in paragraph 2 hereof, the herein parties agree to unconditionally apply said payment in full satisfaction and extinguishment of the loan obligations of petitioner Adriatico Consortium, Inc. with the respondent Land Bank of the Philippines and to suspend all actions against each other with respect to the liabilities represented by Mortgage Participation Certificate No. 0002 for PhP 200,000,000 dated July 17, 1998 and Mortgage Participation No. 0004 for PhP 100,000,000 dated July 29, 1998 covered under the Second Amendment to the Mortgage Trust Indenture dated July 6, 1998. It is understood, however, that said mortgage participation certificates (Certificate Nos. 0002 and 0004) shall continue to secure the outstanding obligations of J.V. Williams until said outstanding obligations have been fully settled and satisfied or until it is finally adjudged and determined who are the parties liable thereto; toward this end, the parties herein agree to cooperate with each other in order for respondent Land Bank of the Philippines to recover the same as against the person/s liable thereon.

    6. It is expressly agreed that either party is not precluded from pursuing their legal action against the respondent William Siy or his company, JV Williams, Inc. notwithstanding this compromise agreement.

    WHEREFORE, it is respectfully prayed of this Honorable Court that this partial compromise agreement be approved and that a partial judgment based hereon be rendered.19 (Emphasis supplied.)

    The Intent of the Parties Governs
    in the Interpretation of Contracts

    A compromise is a contract whereby the parties, by making reciprocal concessions, avoid a litigation or put an end to one already commenced.20 It is an agreement intended to terminate a pending suit by making reciprocal concessions.21

    In the construction or interpretation of a compromise agreement, the Court is guided by the fundamental and cardinal rule that the intention of the parties is to be ascertained from the contract and effect should be given to that intention.22 Likewise, it must be construed so as to give effect to all the provisions of the contract.23 In essence, the contract must be read as a whole.

    Accordingly, after a careful review of all the provisions of the Partial Compromise Agreement, this Court finds that the term "all actions" found in Sec. 5 of the Partial Compromise Agreement is broad enough to cover all acts in relation to MPC Nos. 0002 and 0004 and is not limited only to legal actions.

    First, it should be pointed out that Sec. 1 of the Partial Compromise Agreement talks about a "litigation." As defined, litigation is the process of carrying on a lawsuit or the lawsuit itself.24 Here, it is evident that the parties intended to use a specific term to describe a legal action.

    Likewise, in Section 6 of the Partial Compromise Agreement, the parties stipulated, "It is expressly agreed that either party is not precluded from pursuing their legal action x x x."25 Again, the parties here purposefully used the phrase "legal action" and not just the word "action."

    Evidently, had the parties intended to limit the application of Sec. 5 to legal actions only, they would have written a specific word or phrase to pertain to legal actions and not just the word "actions" alone.

    Moreover, in cases of doubt as to the intention of the parties, their contemporaneous and subsequent acts can be considered in ascertaining their intentions.26

    In justifying its interpretation of the intention of the parties, the CA reasoned:

    Given that the parties' intention to avoid protracted litigation is clearly enunciated in the first paragraph thereof, we find that petitioner [Land Bank] correctly take exception to public respondent's conclusion that the inclusion of the subject obligations in the sealed public auction of petitioner's non-performing assets to be violative of the January 31, 2001 partial decision rendered in Civil Case No. 00-97648.27 x x x

    The parties, however, never meant to avoid protracted litigation with respect to MPC Nos. 0002 and 0004. That particular phrase was confined to MPC No. 0001 as unmistakably shown by the subsequent acts of the parties in proceeding with the litigation with respect to MPC Nos. 0002 and 0004 despite the approval of the Partial Compromise Agreement and the rendition of the Partial Decision.???r?bl? ??r

    G.R. No. 187838 - Adriatico Consortium, Inc. Primary Realty Corp., and Benito Cu-Uy-Gam v. Land Bank of the Philippines


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